Fair enough. I missed the part where this is an employees perspective.
WRT being selfish. It's often the last thing a founder wants. Boards, family members, and even sometimes employees - often pressure a founder into an acquisition the founder themselves isn't as keen on.
Why are you making moral judgements on a business decision? The investors didn't HAVE to take a write down, they chose to. The early employees didn't HAVE to join this company, they chose to.
Why do you deem it immoral for a founder to do what is best for himself within the bounds of the agreements he has made?
This kind of calling-out is common in HN and quite distasteful. Comments like this all amount to saying "X is immoral because they refused to give a charitable donation to Y". Charity is not a moral requirement and arguably it's not even a moral good.
It goes both ways. If anything, I would argue that employees have way more cancel power than founders, and it's far more common for employees to get their founders in trouble than the other way around. No VC will ever do an equity round without doing some research. Not to mention the open letters to founders that have gotten so many fired. Honestly, it's also how it should be - I've seen more founders misbehave than employees. Some founders really think that just because someone gave them a check, they are somehow untouchable.
But regardless if founder or employee, I don't see why we should lie about people misbehaving. If I know someone is a bad apple, I am not going to lie about it - especially if I can prevent someone I care about going through the same ordeal. I also don't know why I should change my mind about someone just because some time has passed. People don't change.
It's frankly pretty appalling that I have to spell this out to you. I suppose you didn't think much of the Me Too movement? While clearly not on the same scale, the fundamental societal mechanics that justify outing perpetrators of sexual harassment are the same ones that justify outing people who break contracts. The society would be a much better place if people knew that karma is real.
As with others, the morality of this situation depends on details we don't know. What always trips me out is the double standards in posts like yours. People are fine with the capitalist notion of starting a business, giving most people in it almost nothing, often collecting any I.P. produced rather than a license, and having goal of selling out in a way that will likely cost the employees their jobs. Almost all value goes to investors or a few founders while almost all work is done by employees. The process is often supported by false promises or emotional manipulation to keep workers loyal & with a tiny part of the pie. This is default in Silicon Valley from what I read here and in other media.
Then, an employee decides to do what's best for him or her in a way that negatively impacts the founding business person or investor. This is seen as unethical: such employees, upon some agreement or context, cannot possess the ability to make other choices that damage founder or VC goals. They don't possess the trait that founders and investors wield with nary a thought over employees like we're starting to see with more layoffs. The employees are, instead of rationally selfish, being Evil and called out for it.
A double standard that serves captains of industry and startup founders very well at everyone else's expense. In reality, capitalism says that everyone, including employees, should act in their own self interest externalizing all costs of such actions. So, per capitalism, the founder did the right thing by trying to screw the employee out of lots of net worth and the employee did the right thing screwing the founder by taking another path. Naturally, being utilitarian, I oppose such capitalism in favor of stakeholder-focused models with rules reducing opportunities for each party to screw the other. The market goes the other way, though, so everyone continues to help or screw everyone to heart's content.
And I get to read nonsense like this where people cry "But that's not right and fair!" while simultaneously...
"Business guys are typically going to make more money than the coders are, it's pointless to fight this. The better route is to go into business yourself and capture the value yourself. "
...supporting amoral, selfish practices of capitalists on founder or VC side. It's just also what the developers were following: do whatever provides most perceived value for themselves. It is really good advice, though. Keep preaching it while system works as it does given that's where money is at. It's just that making an exception for one party but not others seems unfair and irrational. Thanks for the entertainment though. :)
My point is the view of the world for the two parties here is totally different (unless you are a founder on the edge of success without enough funding on the line to lose your mind at an intern, and if so - interested on your take).
Not empathizing with the founder other than noting it would be sort of predicable for the founder to react like this. IP is big
Is it right to let the transgressions of the founder color the quality of the product the employees worked to make, or worse, the employees themselves?
If the employee joins the company after the transgressions have been make public, yes. There are enough companies and jobs in the tech industry we get to choose who we work for. If you choose to work for someone with a reputation for sexual assault then you have to live with that choice, and all the things that go along with it. That includes people writing off your hard work based on the founders bad reputation.
Most people are not willing to overlook someone's previous transgressions so joining them in a company is a stupid idea.
Once you take outside funding, whether the founders “care” about their employees is irrelevant. They don’t guide the company any more. Their investors do.
If they “cared” about their employees and weren’t looking for a large exit, they would be creating a “lifestyle” business and not seek VC funding.
I’m not making a moral judgement either way. Everyone should go into any employment situation with their eyes wide open.
I know a tiny handful of founders who are this kind of "weird" just on moral principle. They often get criticized as naive idealists, for actually valuing employees, including by paying them. All I can say is thank you for doing it your way.
But out of hundreds of negative omments I've read across several posts, yours is the first I've heard that mentioned the ethics of a founder. That's got nothing to do with the comment I responded to, and if it was the reason for everyone else's hate, it's awfully strange that it's never mentioned.
I'm not sure why you're so negative on the whole startup thing - while there are examples of foul play, the vast majority of founders do try to do right by their employees.
I don't think it needs any justification, really. The investor decides, whom to sell to and how much. If the founder doesn't want to organize a sale for employees, then he doesn't do that. He would probably have to pitch it and include it in to an already complicated funding round.
I totally understand why a typical founder doesn't want to do that. If for you as an employee it is a deal breaker, then you can complain about it, change company or whatever. It is not like the founder owes anything to the employees (unless he has promised that). Everyone in the equation are adults and have to decide themselves, if the position they are in makes sense for them with the terms they have.
This is something that founders should pro-actively surface and address ahead of a financing whenever and wherever relevant.
This is something we're working on advising founders to do. We want to do what we can to make sure that employees - no matter how experienced or sophisticated - get treated fairly throughout the life of the company.
My bad for the wording which seems to suggest otherwise.
No, that’s not true at all. I consider myself to be an ethical and reasonable human being and have never observed a startup I’ve been a part of - in positions where I am aware of operations, finances, privacy, etc - do anything “bad” like what HN keeps apologizing for. Maybe that’s a SV or big city thing, but here some of us have ethics.
"This fatalist attitude is just as bad as the overly naive attitude that I'm sure left many employees of this company feeling screwed."
No, it isn't. It's reality.
"Founders don't have some magical power over you with which to screw you. "
They absolutely do. They have the power to dilute your share to nothing, and they have the power to make special deals which cut you out of receiving anything.
"And I'll also add that being a founder sucks"
That doesn't change a damn thing. That doesn't excuse for one second the shenanigans that founders pull to screw over their employees.
Seriously, this idea that we're entirely in control of our own destiny, which has the side effect of blaming the victim over the whole thing, needs to end.
Well, I’d argue founding a company is a little more than just “managed”
I don’t mean it as being malicious. Doesn’t mean I don’t have a different point of view on what happened but that is separate from my goal of becoming more informed
I really appreciate everything you've said, and I think you've deconstructed it much better than I did.
The first point about asking advice on the matter was meant to be a rhetorical question. I had the same abhorrent reaction you did to the advice of underpaying, hiring with the plan to dismiss someone, devaluing them as a co-founder, etc. I want to make that clear that I would never run a company that way, or work with people who did.
When you look at a play like that on paper, the numbers look good. But what are you forgetting? You're forgetting that you're building a BUSINESS, and businesses are built around people and relationships.
What I was wondering was whether or not founders really did see that sort of unscrupulous play as an option in their business. Do people actively operate that way? When presented with those facts in such an emotionless narrative, would people buy in? Has humanity sunk so far in the desire to achieve wealth, that we're willing to sacrifice the well being of others? To ignore hardworking people who are helping us build our dream?
I've heard so many stories of engineers getting screwed, and I wondered if people truly operate that way?
"Ideally a co-founder has the same level of standards when it comes to ethics and making business decisions as you do, they won't take risks that can affect the company in a negative way and they'll do everything they can to stay on the right side of the law. "
The word missing there is 'normally', I'll add it in, thanks for the feedback.
The idea I was trying to convey there is that someone that is not 'tied' to the company with stock might have less of a problem with making decisions that are not right, in the rest of the article I give one example of a situation where that did not work out as expected.
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