Lots of gems in here. One humorously self-effacing anecdote:
"At that time we knew that a talented engineer in a tough to get tech was worth about $1.5 million per head. Thus, I knew with relative assurance that since we were going to hire at least 70 people with our Series A money, that our worst case scenario was about a $100 million exit.
If anyone is paying attention, you are now saying, wait a minute! Didn't Powerset sell for $100 million to MSFT? .... Yup, we nailed our worse case scenario!"
Reminds me of P.A. Semi, the embedded PowerPC design company bought by Apple in 2008. Obviously Apple had no intention of using PPC anymore, so their product was discontinued.
P.A. Semi had 150 engineers, and Apple paid $278 million for the company. That's about $1.85MM per head. Seems to match the Powerset story pretty well!
I find it mildly annoying when writers co-opt words for their own [marketing] purposes and then redefine those self-same words in order to validate their point. I am quite sure this is a logical fallacy of some kind. I'm just not smart enough to know which one it is. Let me provide an example:
First, the author says,
"Over the years, I've been accused by the press of many things, but one of my favorites is the articles that claim that I create cults or even religious orders in my companies."
Then, he goes on to say,
"...by 'cult' what I mean is a group of super high quality people who trust each other and have similar ways of thinking, learning, reacting, problem-solving and working together. Further, this team needs to bond together under a leader they trust and respect."
Well, no dictionary I can find defines cult in that way and the press were probably not using it in that manner either. In other words, he isn't addressing his favourite of the "many" accusations leveled at him. Instead, he is skirting the debate--if there is one at all--and repurposing it in order to aggrandize himself.
I have to agree wholeheartedly. Upon reading the article, my first thoughts were, "I wish this guy actually knew what a cult means"....and then later realized "oh, he doesn't care what it means, because he's just going to decide what it means".
Sort of like saying "I believe in miracles...if, by 'miracles', you mean completely expected outcomes that everyone thought would be the most likely result."
It seems to me to be a type of Begging the Question[1] since the conclusion - 'leading a cult is a good thing' - is implied by the premise 'a cult is a group of people with good attributes'.
This may have been pointed out elsewhere, but it seems to have something in common with the if-by-whisky style of argument.
All that's missing is the "if by 'cult' what I mean is a slavish adherence to laws and dictates laid down without recourse to reasoned argument.., then I disagree."
"Engineers Suck at Negotiating, so Don’t Negotiate, Be Fair - from me, after being pissed off about hiring practices I experienced from bad founders."
God yes. This should just be basic employer-employee decency. Don't fuck around with people's lives just because you might save a buck. ESPECIALLY when you're getting much more from them (Which is just how employment goes).
That's one of the points that stroke me most. I was at a company where two guys same level of competence could have up to 20%! difference in package because one knew how to negotiate and the other one did not (=was "nice&cool" imo, "naive/a bit immature" in their opinion). The company was very secretive about compensations (you always had the impression they knew stuff that you should also have known, too bad you did not know!). When I discovered about that (I was remote), my guts really hated this aspect of the company culture, but then I thought ok maybe I have no idea of what real hard ("winners") business is. I am so glad this post makes me go back to my 1st impression once for all. Be hard & clear, but fair.
yeah, and he sounds like he has a really interesting way of dealing with it.
Now, people might disagree on what level you happen to be at technically... but still it seems like you are saving an incredible amount of time and effort by moving the decision to simply "how good are they" and then making the money decision after that solves a whole lot of problems.
It creates a great path for employees to follow as well. You know exactly what you need to demonstrate to make it to the next level.
Steve McConnell (or more accurately, I suppose, Construx) with the Professional Development Ladder (http://construx.com/Page.aspx?nid=244) was an early advocate for this idea, and Spolsky has discussed it a couple of times as well.
Cash has limited motivational power, but it's akin to the physiological layer on the hierarchy of needs. If you're getting a shitty salary it's harder to give a damn about the success of the product or company.
That being said, also brilliant is the idea mentioned to let people exchange one or more tiers of compensation for stock if they so chose.
The best way to prove to yourself, potential investors and to any potential future employees that you have a killer idea, is to get a number of A-level engineers to join full-time with equity-only deals.
Um... given all the advice to never work for equity only, can anyone here actually claim to have pulled this off?
As far as I can tell, this statement is about employees and doesn't cover co-founders.
I think he's talking about "late founders" -- early engineering hires who have enough personal wealth from early exits (or spousal income, savings, etc.) to potentially be founders on their own, who end up joining. In a lot of cases you give them 83b stock too, instead of options.
Most of what he described is just best practice/common wisdom, although well presented -- the A-A, B-C thing especially, perks like monitors, etc.
The "unique" points he raised, which I agree with, are salary/budget transparency within the organization, not trying to pay engineers as little as possible (but instead having fair compensation ranges without negotiation required), and minimizing commutes.
We're on the opposite side of the spectrum as a company in that we're not well known, we're not well connected, we don't have outside capital, and we're not creating the next generation of search. We do, however, have similar goals of finding and retaining the best people, building an enduring and rewarding culture, and continuously exploring better ways to do things. We actually blogged today about what we've learned as a startup in trying to find the best people who are also the right cultural fit.
Favorite advice: Maintain your high hiring bar. This ends up being difficult in the face of big competition and looming deadlines. Hold out and your team and product will be much better for it.
The critical thing about have open and public pay scales is that it incentivises people to make the team better - not make themselves relatively better by hoarding information.
I worked at a big corporate which had a culture of individual bonuses and it was a shambles. All employees ended up being 'above average' and the bonus pool was shared out on a 'project managers pet' basis which sunk any business improvement techniques or any 'pay now, save later' which are the meat and drink of cost improvement.
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"At that time we knew that a talented engineer in a tough to get tech was worth about $1.5 million per head. Thus, I knew with relative assurance that since we were going to hire at least 70 people with our Series A money, that our worst case scenario was about a $100 million exit.
If anyone is paying attention, you are now saying, wait a minute! Didn't Powerset sell for $100 million to MSFT? .... Yup, we nailed our worse case scenario!"