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Rant/VentingDon't believe the Tech Startup Hype; Play it Safe (self.TheRedPill)

submitted by grutypats

Long-time lurker here. I've been reading a lot of money/business related posts, and wanted to contribute.

I'm a lifer from Silicon Valley. Both parents from reputable tech companies. I've attended competitive high schools, then attended a well-ranked college, and am now enrolling in a part-time masters program for Finance.

I know the startup scene. I was once a part of it (started my own, then worked for a friend's, then worked for a venture-backed start-up, now I'm employed with an older tech company).

Don't believe the startup hype.

It annoys me when I read the tech blogs reporting of yet ANOTHER startup that magically scored a venture round of x amount million dollars. It annoys me when a bunch of my friends talk about leaving their jobs to start their own ventures and then selling their nonexistent company to Google for a bajillion dollars and retire on an island.

But mostly, I'm annoyed with how the media portrays startup life and startup culture. You won't believe how ridiculously difficult it is.

  1. Programming ability. If you don't have it, don't think about it. If you can't learn it, don't think about it. I've seen people talk about hiring great programmers or outsourcing programmers but the reality is this: those guys don't want to work for you. Why would they? Are you more attractive than a 120k offer, free food, free laundry, etc. from Google? This kind of programming ability doesn't come from Codeacademy lessons or Udemy. It comes from years and years of discipline and cultivated creativity. You might as well be learning the piano or violin.

  2. Money. You need a ridiculous amount of money to get started. The days of cowboy angel investors and venture capitalists funding your business pitch are long gone. They want numbers. They want revenue. They want proof-of-concepts. I would say don't even think about dropping out unless you can sustain YOURSELF and your BUSINESS for at least a full year. Don't count on outside investors saving you. They won't. And if you leave your job, you better hope you have enough connections to be able to find another one.

  3. REVENUE. Alright. Let's say you've miraculously made your product. You've build the front-end, the backend, and you've even fronted a couple thousand dollars for a few months of server capacity and time. You're a miracle worker and you're good to go. So now what? Where are you gonna get your users? Are you gonna blast your product on Facebook Ads? Google Ads? Put it up on the App Store and hope people start downloading it? Start using the Freemium model? Let me ask a further question: When's the last time you saw an ad on Facebook for something and you didn't just download it, you PAID for it too? And now you're hoping a couple hundred thousand people will do what you wouldn't? Right.

  4. STRESS. Here's where the media partially gets it right. Imagine this. You've dropped out of your cushy job. You've lost your dental and health insurance. You got no cushion. Best of all, you just dropped around 5k to pay for server capacity (either outsource or Amazon). The users are trickling in, but by your math, you won't make enough money to even cover the expenses. You got about 3-5 months of runway time. How are you going to increase your revenue? What's your attack strategy? Imagine waking up everyday knowing that time is ticking out. Imagine that feeling in your gut knowing that you are living on borrowed time, and if this thing goes belly-up, there goes your personal finances and credit score. Not to mention the public embarrassment (see: Elizabeth Holmes, Theranos).

  5. DON'T TRUST THE MEDIA. Did you know Zuckerberg received a 50k loan from his parents during his first summer of Facebook to sustain server capacity? Did you know Evan Spiegel's (Snapchat) dad is a rich Hollywood lawyer? Did you know Kevin Systrom (Instagram) was approached by Zuckerberg to become a programmer when Systrom was still at Stanford? Did you know the current CEO of Palantir used to debate with Peter Thiel while both were in law school (and guess who suggested who should become the CEO of Palantir when the time came)? Look up about the PayPal Mafia.

  6. (edited) BIG COMPANY COMPETITION. Big companies hate you. You think they're going to buy you out for a billion dollars and help you get your private yachts? Don't bank on it. They'd rather kill you first. They'll do anything in their power to stop you from acquiring market share (assuming you've survived that long). They'll sue you and drown you in legal work (which can take years). They'll release fake announcements for new product features that coincidentally seem exactly like yours. They'll straight up buy your nearest competitor instead of your nascent startup, so good luck trying to beat your competitors when they're financially backed by a behemoth.

If you look behind the startup lore, these seemingly "rags-to-riches" stories of young upstarts defying an olden industry are nothing more than lies. These people mostly had privileged upbringings and were already incredibly talented to begin with. They developed the right skills, at the right time, and were lucky to meet the right people (ex. do any of your friends remind you of Elon Musk?).

THE DECKS WERE STACKED IN THEIR FAVOR.

And even when they had all of this going for them, success was still elusive and difficult to attain. It was not a given. So, yes, there is a component of hard work, but only when they were already through the gates.

Steve Jobs could not have been Steve Jobs had he not he found Wozniak, who just happened to be tinkering with a very peculiar, certain invention. Where's your Wozniak?

The CEO of Zenefits was just kicked out of his role due to an insurance scandal. You could be the head of one of the fastest growing startups in the Valley and you can still be knocked off the throne. Does this sound like the road to billions to you?


It sounds counterintuitive to the media, but your best bet to building a large amount of wealth is to STAY WITH YOUR COMPANY. Live off of their resources like a leech. Some companies provide training programs and will offer to sponsor some graduate programs. Do that. Make your resume as gold as possible to ensure future employment.

Rise up the ranks. Play the corporate game. Save up your money. And only when you have comfortably saved enough money, read up about conservative investing techniques and allow compound interest to take over.

People confuse wanting to start your own company to wanting to be rich. If you want to be rich, there are more rational, probability-favoring ways to get there than going through the hells of trying to raise capital and build your own company. It's an uphill battle, and you haven't even gotten to the actual war yet (when big companies sue each other, ex. Apple's swiping/zooming technology).


TLDR; Don't believe startup hype. Be rational.


[–][deleted] 118 points119 points  (3 children)

I spend a month or so per year (usually 3-4 times) in SV and the place is its own reality. I have friends who spent their entire life there that didn't realize that throughout America homes cost under $250k. In their world bottom of the barrel homes are $800k. I know some people who made tens of millions in their late 40s after several attempts (who make a point to say they could never do it again) and others who made 5-6 million by the time they were 25 only to lose 90% of it by the time they were 30 to not one but two ex wives.

Something I have noticed. Silicon Valley is two economies. One is the tech economy and the other is everything else that services tech workers, CEOS, engineers, and more importantly their trophy wives. Its sort of like the California Gold rush. People from all over the world moved there to make money with gold, and some did, but most of them lost their ass. While the gold rush was one economy, the other economy was the guys selling supplies (this was how Levis jeans got started) to all of the people who needed them to mine gold. The business I am involved with is the second economy and has nothing to do with tech other than tech people make money.

A lot of people make money in tech, but a lot of people also make money building over priced homes for people who work in tech. A lot of people make money starting a company, but a lot of people make money selling their wives $500 pairs of shoes every week.

If I was going to do business in Silicon Valley and with the tech workers I would try to keep it small and make it something that they need and would buy regularly. I know some wealthy kids up there whose parents were tech titans and the kid has no programming skills but wants to make a startup, his parents give him $50k and then he goes out and pays someone to use a bunch of off the shelf parts to build a website/app that no one uses and has no means of making money.

I tried to tell him, dude you would make more money if you had a hotdog stand in a major park near the tech giants. If you delivered lunch to smaller companies you would make more money. Don't try to compete with them, try to sell them something they need at a high price and will buy often.

[–]RedEyesBlueShades 82 points83 points  (2 children)

When everybody is digging, sell them shovels.

[–][deleted] 7 points8 points  (0 children)

Shovels, work clothes, shade tarps, gator aid, breakfast, lunch and dinner. But don't start digging next to them.

[–][deleted] 119 points119 points

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[–][deleted] 48 points49 points  (45 children)

Its crazy how many of those parents have kids who are addicted to Heroin though. Heroin is massive up in silicon valley among the children of the elites.

[–]badpadding 32 points33 points  (40 children)

Are you serious? Coke I can imagine..but heroin?

[–]foldpak111 35 points36 points  (3 children)

I got introduced to these high rollers through networking and good lord.. They live by a different set of rules. They can pretty much do whatever the fuck they want, within reason of course.

[–]TheSelfGoverned 1 point2 points  (0 children)

Everything short of murder, pretty much.

[–]AndreNowzick 5 points5 points [recovered]

if they die of a heroin overdose, good for everyone.

[–]NorrisChuck 1 point2 points  (0 children)

I prefer my clients alive, thank you very much.

[–][deleted] 30 points31 points  (5 children)

Yeah. Its pretty sad dude. I have seen it many times. Parents will have 8 and 9 figure net worth and their kids will be incredibly addicted to heroin. One guy I know has a son who has had a problem since he was a teenager, the kid has a bunch of friends who all have the same problem and all of their parents are incredibly affluent. What people think of as a ghetto drug is a full blown rich white kid drug up there.

[–][deleted] 5 points6 points  (1 child)

Good, let the spoiled brats die in puddles of their own vomit and excrement.

[–]trpjnf 22 points23 points  (4 children)

Heroin is quickly becoming the drug of choice amongst white suburban folk. Where I grew up (northeast United States) it is becoming an epidemic. Google "suburban heroin problem" if you don't believe me.

[–]1whatsazipper 5 points6 points  (0 children)

It's truly a scourge affecting our communities.

[–]Squeezymypenisy 2 points3 points  (0 children)

Lol its always been there. Just under a new name.

[–]foxytit 5 points6 points  (1 child)

Frontline did a documentary on the heroin epidemic a couple days ago: http://www.pbs.org/wgbh/frontline/film/chasing-heroin/

Most of that takes place within a block of where I live. Eye opening.

[–]mytalkinghead 2 points3 points  (0 children)

It usually starts with prescription opioid abuse but the scripts dry up or become too expensive. What do you do next when you're an addict?

Go straight to the opiate source, save some money, and get lit.

It's a travesty plaguing the entire country.

[–]Sdom1 1 point2 points  (13 children)

Dude, nobody does coke anymore. It's all heroin, meth, and molly. The reason for this is that most drugs in the US come from the cartels now, and cocaine can only be grown/made in colombia. The cartels are in Mexico, and obviously for logistics and profit reasons have gone with the drugs above.

[–][deleted] 6 points6 points

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[–]Sdom1 2 points3 points  (8 children)

Ok, I just meant it was no longer as popular as it was. Let's not get carried away. I understand that it's not literally nobody, but it's not doing the damage it once was. The big problems are heroin and meth, with molly not far behind.

[–]Sdom1 2 points3 points  (0 children)

And cocaine cannot only be grown in Columbia lol. Listen to yourself.

Technically it is only really grown in one area of the andes shared by Columbia, Peru and Bolivia. It can't really grow outside of that area. The Mexicans certainly can't grow it, and probably not for lack of trying.

[–]garlicextract[🍰] 3 points4 points  (6 children)

Ok, I just meant it was no longer as popular as it was. Let's not get carried away.

No, you clearly said

Dude, nobody does coke anymore.

Which is just all around wrong as fuck. If you mean "Coke is no longer as popular as it was during it's peak in the 1980s coke boom" then say that instead. Coke enjoys much more widespread use than heroin right now, look it up.

[–]Sdom1 1 point2 points  (5 children)

I was joking, fucking Christ. Do you honestly think I meant that not one person does coke anymore? You're taking me literally to score points.

Coke is not of primary concern to law enforcement right now. If they find a teener in your pocket you're fucked, but it's not what they're worrying about. The drugs causing the most problems right now are heroin and meth, both being pushed hard by the cartels; both are fairly cheap as far as illegal drugs go, so much so that meth is supplanting crack in the inner cities.

I know several cops, and I know a guy who was in a gang and did some time for dealing, and they all say the same thing. This is the trend right now, and it's being driven by the cartels.

[–]garlicextract[🍰] 1 point2 points  (4 children)

I know people who have been busted for coke. "Meth is the #1 drug right now" and "the cops don't give a shit about coke right now" are very different things, and the latter is wrong. You're backtracking and trying to make it seem like I'm having a semantics argument. I'm not. Your premise is wrong.

[–]RedEyesBlueShades 12 points13 points  (0 children)

I think we should introduce the concept of "beta parents"...

Think of your typical Billy Beta and how he let's his woman do whatever she wants, and the whole relationship goes down the drain. And now apply to parenting.

[–]netherlanddwarf 9 points10 points  (0 children)

I know a kid who was the son of a billionaire and went out of his way to fuck his life up. Shitty person too.

[–][deleted] 122 points123 points  (33 children)

Thanks, advice much appreciated. However, not all new businesses are "start ups" in the sense you describe. To a lot of people, a start-up is something that is created with the aim of rapid growth and being sold to a larger company. However, starting your own business with the aim of growing it slowly, and making it the main vessel of your income, is a different kettle of fish. I'm talking about the guy who starts his own roofing business, the guy who starts his own small-scale consultancy, the guy who starts his own medical supplies business...you get the idea...

I'm with you about the start-up fantasy that gets sold to us, it's BS. But what are your views on the latter type of business?

[–]1thiasus 46 points47 points  (11 children)

You made a fundamental distinction, thanks. Stay as an employee so long as you have opportunities for growth, but at some point branching off could be your best rational option. I took the plunge nearly a year ago with my own consultancy and I couldn't be happier I made the move instead of slaving away at the big firm where progressing up was becoming a matter of playing office politics rather than being good at my job.

[–][deleted] 10 points11 points  (6 children)

playing office politics

I keep hearing that this is the most important factor in progressing up at companies

[–][deleted] 14 points15 points  (3 children)

It is. Read 'Power: Why Some People Have It and Others Don't' by Jeffrey Pfeffer. It elucidates the inside world of office politics and tells you how to get ahead. Many bitter truths inside, but that's why we're all here, right? An absolute must read.

[–][deleted] 2 points3 points  (2 children)

Okie, what is the book like? I'm reading the 48 laws and How to win and influence ppl which seems to be in a similar spirit of playing the social game in your favor, in case you can compare it to either.

[–][deleted] 6 points7 points  (1 child)

Personally, I think it's loads better. It's a million times more practical than 48 laws, a bit more dry but far more useful. It'll tell you exactly what power entails, how to get it and what the consequences are - using examples entirely from modern hierarchies (business, politics etc). The author of Power actually criticises the 48 laws book for its impracticality.

I haven't read much of Carnegie's book but it seems like it's more of a general how-to guide on being social, too contrasting to directly compare.

It is truly one of the most insightful and useful books I've ever read. Read it, you won't regret it.

[–][deleted] 2 points3 points  (1 child)

You don't have to go crazy with them. In most (though not all) avoiding playing office politics is a safer path than playing office politics. Be polite to everyone, even people you don't care for. Find non-combative way to solve minor problems (someone's annoying you but they're more influential than you? See if you can come up with a different reason why you need to sit further away from this person, and never tell a soul your real motive).

Once you get higher up I assume playing politics matters more, but for most folks on this board who I assume are early 20s and at the start of their career just being polite will go some ways.

[–][deleted] 1 point2 points  (0 children)

Find non-combative way to solve minor problems

Yes even this is office politics imo, either unnecessary drama, or just being the charming dude that everyone loves, both are a way of politics

[–]grutypats[S] 35 points36 points  (17 children)

The majority of my post is focused towards tech-based startups, not small businesses. While they are, by strict definition, the same, the two are vastly different.

One is a tech startup chasing Unicorn valuation and Facebook dreams, and the other is a small business building incremental income (restaurant, landscaping). My opinions on small businesses is more favorable than towards startups (I would rather be the founder of Forever 21 than Uber).

I was mostly inspired to write this post because of the countless friends I have had who dropped out of well-paying jobs to chase half-built pipe dreams. Insufficient savings, no real programming talent, and not a single connection to a financier.

I come from a poor-income, immigrant family. When I hear that Zuckerberg's parents were relatively wealthy enough to lend their son $50,000 to fund his then burgeoning startup, the TechCrunch articles of the world's youngest billionaire loses its luster.

I understand that everyone feels the call to greatness. However, it must be pursued with caution, rationality, and intelligence.

[–]TheRedStoic 2 points3 points  (1 child)

Thankyou for responding.

I wanted to point out the same, that my startup began around 08, when I posted my hobby online for feedback.

Now we have 20ish employees and 2 international contracts were fulfilling. Debt free from the beginning. (very slow, organic growth, then coverage from a big accelerator to launch us.)

I'd love it if you'd add a section on networking to the post, the value of shaking the right hands and having the right numbers is largely overlooked or glossed over. Additionally time, which you touch on.

Without networking or tons of free time, I'd still be in hobby stage, barely getting enough donations to cover a 30$ hosting bill.

Thanks for the post. I'd share it with some acquaintances/friends/prospective entrepreneurs if it wasn't on trp. Permission to copy and paste with cred given?

[–]masterhan 2 points3 points  (0 children)

Startup looks to change the status quo in an industry ie Uber, Airbnb, Facebook

Small business looks to exploit status quo using a competitive advantage ie better ingredients better pizza pappppa johns

[–][deleted] 4 points5 points  (2 children)

no real programming talent

I would assume that ppl who quit their jobs to start some software startup would at least be programmers though?

[–]ShounenEgo 7 points8 points  (1 child)

The amount of "idea people" who think someone who codes 40+ hours per week will give a fuck about their idea for the promise of income or a slice of the not yet founded company is astounding.

The moment I told to a dentist that I'm a programmer he started pitching his idea while he was cleaning my teeth!

[–][deleted] 3 points4 points  (0 children)

That's actually hilarious. I thought most of tech start ups would AT LEAST be by programmers who figured they could put hefty amount of their free time into their own project, making it at least somewhat profitable while being in control of it.

[–]MortalSisyphus 9 points9 points [recovered]

Eh, I disagree. Assuming you aren't an absolute moron with a pipe-dream, assuming you have a half-decent idea and think it could be profitable, I say go for it. Worst that could happen is your venture fails and you gotta dig yourself out of a hole for a while. You only live once, nobody is going to starve to death, and if you still have skills you are still employable. The risks we face in modern American are small, relatively speaking.

Much worse to live your whole life playing it safe and then look back with regret on all the chances you never took because you were looking for the "smart" play.

But hey, that's just my philosophy, I'm a hopeless romantic. ;)

[–][deleted] 12 points13 points  (0 children)

Investors on Sand Hill Road generally figure that for every 20 tech startups they will fund 15 of them will be a total loss and they will lose 100% of the money they will throw into the business. 4 of them will break even or make a little but of money, if they are really lucky it will be enough to cover the losses from the other 15 start ups, and one of them will go on to make a shitload of money cover all the losses and make a considerable profit.

These are the businesses that the investors actually think are worthy of investing in. For the self funded companies most of them never go anywhere and unlike most small businesses don't even make enough so the people doing it can make a modest living.

While 19/20 of those startups don't make money for the investors, all of them spend money on doing business. All of the people who work at those businesses make paychecks and usually fairly big ones. The smart guy figures out how to get money from all 20 of them by providing some minor service that they need.

[–][deleted] 10 points11 points  (3 children)

There's an opportunity cost: you give up your job and the progression and extra wealth you would have had if you stuck with it.

The decision is not to be taken lightly, and the chances are you will fail (as most start ups do).

Furthermore, much of what causes success is far beyond your control. You can do everything right and still fail - the universe doesn't owe you anything.

[–][deleted] 12 points12 points

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[–]Endorsed ContributorRedBigMan 6 points7 points  (1 child)

Start-Up Fantasy has replaced The American Dream as a Fantasy.

[–][deleted] 0 points1 point  (0 children)

damn. good way to put it. wonder if there may be an analogy to be made between this scenario (in terms of system regulation and incentives) and the state of social structures like marriage (system regulation and incentives).

[–]maxineasher 50 points51 points  (18 children)

Writing from my throwaway account because Silicon Valley is a small place.

For what it's worth I've been meaning to post my FR here about red pill. I used to be a chump in a dead end marriage and job. I realized I had the skills and joined a startup. Within eight months we were acquired for a three comma club figure. Had redpill not given me the kick in the ass I need, I'd have missed the boat completely.

TLDR; Take risks. Sometimes they pan out.

[–][deleted] 7 points8 points  (6 children)

I'd love to read that story.

[–]maxineasher 11 points12 points  (3 children)

Highlights:

Had a wife that refused to work, and refused to do housework because "I'm a feminist and that's woman's work." So I asked her to fix things and mow the lawn to which she said, "That's man's work." Turns out she wasn't a feminist, just lazy.

Had a boss at an earlier startup that refused to sense market conditions. I had saved the company a number of times, even had some patents to show for it, but he refused to significantly promote me or make me a partner.

Realized that I was enabling this sort of behavior by being everyone's savior all the time. Not RP specifically but a mountain of related advice on reddit convinced me to stop being everyone's bitch. Do not set yourself on fire to keep other people warm. Found a rapidly growing startup that fit perfectly with my expertise.

Quit both the same day (the day after Labor Day a few years ago)

Started working at the new start up. Brightest bunch of people ever--we all kicked ass and I invented a couple new tech for the field that pushed us forward in the market.

Got noticed by a large Silicon Valley firm and an offer was made. Lots of money changed hands. They treated us very, very well.

The story is still ongoing...

[–][deleted] 2 points3 points  (2 children)

Can you briefly comment on how you got the leech out of your life, and the financial cost of it?

[–]maxineasher 9 points10 points  (1 child)

I quit my job and came home and told my wife I quit. She said I was making a mistake and that she would not come with me. So I told her I didn't want her with me.

Behavior in marriages matches behavior in divorce and my ex-wife is probably the most passive aggressive person on the planet. I used to enable her sulking but when it occurred to me what was going on I stopped tolerating it. This is all to say I haven't heard from her at all since the argument that started our separation.

I was still making good money at the time and I had been married for a while so I ended up owing about $150,000 in alimony over five years. No kids and I have a vasectomy so I've got that going for me.

I knew things were going to change rapidly at the new company so I moved to get the divorce settled quickly. My lawyer was impressed with how fast things got settled. In the state I filed once things are in the decree and it's only a matter of the adults in the divorce it's usually impossible to change anything.

Turns out $150K is chump change when you're a millionaire.

[–][deleted] 6 points7 points  (0 children)

I ended up owing about $150,000 in alimony over five years.

Thats still fucking disgusting. In what world does that make sense, its not like she has children to support. Don't get married folks.

[–]putin_vor 7 points8 points  (1 child)

8 months to reach 1 billion dollars? It's a bullshit story. Or he won the lottery by joining right before the acquisition.

http://uk.businessinsider.com/fastest-startups-to-1-billion-valuation-2015-8

[–]TempAnonAcct 8 points9 points  (0 children)

He said it was 8 months from when he joined. Company could have been going strong long before that.

[–]HS-Thompson 0 points1 point  (2 children)

Too bad you didn't vest until 12 months right?

[–]maxineasher 0 points1 point  (1 child)

They made it work since a lot of people were in the same boat.

[–]GIGANTIC_NIGGER_DICK 0 points1 point  (6 children)

How much money did you make out of the deal?

[–]maxineasher 5 points6 points  (5 children)

Millions. I'm paying more in just taxes alone this year than I made in all my working years combined before this job.

[–]GIGANTIC_NIGGER_DICK 2 points3 points  (1 child)

That's awesome man, congratulations!!

How did you even find that job in the first place? Networking? Getting a position at a company that was 8 months from being acquired seems like it'd be near to impossible.

[–]Hexthorne 0 points1 point  (2 children)

Nice.

Make sure you get a financial adviser and invest in something that will keep your wealth stable and growing =)

[–]maxineasher 2 points3 points  (1 child)

Easier than it sounds. Most financial advisors are there to sell you shit you don't need. Almost none of them have your interests in mind. This is something I've had to rapidly learn as whomever firm realizes I'm carrying this sort of cash around.

So it's more important to find people you can trust--they can be dishonest people so long as you know where they're bullshitting. There's a lot of psychopaths in this space so dishonesty comes with the territory.

[–]Hexthorne 0 points1 point  (0 children)

Almost none of them have your interests in mind. This is something I've had to rapidly learn as whomever firm realizes I'm carrying this sort of cash around.

I grew up in a very well to do area, it's true they're all like this. You might look into splitting up your investments across multiple firms, such that none of them individually have control of enough to create real problems for you. Make sure you let them know that you're doing it too, it tempers them a little bit when you know that you're playing them all against each other and they need to compete.

As in many companies, these places will have 2-3 competent motherfuckers and the rest are leeches. If you're lucky you can nab one of the competent ones as they're up and coming before they hit management/partner status.

they can be dishonest people so long as you know where they're bullshitting.

Absolutely this.

Sadly the truth of TRP is that you can trust no one but yourself

[–]Endorsed Contributoralways-be-closing 13 points14 points  (3 children)

The startup bubble will die - just like the dotcom bubble

Internet technologies won't.

Imagine someone during the midst of the dotcom bust telling everyone that the job sectors of everything from LAMP stack development to online vendors' DBAs to IT professionals were dead and never to return.

There's a massive amount of frothiness in VC capital that is going to subside and subside fast, and a lot of places that hire on runway money and which are pre-revenue and have no business plan are going to die.

The billion dollar unicorns running around are going to die.

The Big Names; Facebook, Google, Amazon, Netflix, Uber, Oracle, etc

some of which are old and experience and adaptable, some of which are new entrants but older companies, some of which truly did hit it big as startups that leveraged tech to deliver real value - - these will be hiring.

Whether the pay will be as easy as now, is anyone's guess.

The "idea man" culture comes and goes - - Tech is about to see its bubble burst again, but that's always been how it is.

Rise up the ranks. Play the corporate game.

i.e. get to the capital side of things as fast as possible

Same in any industry; you don't want to be the labor for long.

[–]slay_it_forward 2 points3 points  (2 children)

How do you figure Uber is going to die? Don't see ride sharing going anywhere.

[–]Endorsed Contributoralways-be-closing 1 point2 points  (1 child)

No, I'm specifically including Uber as the kind of company that will be around for a long, long time

[–]10xdada 39 points40 points  (9 children)

Something you need to know about SF is that most of the guys working in tech are beta as fuck. The brogrammer thing is a joke because if you have any alpha in you, you are in sales, marketing, product management, or VC. In tech, sadly, the guys who have alpha tendencies tend to go off the reservation because all those tards on the Asperger's spectrum have no concept of physical dominance. In nature the alpha would pick one up and shake him as an example to others, in SF, that all gets suppressed by ritalin.

There are hardly any women so it doesn't really matter, and the ones I meet are all looking for SV/BB. If you read TRP, let's just say SF is a great place to meet married women.

There are republicans and libertarians, but to avoid harassment lawsuits and diversity purges, they seem to keep their heads down. I have yet to meet anyone that would meet the east coast definition of alpha in SF. A lot of startups are like nerd boy bands, and when you meet them, they are pretty insecure because they have no control over what made them rich, and were told it was because they must be brilliant. They are unstable.

There are a lot of SJW women, and there are borderline illegal recruiting drives for any woman who can type "hello world." One company had to cancel their premium referral bonuses for women because paying out double for employee referrals for female programmers crossed the legal line.

I have seriously considered starting a recruiting company that puts crippled black lesbians and any native who will say they are trans or retarded through coding boot camps to feed them through to bay area companies. It's like $10-$15k a pop or more. I just can't do the trading in women and black people thing. I don't have the gall to convince them that working 80hr weeks for a ~%48 tax bracket salary and a pile of raffle tickets for class C shares isn't slavery. A foozball table and a disused climbing wall is not what their grandparents meant when they faced fire hoses and riot police for their dignity.

I am not a lifer, but the whole valley thing seems like a game of musical chairs with a bunch of giant dongs glued to the seats.

[–]piethon3 14 points14 points [recovered]

This post was poetic and I can't explain why.

[–]RedEyesBlueShades 2 points3 points  (0 children)

It's the mental picture of chairs with giant dongs.

[–]foxytit 6 points7 points  (1 child)

Wow. This is a beautiful piece.

You've vividly captured all the subtle idiosyncrasies of the tech yuppie. So cathartic reading that. Thank you.

disused climbing wall

Amazing isn't it? How one could be so boring, that the only thing to get excited about is, crawling up a bumpy wall, in a smelly overpriced boutique gym. Spending thousands on climbing shoes and equipment, to have status in a stinky boutique dump. Makes me retch.

[–]garlicextract[🍰] 4 points5 points  (1 child)

The brogrammer thing is a joke because if you have any alpha in you, you are in sales, marketing, product management, or VC. In tech, sadly, the guys who have alpha tendencies tend to go off the reservation because all those tards on the Asperger's spectrum have no concept of physical dominance. In nature the alpha would pick one up and shake him as an example to others, in SF, that all gets suppressed by ritalin.

The "alpha" guys are just naturally more suited towards sales/marketing/product management. And they can make more money often times as well compared to being an entry level coder. But don't try to act like they were offered elite programming positions and turned them down. At the end of the day those 'asperger tards' you talk about are simply far, far more gifted at programming/coding. If you've met the guys in tech that are so antisocial people are scared to even email them at work, you know what I'm talking about.

Everything else was on point.

[–]PlanB_pedofile 10 points11 points  (2 children)

If you're gonna startup, aim reasonable and know your risks.

Many of these take on loans for $100,000, people mortgage their houses, and most owners make nothing in their first 2 years.

Even as an independent contractor, be prepared to live off of $27,000 a year until you get enough clients. Also you have to constantly be on the lookout for clients that don't even pay or have any intent on paying the invoice when it comes due.

Be real, be reasonable. You are not the next Zuckerberg, but you can become a small 3 man shop that handles server side solutions for small businesses.

One of my local companies offers cloud storage w/ encryption and RSA authentication. something that DrobBox or Amazon Cloud doesn't offer. Their clients are engineering companies and small out patient medical centers that are looking for offsite secure storage.

That to me is a reasonable startup. The company makes around 1.2 mil annually which is very reasonable for a small 15 person shop.

[–]sir_wankalot_here 25 points26 points  (27 children)

A good post. But what most people are talking about and what you are talking about are two different things. You are talking about a tech startup whicb you will become the next Facebook.

I am talking about a very small, simple business where you don't right away quit your day job and you start really small and you only need to invest a few hundred dollars. If the idea fails, or isn't going anywhere, don't throw good money after bad.

So it could be anything. You see hello kitty flash drives on sale really cheap on alibaba. You can buy 50 for $150. So you buy them. You then put up a website and then put ads on FB targeting people who are interested in hello kitty.

You know what ? Most likely your venture will fail. But you will have only lost $200. In the process you will have learned a lot of thing. And all of your friends and relatives will be getting hello kitty flash drives for Christmas.

The key is if the the venture starts to fail, as in you can't move the drives. Don't throw good money after bad. Pull out set the drives aside maybe you will get another idea what to do with them.

Most of the people I know who where successful started out doing something simple like that. One guy he initially started out buying candy in bulk, repackaging it into unique containers he bought from companies going out of business. He spent half his tone looking for cheap containers to shove candy into. Sometimes he would buy a bunch of containers and say, well I don't know what to do with then right now, but an idea will come to me. Mind you this was after he had been doing this for 10+ years. He also started to order candy directly from the manufacture, that way he could get custom candy and have a unique item.

But 95% of the time you will fail. But if you only invest $200 after 20 tries you will have only lost $4K. That is the worse case scenario. But every failure you will have learned something.

But yah you are right about everything else.

[–]Senior EndorsedMattyAnon 12 points13 points  (14 children)

Counterpoint: Big companies prefer to buy rather than destroy you, because it's cheaper and faster. Why destroy you when they can just buy you? Buying existing technology is risk free, faster and cheaper than redeveloping technology.

Ability - yes, you gotta have it. Don't think about this shit unless you're super talented in at least 1.5 areas (tech, people, business). I'm a good tech all rounder and score 0.5 each on the others. That's 2. Evaluate yourself. Awesome developer? That's 1.0 if you're a perfect fit. 0.3 if you provide 1/3 of the skills needed. Are people itching to work with you at below market rate? can you call on 10 people to work with you right now? Can you lead them all effectively regardless of their personality type? Score 1.0 max. Business... do you know everything involved (finance, accounting, running a company legally, regulations, contracts, etc etc)... do it all? Score 1.0. Add it up... if you get 1/3 then forget it, you can't do a startup and you'll get eaten by people who can do more than you, so you got work to do.

Stress - totally. Set it up to work for YOU. Don't gamble your house. Don't gamble more than you are willing to lose. Always do a cost/benefit analysis. Do it well. Work in a way that works for you. Need income? Set it up like that. Need a partner? Set it up like that. Don't gamble high stakes if that will lose you sleep.

Hardest of all - avoid self bias, confirmation bias, and other positive (and negative) delusions. These kill you in the long term.

Everyone hears about the billion dollar startup. Noone hears about the thousand startups that fail.

It can be done. But if other people aren't excited about what you do and are jumping to come aboard... forget it. You need either revenue or excitement or money to get anything done.

[–]RedMe42 5 points5 points [recovered]

Just a thought, you can find a partner that compliments your deficiencies. I've seen it done - the visionary businessman paired with the hardworking developer/competent manager. Granted, you're splitting the profits, and incur the risk of wanting to move in different directions, but the dynamic can be more powerful than a single man, standing alone.

[–]Senior EndorsedMattyAnon 0 points1 point  (0 children)

yes, partners is a great option. You still need people/negotiation skills and business skills to make it work.

[–]foxytit 1 point2 points  (9 children)

Counterpoint: Big companies prefer to buy rather than destroy you, because it's cheaper and faster. Why destroy you when they can just buy you? Buying existing technology is risk free, faster and cheaper than redeveloping technology.

If you manage to survive and get big enough to put up a market share and legal fight, then yes, they will buy you out. Otherwise, way better to just crush you.

[–]grutypats[S] 4 points5 points  (2 children)

It really depends on a case-by-case basis. There are a whole bunch of factors that go into it, and I made a sweeping generalization to illustrate a biased viewpoint.

However, Facebook did attempt to release a Snapchat-like app called Poke, with poor results. Only then, they came to Spiegel with an acquire offer.

Jobs threatened Houston that Apple was already building a storage feature that would take out Dropbox. There was not even an acquire offer, just a threat.

The Twitter founders allegedly said that in the early days, Zuckerberg made a threat that FB would include a twitter-like function, and then made them an insultingly small acquire offer.

The majority of big companies are in it for the money. Whatever's cheaper will be the decision, but in my experience, it has always been the sword before the checkbook.

[–]Senior Endorsed Contributormax_peenor 1 point2 points  (4 children)

In the tech field, particularly software and services, the small companies have been ringing the bells of bigger companies. If you want a perfect example, look at Salesforce and Workday. They went after monster companies with existing products that were well entrenched. The little guys destroyed them--and became the new big guys. A staggering number of 25-300 employee companies are bought all the time. Often it is a lot cheaper to buy a team and their tech than trying taking the risk you can build a team in-house and actually get a product.

[–]Hexthorne 0 points1 point  (3 children)

Salesforce and Workday are great examples and terrible examples at the same time.

They're great examples because they set the new standard for how to manage metrics and large scale data. They had some genuine new value to add to the whole process.

They're bad examples because they found an honest to god technology gap in the way business was being run vs. how it could be run and were able to exploit it. Those are not common, usually when a smaller company supplants a larger one it's because they do something more efficiently or with better service than the original (Uber and taxis come to mind).

[–]Senior EndorsedMattyAnon 0 points1 point  (0 children)

Otherwise, way better to just crush you.

They'll act in their own best interests. Buying your technology is often a good option for them which is why happens so much.

[–]hyperiron 1 point2 points  (1 child)

(tech, people, business)

 When you say tech all rounder what specifically are you talking about?

Could tech be seen as the down and dirty of the field somebody is interested in? (ex. contracting, retail, restaurants). 

Business, what are some resources you would recommend for learning about the finances/accounting side of a business?

[–]Senior EndorsedMattyAnon 1 point2 points  (0 children)

The post (and my reply) is about tech.

Could tech be seen as the down and dirty of the field somebody is interested in?

No. Contracting/retail/restaurants is a completely different thing.

[–]Luckyluke23 9 points10 points  (2 children)

I'm not much into tech starts up, though i keep my ear to the ground. this was a well thought out post by someone who has LIVED AND BREATHED it.

it's so refreshing to see a quality post like this instead of the " alpha wannabes" trying to post some shit.

great post man. you should do s general business one too ( i'm in the business of selling vinyl records)

[–]grutypats[S] 5 points6 points  (1 child)

Thanks. A large majority of the money/business posts on this sub are fairly generic and don't offer a lot of specific advice.

Definitely would be interested to reading a post from you on how you got into selling vinyl records, and how's that going for you.

[–]Luckyluke23 0 points1 point  (0 children)

I think I would need to sell some first.

I'm not putting enough time into it because A) I don't have enough money for decent stock and 2) I'm in school so my focus is on that.

it's just a small facebook page I do locally. nothing special at this stage

[–]onlinerocker 4 points5 points  (5 children)

Your first point really strikes home. Programming is a major passion of mine, most people just don't get it. Ever taken a programming class at school? There is a reason 90% of the kids copy code from online, they don't get it and don't have a passion for it.

Like anything else, if you wanna be among the best, you gotta have PASSION.

[–][deleted] 2 points3 points  (3 children)

Yeah, so many people think that programmers just copy/paste code all day or they think that our jobs are "simple" for some reason. However, these are also typically the people who are going nowhere in life so I don't really associate with them.

[–]unicorn-carousel 0 points1 point  (0 children)

I like to think that I'm just taking a tour of the industry and networking. It was my favorite toy in high school, let me beat the status quo. As a guy from a place of Protestant work ethic, the VC-infused culture is fucking disgusting. I just want to work on open source shit all day and have non-assholes pay me to generously to do challenging stuff for them with it. Maybe go work on site in a big city for a week a month. Let me code in peace (and pop bottles and models when the day is over :).

[–][deleted] 5 points6 points  (0 children)

All this in mind working for a startup can be a great way to get into the industry.

Job hop often( not more than once a year ), first job can pay shit, whatever . Next job, well your a programmer, demand more.

[–]supergilbert 3 points4 points  (5 children)

I was waiting for a post about SV. I've been there and raised money for my business;

1) Businesswise, it can be done. I came here without any connection, got accepted into an incubator, and raised seed investment from VCs/angels. Relatively small amount but still. I think we benefited from the "fresh kids out of college" image at that point, I don't think I could it pull it off again so "easily" (it wasn't thath easy, we actually did a good job presenting the product and the product itself was quite good). Things now are different, and the startup scene has gotten so big, EVERYONE from around the world wants to come here, I see shitty idea after shitty idea

2) SF is okay but I wouldn't live there anymore. Everyone is in tech or in a tech-related field. The whole culture is very self-immersed, housing is overpriced, and to be honest the city didn't feel very safe, extreme disparities. I'd rather live in a normal city where people work in other fields.

Palo Alto/Menlo Park: I don't get it. It's the epitome of boringness, I still can't understand why 1/3 of the startups I see have their headquarters in Palo Alto. Every time I see their address, I feel bad for the workers there. I think I've been creeped out by the region so I'm biased.

3) The whole progressive vibe.

You can feel it in the air, when you go to a bar, talking to people etc. At that time I was partially BP, but right now I don't think I could stand being there anymore.

I can't imagine myself working for Google anymore because their transhumanists views are creepy as hell and I find them morally wrong.

I can't imagine myself working for FB because...well the same reasons basically.

It seems all the companies are really into the SJW spirit and it would be really hard for a worker to express different opinions.

I'd like to ask: are there any startup/tech worker in SF frequenting TRP? How's life at the workplace? Do you have to hide your thoughts and play it safe?

[–]unicorn-carousel 0 points1 point  (0 children)

TRP saved my life. I thankfully work in a pretty RP friendly tech startup, 95% of interactions are with only men present. Most of our girls are in sales/marketing/etc and they're nice enough to everyone. Abundance abound, so their dirty nature is just sleeping, obviously. The one chick in management spews some women in tech bullshit, but she seems pretty well tempered and is tom-boyish enough to succeed. She gets lots of special girl power privilege, but she does a good job too. Us guys get a lot of latitude to step around rules and break procedure if our judgement says so, so it balances out. Trust begets privilege.

I am pretty straightforward with my thoughts. It gets me in trouble, but it also keeps me safe around people who agree. I'm not a loudmouth asshole either, mostly frank 2-3 person conversations. It could easily bite me, but at the same time I get to know where others stand so I think it's worth it. I will do business with these people in the future so I consider it part of vetting my network.

There are SJWs and WKs around of course, but I am cool enough with all the girls at the office that they know I'm not a creeper by now.

[–]BlackFallout 3 points4 points  (1 child)

I feel better about being a security guard. JK no I don't.

[–][deleted] 2 points3 points  (0 children)

You have no golden handcuffs. You're actually in a good position to take risks.

[–][deleted] 3 points4 points  (0 children)

What you're saying has some truth to it, but isn't completely accurate. For example, your connections are extremely important when you're making a startup (you need to get funding and visibility somehow). Who you meet may be luck, but you can intelligently place yourself in positions that maximize the kind of connections you want to make, whether that means going to a top university or entering another small startup, building a reputation, than founding your own company.

There's a lot of luck, but you can attempt to make the odds more in your favor. Being rational would be keeping your day job while strategically placing yourself in "winning" positions, assuming you have the work ethic to sustain this lifestyle.

[–]2Sepean 2 points3 points  (0 children)

I got my startup off the ground with no funding. Maybe we'll pull some in later, but it will be from a position where we have customers, revenue and a solid product.

It's been a few tough years, but I don't want investors. Another problem with them is that they fuck up the process and force you to do stupid shit. There is smart money out there, but a lot of it is dumb.

[–]putin_vor 4 points5 points  (0 children)

You can do both, if you're a programmer.

I work for about 1-2 months of every year, making enough money to live frugally the rest of the time (yay programming salaries!), and I spend it working on whatever I want.

Instead of concentrating on money you should concentrate on creating something people will use, and also have fun while doing it.

[–]Rommel0502 3 points4 points  (1 child)

This touched a nerve that I was thinking about regarding the financial independence thread. There was a lot of advice regarding opening your own business as the golden road to prosperity. Yes, that is true in many cases, but realize it is the minority of business that survive, and even less that generate significant income. Is simply not for everyone, and thats not a knock, just a reality regarding different skill sets, work ethics, and capital reserves.

I went out on my own after a 15 year Wall St career. Even though I was accustomed to 80+ hour work weeks, there was still plenty I didnt know about growing a business from infancy. Things are great now, but there was two straight years where I didnt take a dime out of the company, and in fact made continuous capital infusions, all the while breaking my ass. Strike out on your own, and be prepared for that, or something like it.

[–]BRENDORVEGAS 2 points3 points  (0 children)

I definitely agree on number 1. There's going to be a plethora of kids who went to coding bootcamps that wont be able to get a job because they simply don't have the ability to program.

[–][deleted] 2 points3 points  (0 children)

SV is Asian/Indian; Seattle is white.

[–]Cho_Zen 2 points3 points  (0 children)

Pretty spot on. I jumped into a startup company last year and quit. The amount of stress and long hours expected of you really explain the perks like food, rent, gas, etc. They wanted me to stay at work or the "live work space" that they furnished, so that I'd be at work, always. "forget about buying groceries, just get everything delivered!" found myself actively or passively working 12-18 hours a day.

[–]UnluckyPenguin 3 points3 points [recovered]

Don't believe the startup hype.

I couldn't agree with you more.

I wish you spent the time expanding on reasonable startups, but it would likely not give someone the motivation to start a successful company.

Play it safe

If I can expand on taking risks, it's that you play it safe by taking a calculated and educated risk.

Hypothetical scenario 1: Startup A wants to hire you while paying you peanuts for your hard work. Should you take their job in exchange for the possibility that someone acquires them for millions of dollars and they will give you a cut of that? Well, to best answer that question, what are your other job offers on the table? "Don't count your chickens before they hatch." Sure, use a startup as a stepping stone while you're young. You can afford it.

Hypothetical scenario 2: Startup A wants to hire you while paying peanuts BUT you have another job offer from Established Company B that's going to pay 50% above the average expected salary for that position. As an engineer, I would never accept a job offer for less than I am currently making and companies are well aware of that. If you get a job offer for a large amount, TAKE IT, regardless of the possibilities of a boat load of cash 3 years down the road from the start up.

Women/Society/Companies do not look at a person based on how much they are going to be worth. They look at how much you are currently worth. If you spend a chunk of your life in hopes that a company will return on it's promise for growth, you're no better than an orbiting beta.

Last side note: My friend got offered a salary + 25% max bonus dependent on company performance. My friend said "NO, I will accept a salary of 20% more and no bonus." Sure enough the company agreed and when bonus rolled around, they were crap (5%) because the company performed poorly. As an employee, you shouldn't have to take on the burden of the company, because you can be sure the CEO doesn't have to worry about a car payment if he only brings in 2 million instead of 10 million.

TL;DR - Take calculated risks. Even better, take no risks by getting paid more.

[–]grutypats[S] 1 point2 points  (1 child)

That's a good point. Perhaps I'll write another post.

A reasonable startup, in my opinion, are startups that can sustain itself without outside funding. Forever 21, for example, has retained a large amount of private ownership. They answer to no VC firm, no powerhouse angel investor, just themselves. They are a family-owned business with the revenue of a major corporation. They started off as a single brick-and-mortar store, then expanded, and then expanded.

Taking on multiple sources of outside funding and feeding the venture capital craze is irrational. One, you lose ownership of your company and can be voted off by the board.

Two, an ideal business is one that can grow on the strength of its own income. You raise capital either because you lack money, or you're losing money. Using outside capital to fund fast growth leads to infrastructure issues as well as sloppiness. A ragtag team of 5-6 startup turning into a 100-200 employee organization over the span of a few weeks? That raises issues, particularly in leadership. This is when young-and-hot CEOs get booted.

It is amazing how venture capitalists have ingrained themselves into the public lexicon of Silicon Valley to the point where it is considered normal to receive a million dollar funding check from what is essentially a third party with its own agenda. Think about it.

[–]netherlanddwarf 1 point2 points  (0 children)

Money makes people do crazy, insane, ludicrous things.

[–]VIICHYVALOIS 2 points3 points  (2 children)

Start ups are a suckers game. Don't tie your horse to that wagon thinking your "1500 shares of company equity" will be worth shit in the event of the exit, because it most likely won't be. Research "participating preferred", valuation multipliers, and convertible debt.

OPs post is somewhat insightful, especially the part about programming skills, but everything you need to know about the pitfalls can be learned from the story "Good Technology" on the NY times (free, no paywall).

[–]LuvBeer 0 points1 point  (1 child)

Good Technology

Could you link? I can't find the article. Thanks.

[–]pourneTrilogy 2 points3 points  (0 children)

There's a lot of truth to this but its also a bit hyperbolic.

Some unordered thoughts before bed:

Amazon has a lot of free credits out there for startups, and you wouldnt need 50k to run a server for your MVP. The best devs probably wont be at startups unless they have challenging and interesting tech. But, you wont need the best programmers to build your product - you'll need them to make it scale. When a 5 year veteran at google can make 250k/yr with all the perks they can dream of, and is working on cutting edge tech that supports the entire internet, you can bet they wont leave easily. But hey, you should be able to hit series A before you need the real programming talent.

Also - salaries. While they may look big, especially in SV/SF, cost of livig is through the roof and a lot of startups dont have benefits that are comparable to the same job at an established company.

  • You wont get rich from startups
  • If you do get rich it wont be quick
  • You need connections
  • You need users and revenue
  • You need to position yourself correctly in the market
  • You need to validate your idea

There are companies out there whose whole business model is to lure in suckers with tens of thousands of dollars and an idea but no skill in building or marketing it, and if its worthwhile, steal it out from under them.

The normal rules apply: Dont be a sucker, if it sounds too good to be true it is, and you dont owe anyone shit until you sign a contract

On the flip side there can be a lot of risk in working for one company your whole life, if it turns over or management changes their direction, that job you thought was so cushy was only like that because you were pigeonholed. Theres a lot of turnover in tech, sometimes the best way to get the job you want is to move diagonally, not vertically.

[–]penis_butter_n_jelly 2 points3 points  (0 children)

I agree with most of what you say; however, you have essentially a 0% chance of getting rich by having a good six figure job, saving, and investing. The flip side of that is you almost certainly will have a comfortable life and be able to retire in your late fifties or early sixties. This is the path to 2-4 million. This sounds like a lot, but it isn't. This lets you retire on 80k/year without working and without spending principle.

Starting a company is absolutely the best way to get rich (over 10M, under 50 years old), but for all the reasons you state, it still is likely to be a failure and will have a huge opportunity cost--you lose all the safe wages you could have made, and all the capital gains from those wages. On one hand, this is how 90% of all 1st gen rich got rich. On the other hand, almost everyone who tries fails and the opportunity cost is substantial.

Not for everyone, but I like the consultancy space. Its a middle ground. There is zero chance my company (2 employees and 4-5 contractors) will ever be worth billions. But I make 3-4x what I'd make as an employee at corporate tech annnnnnd I don't have to put up with any of the bullshit. The flip side of the no tps report bullshit is I have to hustle and make sure the pipeline is always full. I may work 100 hours in a week. But, I also may take 8 weeks "half off" all at once--answer emails, put out fires, but not in the office at all. Yes its more risk, but not startup level risk, as well as the corresponding more potential, but less potential than a startup. Goldilocks zone. I'm not going to get rich either, but I'll be able to retire in my late 40's with quite a bit more capital gains to live on and I'm ok with that. Anyone that is technical and not socially retarded, its a good gig.

[–]savedarticles 6 points7 points  (7 children)

Ughh, corporate drone is the worst. Do it only temporary or in parallel to your own shit. Nobody made it rich and successful by being cautious. Yes, you can wait 40 years to get barely rich but you'll waste your whole life slaving like a bitch. Aim to be great. Fuck megacorp. Hit it and quit it as necessary for funding but don't play life safe.

All the business mogels you read about did not stay as Software Eng 1 at megacorp. They took risks and didn't give a fuck about the incumbant or the powerful companies. Sure a lot fail but that's life. You should give it a shot. You'll be dead soon anyways, nothing to get worked up over.

If you want to lead a bluepill life, then keep your golden handcuffs on.

*“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” *

[–]chrisindub 5 points6 points  (0 children)

Don't even think that working for a startup is going to get you any money even if you have been with them many years when they sell the company.

My wife used to run marketing for a decent sized company called IMH, they own MySpace also lol.

She quit IMH a year or so ago.

But IMH got acquired by Time Inc. this month.

I was just talking to the CTO of Vindico at a bar down in soho at a Bday party. Vindico is also owned by IMH. Like 60% of the world's mobile device online ad traffic goes through their servers.

I asked him if they got paid out after the acquisition.

Turns out they laid off most of their high dollar employees before the acquisition then called it a "merger"... so they wouldn't have to give any of the employees any money. Lol

When I laughed at him and about "merging" his small company with a huge corporate giant like Time Inc he got really defensive and said, "we are gonna get paid out later."

Sure you are.

CTOs don't know when they just got ripped off I guess. Hahahahaha

startuplyfeyo

[–]huoyuanjiaa 1 point2 points  (0 children)

I've never really filly considered this aspect of the startup dream, a dream which I had been wanting to chase myself. Thanks.

[–]jsalathe 1 point2 points  (1 child)

I have been through the complete cycle with a business I started in 2000 and got a final buyout in 2014.

Your competition will try to take your customers and sue you into oblivion all the way until you have the money in the bank from a buyout. Nobody in your industry will help you and your idea is not worth shit, only your customer base or revenue base.

If you merge with another business, you need to vociferously protect your shares. I watched as our BOD stole several other people's businesses and the previous owners got nothing at all. I insisted on a 10 year BOD seat and I attended every meeting in person at great personal expense. If I had not be so active, I am certain I would have lost my shares as well.

Most buyouts occur when public corporations want to buy customers. In most industries this seems to happen around $10 million / year in revenues. So you need to be able to survive until you have grown that large. It does not happen as fast as you are hoping. For me it took 14 years.

[–][deleted] 2 points2 points

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[–]rpkarma 1 point2 points  (0 children)

I'm annoyed at how so many people seem to consider getting VC funding "success". Are you kidding me, fundraising isn't the point of your business you idiots lol, and most of them make no money and either die or are acquihired for peanuts a year later. Absolutely silly. But the guys I know who have bootstrapped or taken small Angel investments and built sustaining revenue are passed over despite being successful by any business definition, solely because the VCs are looking for their 100X returns... the bubble will pop, and soon.

[–]FakeGuru 1 point2 points  (0 children)

What are the key points:

1 If you aren't a programmer, you probably have very little value in that world.

2 If you are a good programmer, extract your full value.

[–]1raceAround126 1 point2 points  (1 child)

Agreed. The amount of "programmers" that come across my desk demanding senior positions when their sum total knowledge seems to be "I watched some CodeAcademy videos".... yeah... nope.

C++ developers with a high level of skill usually come with a ten year work history on their CVs and demand a commensurate salary to boot. And even that's not a cast-iron guarantee that they can do what you want. Coming across a C++ developer with extensive Direct-3D or Open GL skills is rare. I know; we just headhunted one and it cost us a fortune. Strangely they also turned out to be male; believe me, I couldn't find a fat feminist with that sort of skill set for the life of me!

[–]foxytit 1 point2 points  (0 children)

I would imagine you would find plenty of those people in the gaming industry (steam). Is that not the case?

[–]narcissistic_walrus 2 points2 points [recovered]

I worked in a hardware start up for two years. I agree with this posters advice.

Don't do it. Huge stress, no stability. Plus it is damn near impossible to explain in future job interviews what your role was.

Companies want to see linear career movements unfortunately.

[–][deleted] 1 point2 points  (0 children)

With a back-up and some connections, it's more reasonable. A friend who built a company to IPO lived in a home his doctor parents paid for and married a high-paid PhD. His partner did six-figure programming projects on the side in the 'early years'. Another married couple (well-connected country club types) I know lived frugally while they built their company to be bought for $400m.

'Rich Dad, Poor Dad" provides the best plan to position yourself to become independent, then chase wealth.

[–]garlicextract[🍰] 1 point2 points  (0 children)

It sounds counterintuitive to the media, but your best bet to building a large amount of wealth is to STAY WITH YOUR COMPANY. Live off of their resources like a leech. Some companies provide training programs and will offer to sponsor some graduate programs. Do that. Make your resume as gold as possible to ensure future employment.

To be specific, by "stay with your company" it really means stay with your Company.

Don't stay at Apple or Microsoft for 12 years, unless you're on the CEO track like Tim Cook or Satya Nadella. Instead, stay with the types of companies that OP is talking about (not startups, they are a diceroll) but hop around from company to company every 3 years, or maybe every 5-6 years if you really like the place you're in. The genius man was an engineer at Cisco for 14 years. The smart and wealthy man went to Motorola after 4 years, Amazon after 9, and has been at Juniper networks since.

When you get promoted internally at a company, you get a raise of 2%. 5%. 7.2%. You made 58,000 and got a raise to 60,300. You were bringing in $125,000 and got bumped up to $134,000. These are the kind of numbers you're expected to see. But by going to another company, you can get a 20% or 30% or 50% raise depending on your experience, salary, and negotiation skills.

[–]iamrsj 3 points4 points  (7 children)

Be rational if you want to be average. While you make some very valid points, you're missing something so crucial. Doing great things is tough/challenging/hardwork/etc

What's your advice then? Not try? The corporate game is not an end game, been there, done that. It's soul sucking at best. A happy medium is joining a smaller company and be a part of the team where you can have a big impact.

Your advice will keep you at average. Being great requires taking risks.

[–]grutypats[S] 6 points7 points  (3 children)

It depends on your definition of greatness.

Greatness, to me, is financial independence. I can do whatever I want, when I want it. Do I really need 50 million to do that? 100 million?

If you conservatively invest 10 million dollars at a 5% return, that's a 500k salary. A 5% return on 2 million dollars is $100,000.

So 2-10 million dollars as a life goal seems reasonable, and still "great". You don't need to build a spaceship company to acquire that money.

However, if "greatness" is defined by joining the ranks of billionaire inventors and founders, then obviously, my post is irrelevant.

[–][deleted] 2 points3 points  (1 child)

After a certain amount of wealth, it's not the about the money, it's about winning.

It's showing up figuratively to Rome and winning against all odds.

None of those dudes who made billions did it for the money. They did it to win.

That being said, I can understand people having different goals.

[–]2mbillion 0 points1 point  (0 children)

Losers will never understand the true competitive spirit. A lot of wins are outcome independent for me, I just like to win, especially when I view my opponent unfavorably. Does not even matter what the prize or outcome is, I just like to win.

Of course its nice when the prize is a lot more money or some social enhancement I enjoy

[–]2mbillion 0 points1 point  (0 children)

whatever you want when you want - two weeks of paid vacation is not whatever I want when I want.

[–]mugatucrazypills 3 points4 points  (9 children)

I see nothing wrong with doing your start up as a hobby while you "keep your day job". Stability counts. A hobby that has the potential to one day replace your money problems is much better than say playing golf. Because a job while stable is forever a temporary solution to the permanent problem of you needing money. The goal is business earnings and passive income and equity. That's what produces real freedom and wealth that can be passed on.

Also the siren call of tech business is even worse than the bug of quick-rich entrepreneurship. People chasing a unicorn business phantasmagoria glamour and some sort of "business-like" lifestyle. It's like the kids in the ghetto that won't study to become doctors because they all think they're going to be Pro Basketball.

There are lots of great businesses out there that are entrepreneurial or semi entrepreneurial that millennials and gen-x's won't touch because they're not glamorous enough. Think Insurance, Commercial Real Estate, Gas Stations, Kiosk Retail (how about those vape cigarettes) etc, Storage Spaces, anything in waste mangment, Fast Food Franchises, someone mentioned liquor and tobacco stores, etc. Think of the unglamourous things that people do automatically and unthinkingly.

The key skill is salesmanship. Always be closing. Whenever I hear someone tell me how useless sales is, or how they don't like it, or they don't need to do it, or it's overpaid, or superficial, I always smile and think to myself:

"You wouldn't be here unless your dad "sold" your mom on putting his dick in her."

That's sales. Sales is life itself, stepping up to the plate and demanding to exist.

Also: building business systems that can run even if the employees are idiots (Which they will be sooner or later)

[–]Endorsed ContributorFLFTW16 2 points3 points  (1 child)

"You wouldn't be here unless your dad "sold" your mom on putting his dick in her."

This is a fucking golden comment.

[–]Origami84 1 point2 points  (3 children)

A good product sells itself, though. Maybe i am here because both my dad and mom recognized they would be reasonably happy together, and needed no particular convincing. Usually, a good seller is the one who sells you stuff you dont need, at a price you shouldnt pay.

[–]mugatucrazypills 0 points1 point  (2 children)

You sound like you might be one of those people who is "too good to do sales".

[–]Origami84 0 points1 point  (1 child)

I am terrible at selling: it is a skill i dont have, and i appreciate its value or the deep utility - for business - that have the peoples with it. I was just irked by its celebration, with the message that sales is life itself. That line is... i mean, i sure you meant it as an exageration, but still to see life as a constant competition where you try to "sell" to the others just goes against my core values.

[–]mugatucrazypills 0 points1 point  (0 children)

To each their own. Sell or be sold, I say.

[–]2mbillion 0 points1 point  (1 child)

Hobbies do not make money. If you are not going to take an honest run at it why bother saying you will

[–]mugatucrazypills 0 points1 point  (0 children)

In my experience a business hobby pursued diligently gives you the best idea as to whether it would work full time.

[–]2comment 2 points3 points  (1 child)

Startups are always a young man's game and still you are essentially playing a scaled down lottery, essentially picking a number on the roulette wheel.

If you are a hardworking idea person, you're gonna go live your life from failure to failure until you hit it big sometime, which may or may not happen. Depending on how much you learn from your failures.

If you don't want that, have a stable career.

That's all there is pretty much to it. There are opportunities and downsides to both. 1 size doesn't fit all.

[–]jsalathe 2 points3 points  (0 children)

It is more than mere chance. Expertise and drive are just as important. If you are a bulldog every day for years you significantly increase your odds.

Lazy people blame bad luck for failure.

[–]sacbite 3 points4 points  (0 children)

This guy is your Dad. And he's furious you don't want to do it the way he did it. And he hates anybody who doesn't do it the way he does it -- because he's terrified, deep down, that his way was the wrong way. Shorten that to -- this guy is terrified. Of life. Period.

[–]Senior Endorsed Contributormax_peenor 2 points3 points  (1 child)

I have been working this industry for a long time. I have seen it all and been involved in it all. Allow me to share some perspective.

Programming ability. If you don't have it, don't think about it.

There are a lot of places for people in this industry and I've seen a lot of C-list people get decent jobs. Just know that unless you are A-list, which means a reputation, you will live in a cyclical economy. Save when you make money, because you are going to be out of work at times. If you are A-list, you will never be without employment or opportunities.

Don't count on outside investors saving you.

You CANT be an outsider if you want a placement. Unless you are already profitable, you will never get it. You need connections. If you don't already know someone that can help you through the process, don't waste your time. Generally, you will get these connections as an A-list employee first.

REVENUE

This one is not so. There are tons of start-ups funded with the explicit intention of seeing them sold long before revenue is an issue. They only need to be a threat to an established company.

BIG COMPANY COMPETITION. Big companies hate you.

All up until they buy you. Here's a dirty little secret that we don't tell your 300 employees with stock options--we will win even if you never IPO, as long as we can sell you. You get sold for $5 a share? We make money. Your employees worked their asses to the bone for a strike price of $4? Tell them to lube their asses and enjoy their 4 figure payout.

The CEO of Zenefits

They were a house of cards from the beginning. So why would they get funded? Remember, the goal is not to be the next Google. It's to make money. VC can make plenty of money and hand the bag off to someone else to deal with the mess.

So honestly, don't give up on an idea if you don't think it'll be the best thing since sliced bread. If you can grow it, sell it or pawn it off on someone else (aka monitoring shareholder ignorance), it could be a winner--for you.

A few words of advice that people who would want to work a startup. If you aren't employee 25 or before, or e-staff, you will not get rich from it. If you aren't employee 150 or before, you will not get a big payout from it. Don't ruin your life working to make someone else rich. Either look for smaller companies or larger companies that aren't as demanding and give decent RSUs. Anything in between will fuck you. And fuck you hard.

[–]netherlanddwarf 0 points1 point  (0 children)

I honestly don't know why you got downvoted, SF is full of betas.

[–]tgeda2015 1 point2 points  (1 child)

Exactly. From the point of view of an investor why the fuck would I invest in some pie in the sky start-up when I could invest in AT&T stock and get 5% dividends a year compounding?

Or buy a duplex and get 10%, or invest in a bar that goes in the green within 6 months?

[–][deleted] 3 points4 points  (0 children)

Because even initial public investors in companies like Microsoft in the 1980s saw each dollar they invested in the company become $500 (if you invested 1 million dollars in Microsoft in 1986, you would have made 500 million in 2000)? That's not even talking about those who were able to invest before Microsoft became public.

[–]foxytit 1 point2 points  (0 children)

Love this post so much.

How did you learn about the startup backgrounds?

[–][deleted] 2 points2 points

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[–]2mbillion 0 points1 point  (0 children)

Those who cant find it necessary to bitch about it

[–]thenarrrowpath 0 points1 point  (0 children)

I just want to get into tech to make some real money.

[–][deleted] 0 points1 point  (1 child)

How about following Tim Ferris' advice in "the 4-hour Work Week"? I've been thinking of just starting some simple business ventures with a few friends (still in college). Any thoughts?

[–]UntraceableRP 0 points1 point  (7 children)

I'm also a Silicon Valley lifer, and am currently attending a prestigious university, majoring in Computer Science.

Given your knowledge of the tech industry, should I be heading there? I see you're studying finance now, but you didn't mention your undergraduate background.

[–]grutypats[S] 2 points3 points  (2 children)

You should definitely head there as a CompSci coming from a prestigious university. Tech companies will offer great starting packages, and your job security is far superior compared to everyone else in every other department. They lay off the technical talent last.

[–][deleted] 0 points1 point  (1 child)

What about not-so-prestigious universities? Studies shown that there's no correlation between success and where you get your degree from.

[–]grutypats[S] 0 points1 point  (0 children)

You have to hustle to get the best jobs if you come from a non-prestigious college. Networking, shoving your way into career fairs, be as obnoxious as you can. The fact is, top tech/banks come to the doorstep of prestigious colleges for OCI's, whereas everyone else have to fight their way in.

[–]Senior Endorsed Contributormax_peenor 4 points5 points  (3 children)

Yes, but landing that first good spot can be rough. (Assuming we aren't hiring anyone that fogs a mirror in a year after this bubble pops.) Start your own pet project, finish it and open source it. It doesn't matter if anyone ever uses it. Showcase what you have learned. That will take you ay beyond anyone that shows up thinking their degree is an door opener.

[–]UntraceableRP 0 points1 point  (2 children)

What about a prestigious degree and two/three summers of moderately prestigious internships in tech?

[–]RPTestDummy 1 point2 points  (0 children)

I'll reply to this with an anecdote. A fraternity member of mine got a prestigious CompSci degree and now works at either Facebook or Instagram. while working for that degree he interned at Microsoft and Goldman Sachs. He had not created anything of his own besides work and class related material. YMMV

[–]trinitys_dildo 0 points1 point  (0 children)

What do you think of Paul Graham and Y-combinator ? Have you read any of his essays ?

[–][deleted] 0 points1 point  (0 children)

It's also worth mentioning that the current boom of venture investing is due low interest rates transferring some investments from the stock market and corporate bonds to private high-growth ventures. As soon as the Fed increases the interest rates, it will be much more difficult to get funding.

[–]submitted_5_days_ago 0 points1 point  (0 children)

I don't see the danger in letting believers believe.

If they need articles (on the mainstream or here) to understand they're already doomed.

The game is about Power. But there ain't gonna be some school for it, ever.

But you'll surely find spreaders of thoughts which will make people believe how everything is not about power.

Be good and stay safe.

[–]PabloEscoba 0 points1 point  (0 children)

Like any viable venture that's worth while, its never easy.

[–]NeoreactionSafe 0 points1 point  (0 children)

There was a time back in the 1980's and 1990's when there was a real chance to grab fresh ground in the computer area, but it's pretty much all taken now.

It's like past Gold Rushes... once the easy gold is found it goes corporate.

And the recruiters have formed a sort of Mafia where they keep track of all the programmers and rate them for how easily they are used as a tool. Any guy that risks anything as far as company hopping can get a bad reputation now.

If you like the work (software design) then choose based on the project and whether it's what you are interested in doing.

That's my two cents... but I've been out of the business since 2001.

 

[–]masterhan 0 points1 point  (0 children)

I run a few eCommerce companies mainly following Tim Ferris' 4-Hour Work Week guidance. Always considered going to SV, but figured F it I'm smart enough to build sustainable businesses that give me free time to do whatever I want. I did that instead.

[–][deleted] 0 points1 point  (0 children)

I own my own computer store, and what you say is true. Even in my game, the start up value would bury from the get go. I am surviving because I have 20 years worth of customers who followed me to my own company. There's no way you could be lucky enough to get the business running if you have nothing to start with in the customer market.

[–]bancherul 0 points1 point  (0 children)

Really good post. Think about making money, getting stable revenue, not funding to burn through.

[–][deleted] 0 points1 point  (0 children)

Anything that sounds too good to be true probably is. Don't buy what some of these dreamers are trying to sell you. It's not real.

[–]nutty_bi 0 points1 point  (0 children)

Survivorship bias. You don't see the thousands that failed, only the handful that succeeded. Entrepreneurs are barely more grounded than aspiring rappers or athletes.

If you wanna make good money being alpha, go to Wall Street. You can find a job there that fits your skills and risk appetite.

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