Exploiting Silicon Valley For Profit (and Maybe Fun) - Diego Basch's Blog
Joe Founder comes to Silicon Valley with a laptop full of dreams, but no money. Joe wants to maximize his chances of making a few million dollars in five years. What should Joe do?
First off, let's acknowledge once again that Silicon Valley is a sea of conflicts of interest. You have the Sand Hill Strip, where "reputable" firms like "Palo Alto Grand Investments" or "Burlingamio Ventures" want Joe to invest his body and soul, swing for the fences, hit the ball into the San Francisco Bay and become the next Sergei Zuckerberg. It sounds awesome; the problem is that the chances of this are slim. Joe does not like. 1/100000 odds of making billions of dollars is unappealing.
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The whole thing is hilarious
90/s AIM wisdom: "j/k" means you're only half-kidding!
I love that the company name is ZombiePlatypus.
This essay was written by someone who hasn't been acquired.
Acquisitions are rarely for cash and are loaded on the back-end to "incentivize" people to stay.
If Joe and Wayne don't stay for four years, they lose most of their $5 million each.
Oh, and a large chunk of that $5 million each is paid in salary, taxed at a higher rate.
Then remember that the tax law changes at the end of 2012.
Net net is that between the Feds and taxes, their take home if they stay four years at Spitter was roughly $2 million and change. Subtract the cost of living for four years and we're well under $2 million each. Not enough to stop working and barely enough to afford a Silicon Valley house.
The opportunity cost of making so little, plus the suckiness of working at a big org, will cause Joe and Wayne to leave in much fewer than 4 years.
Only, the second time around Sand Hill Road will remember that they flipped, and scrutinize them much more before letting them play again, if at all.
No former employee will want to work with them, either, and thanks to the network they'll make their unhappiness with ZombiePlatypus selling out known.
Once founders show what their values are, there are consequences.
One one level I get it, the goal of medium returns. After all it's better than punching a clock, I guess. But if you have a workable plan to disrupt and dominate, well at least workable enough to convince VCs, then why the hell not go balls to the wall to execute it? You only live once, and working for the sake of getting acquired, or acqui-hired, seems parasitic to me...
well yeah it's satire.... crossed with a thinly-veiled rant. I'm just saying that I think that that type of motivation is parasitic...
The author of the original blog post Diego Bosch wrote to me.
He pointed out that he did in fact sell his company IndexTank to LinkedIn.
He also points out that there is no retirement even if you follow his infallible formula to create a money-making startup.
Which I agree with.
So net-net, I apologize to Diego because I got emotional about the tone of his post, and replied from the point of view of having seen people build companies they sold to bigger companies that actually didn't make them much money at all.
And it's still much more common in Silicon Valley that someone builds a company, tries to sell it, and fails to do so.
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