SPEAKER_01: Funniest thing is this one of the technical person who does all the work is the one actually reading the analytics and like, hey, like this, our launch bombed. What's the plan in the business? Don't worry about it. This is like, you need to be quiet. This is my department. You know, stop asking questions.
SPEAKER_02: All right, this is Dalton plus Michael. And today we're going to talk about how to not get screwed
as a software engineer.
SPEAKER_01: Interesting.
SPEAKER_02: We're going to get some tips. You know, we've, we've noticed that a lot of the,
SPEAKER_01: of technical folks sometimes get exploited. They kind of get ripped off by other folks. Evil business people. Yeah, it's kind of a bad pattern. And so we're going to, we're going to talk about it. So who is this aimed at Michael? Who is this video for?
SPEAKER_02: The folks we're talking to. So we're talking to, maybe you're a technical co-founder at a startup right now.
Maybe you are a great engineer at a scaling up company.
SPEAKER_02: The guy that everyone comes to, the person who always gets fixed, the woman who's always up late getting those text messages and having to.
SPEAKER_01: Yeah.
Or, or you're at a really early stage startup. Yes. But you're not a founder, a co-founder. You're like a lead engineer or head of engineering or there's some title. Yes. And the whole company is like three people. Yeah.
SPEAKER_02: But you're not a founder.
You're not a founder. Okay. There is the college student who all the MBAs go to
to build their prototype.
And then there's the Googler, right? How did you describe it? It's the person that does the work
SPEAKER_01: that other people take credit for to get promoted in bonuses.
It's the person that does this, you know, actually producing the products that a lot of people stick their career on. Yes. Yes, yes, yes.
SPEAKER_01: So that's who we're talking to. Yeah.
SPEAKER_02: So I think the thing that we're trying to
really help you with is. Yeah, we feel bad for you. So this comes up a lot for us at YC
SPEAKER_01: where we read a lot of applications and we interview a lot of companies and we see folks where it's pretty clear what's going on. We can see it a mile away in the application that someone is getting exploited or ripped off. And it's usually the technical person. Yes. Right? And it feels bad to see just all of these applications come in and it's crystal clear what's going on. Yes.
SPEAKER_01: And so this is for you.
SPEAKER_01: Yes.
SPEAKER_02: We would like to give you some questions to ask yourself to figure out whether you're being treated well or not. And I think that to be clear, we don't want to presuppose, right? There are a lot of people who are in great situations. We just want to give you some tools.
So let's talk about equity.
What are the questions people should ask themselves about whether they have enough equity, equity at all? This comes up a lot.
SPEAKER_01: I know you are a big proponent of this, Michael, but in general, something like equal equity is pretty common for startups that apply to YC and is something we recommend. And sort of the anti-pattern we might see is say there's two founders and the non-technical business founder has 90% and the technical person has 10% or less. And the explanation is basically just that the business founder had sharper elbows. It was a better, like there's actually no justification for this. It was my idea.
SPEAKER_02:
Yeah. Okay.
SPEAKER_01:
Right?
So there's really no good reason.
It's just that the business guy gets more for whatever case.
SPEAKER_01: And usually in those situations, you ended up with something much closer to even. Again, you give this advice. How do you explain this when this happens?
SPEAKER_02: I always just think that like the vast majority
of the journey is ahead of you, not behind you.
And you want your co-founders to feel like owners and partners.
And I always think about, you know,
in the early days of our company on Sunday night,
when the website went down, I couldn't fix it.
And so we're going to live in one of two worlds, the world where I get text and I have to like cajole people to fix it
or the world where everyone feels like an owner
and they get text and they wake up and they fix it. Right? And I think a lot of people just don't understand that if you can make people inherently motivated, they'll do far better work than if you fucking yell at them.
So that's the founder. You know, do you have close to equal equity?
SPEAKER_01: Yeah. What does your equity look like? And does it make sense? Like is the justification for whatever your equity is, does it make sense to you based on what you bring to the table and based on your actual responsibilities?
Now, what about the early employee?
Well, the early employee notoriously kind of gets hosed on this stuff, especially if they're providing the work of an equal technical co-founder, yet they get 1% or less of the company. Again, this is very common where you'll have two business founders, three business founders, you know, and then they'll have someone that's, you know, lead engineer that is effectively technical co-founder and they get like 1% not great.
SPEAKER_01: Yes. Not great.
SPEAKER_02: That's not a good pattern.
I would say if you're in the scale up
and you are the essential engineer,
the test I would kind of ask myself is, if this thing works, are you going to make a life-changing amount of money?
And, you know, I would argue that like, you know,
that doesn't mean you necessarily should have as much equity as the founders, or you're going to have as much equity as someone who came in early,
but it does mean that like,
if this thing actually IPO's or gets bought and you get like a pat on the back and like, you know,
a nice Christmas bonus,
probably you're not in the right situation. Yeah.
All right. That next group, the Googler.
I think this one's actually much more interesting because I would argue that if you're the Googler,
you're getting a bad deal. If you're doing like a hundred hour weeks and grinding and like your boss or your boss's boss is getting like mega vacations and $10 million a year packages and like promotions and da, da, da, da.
I would say on the flip side though, like if you've got good work-life balance. Yeah. I think it's risk-a-ward. This is a subtle point that Michael's making.
SPEAKER_01: I think it's for the opportunity costs that you're taking to not do something else. Yes. So are you getting a square deal versus if, again, if you're working really, really, really hard, perhaps another thing would be better. Yes.
But if you're very happy with the trades you're making on work-life balance and compensation, hey man, maybe it's gonna be good. Yeah. It could be great for you.
SPEAKER_02: You know?
And then I guess, you know, last but not least is the college student who like in most cases isn't even offered equity. Like that's like, you know, they're just the typer.
SPEAKER_01: You're the intern.
SPEAKER_02: Yeah.
SPEAKER_00: You're our technical intern.
SPEAKER_01: Just do all of the work. We're just the idea guys.
SPEAKER_02:
So equity is one set of topics you can ask yourself in any of these roles. Another one, and one that you brought up was kind of decision-making process. Like, okay, we've established that you are doing a lot of the work.
SPEAKER_01: Yeah. It's basically, do you have a seat at the table? And so again, if you're trying to self-diagnose, am I being exploited as an engineer, as a technical person, is the whole point that the business people have a lot of meetings that you're not invited to and all decisions about everything are made by the business people and you are basically used as a robot to write code. Yes. Probably not a great sign, probably a sign that you might be being exploited. Yes. Right? You're being used as like a machine to write code and not a person with a brain.
SPEAKER_02: I think the next thing you should be thinking about is kind of effort level.
Are you working these crazy hours, but everyone's on vacation in Aruba half the time?
Are your counterparts who are doing fundraising and sales
and HR and all the other tasks within the company, are they grinding or are they not?
SPEAKER_01: Yep. Like this is a self-diagnosis thing, but it's really sad when you see someone in the world of technical co-founder and they really have to work their butt off and they're really showing up every day. And the idea guy or the sales person or the business expert, the fundraising expert
actually isn't doing much.
SPEAKER_02: Sometimes they're part-time.
Sometimes they're part-time.
SPEAKER_01: And man, that is such a vector for being exploited. And so you should really feel from a self-diagnosis perspective that yeah, your counterparts are just as into it and there's just as much heart that they're bringing to the table as you are. And if so, again, maybe it's a great deal for you.
SPEAKER_00: Yeah.
SPEAKER_02: I think that the last two are kind of connected. This kind of like, is it working slash opportunity cost. Like one would argue that like you,
SPEAKER_02:
because you're doing all this work,
have an amazing ability to judge whether the company is working. Yep.
And you should maybe trust your instincts there.
And is it working? Like you might be exploited if you're being asked to do all this stuff and like the evidence is painfully obvious it's not working.
SPEAKER_01: Well, and you're the technical person. So you notice the first, the funniest thing is this, one of the technical person who does all the work is the one actually reading the analytics and like, hey, like this, our launch bombed. What's the plan in the business? Don't worry about it. This is like, you need to be quiet. This is my department. You know, stop asking questions.
And so if it just seems like you're bringing your A game effort and doing all of the work and it's definitely not working,
probably might be a sign you're being exploited.
SPEAKER_02: Well, and this is even more of the case that the opportunity costs might not be worth it. Or you might be not leaving because you're afraid,
but you know, intellectually this thing isn't working.
SPEAKER_02: All right.
SPEAKER_01: So, and like, don't let them finesse you. Again, this is the same person that convinced you that you getting, you know, one 10th of their equity is a great deal for you is the one's like, hey, I know it looks like we're not growing and we have no revenue and we're about to run out of money,
SPEAKER_01: but I got this.
SPEAKER_02: It's fine.
SPEAKER_01: Like don't let that same suave person
keep doing the same move on you over and over again. Yeah.
SPEAKER_01: It's weird.
SPEAKER_02: Cause I never used the term gaslighting, but it's actually gaslighting. It's actually that.
SPEAKER_02: Okay. So I don't want to paint too bad of a picture because on the flip side, we see situations that are great.
Yeah. More often than not, you know, other folks we fund. NYC. Yeah. Yeah. The first we fund,
SPEAKER_01: it's mostly like a really awesome trade.
SPEAKER_02: So let's talk about situations where like
things are going well, right? Like you signs that this is great.
SPEAKER_01: I think one sign is from an opportunity cost perspective. You realize that you're at the best possible place in the world for the risk reward ratio. And whether, however you're being comped, you're like, wow, I'm getting a smoke and deal. And I know there's no better deal I could be doing. And I'm proud. I feel privileged to be working on this team. I'm proud of who I am because they care just as much. Like if everyone feels like they're getting a great deal, that's a sign of a good culture.
SPEAKER_02: Yeah. I also think if you feel like you're giving, you're given a lot of responsibility, you have a lot of opportunity to learn. I think most people don't realize that like,
you can learn at a startup pace or you can learn at a Google pace. And like a startup is an amazing option to learn.
So if you're getting better faster than your peers who are in big tech,
you might be getting a really good deal. Especially we see this a lot with people who learn a ton and then they go start their own company. And it's like, well, that startup was incredible for you. Yeah. Even if it didn't work, you can get rich from it.
SPEAKER_01: That was like the best education you could have ever gotten.
SPEAKER_02: And we see this also with immigration. Like sometimes that startup or that company is getting you to the country you want to be in or getting you the visa.
That's a great deal. That might be getting you a great deal. So that's like a really, really big thing.
I also think there's this element of like,
you're not exploited if you're part of the problem.
SPEAKER_01: Yes. Again, this is a subtle point. Let's see if we can explain it. It's basically, if it's not working
SPEAKER_01: and you have a seat at the table, it's on you, man. Yes.
SPEAKER_01: You can't just blame, hey, business guy, you're not pulling your weight because no one wants our thing. But if you have a seat at the table, you're equally culpable. If you have equal equity with someone and you have a seat at the table in decision-making, just because it's not working doesn't mean you get the right to blame other people. No, that's not cool.
SPEAKER_02:
SPEAKER_02: You know, and I think the last one that I would say is like,
and this is a slightly dangerous one, but like when people are honest with you
and it turns out to be that way. When people are like, this is going to be the hardest job you've ever done. And then it turns out that you're working like crazy. Like when the team you're coming into
SPEAKER_02: is extremely upfront with you about how it's going to be, and it turns out that way and it's not good, it's not necessarily being exploited. You made that choice.
SPEAKER_01:
Yeah. You chose that. That's a really great point, man. Like think about expectation setting
SPEAKER_01: when you take any job or when you go to school, the people, the great professors or teachers or bosses, it's not that they tell you it's going to be easy. It's that they tell you what's going to happen. Yes. And they're right. They're honest. And you're like, wow, I really respect that you set my expectations well and I knew what I was walking into. And so again, if someone did an A plus job of expectation setting, you can't really hold, you can't argue that they're exploiting you or that this is like not what you signed up for. Right?
SPEAKER_02: No. All right. So I suspect I'm in a bad situation.
What do I do to fix it?
SPEAKER_01: If you think you might be in a bad situation, I would look at what are the other opportunities that you're taking an opportunity cost from doing. So for instance, if you're at the big tech company and other people are getting tons of promotions because of your work,
you probably are pretty well undervalued and you could be learning more. And so I would explore starting your own company or going to working somewhere else.
If you really want that seat at the table, my guess is you could find a job where you have way more a seat at the table when you're doing decision-making.
SPEAKER_01: Well, I'll say a step you could even before that.
SPEAKER_02: You can ask for a seat at the table.
That's true.
I remember there was this great employee at Justin TV, this guy named Tim.
And he was disgruntled
because the company wasn't doing well.
And as disgruntled as he was,
he actually would do the work to come up with ideas and to point out things that were wrong and to create fixes. And he took ownership.
And what was interesting is that as he took ownership, he was given ownership.
So it wasn't this weird, it wasn't like, oh, you're not at the table.
It's like, come up with a smart idea.
Maybe you are at the table and you're just not fucking participating or taking responsibility.
SPEAKER_01: That's a great point. And we see this with equity splits because often sometimes it'll just be, hey, have you all thought about maybe, or how did you come up with the equity splits? Like, well, it's 90-10. Well, why? Well, it's my idea. Well, most of the work is ahead of you, not behind you. What if you went equal? People are like, okay.
SPEAKER_02: Yeah, fine.
SPEAKER_01: It's actually not that hard to fix this stuff sometimes, shockingly. It's just, they've never had the conversation.
SPEAKER_02:
Exactly.
SPEAKER_02: They almost expected the business person
to do right by them or like gave up their agency at all. And it's like, no, you have agency.
SPEAKER_02: And then I'll say, another thing is location. Sometimes you are in a place where your work isn't valued
and there are other places where your work will be valued more, whether that's geographic location company, da, da, da, da. That's a great point. And I think the last one that I observe a lot is that sometimes you have to take a step backwards to take two steps forward. So like, maybe you're stuck in a bad job
and like you have a lot of responsibility,
but you're not being given good compensation. You might have to go switch jobs into a place where you have less opportunity,
less responsibility, but better compensation. You can develop a better network.
Maybe you have to move. Maybe you have to take risks. Yeah, like maybe you have to do something that doesn't feel like you have the perfect next thing on your resume because it sets you up two moves down the line, right? And I think sometimes people are like, look at their careers very linearly instead of saying like,
SPEAKER_02: it's the end that matter, right? It's like, can I retire, raise my kids, da, da, da, da, da. And like, maybe the path to get there isn't just this linear step-by-step.
So anyways, what would be your last parting piece of advice for someone who's a suspect in this world?
SPEAKER_02: Look, technical people know your worth
SPEAKER_01:
and if you're a really nice person, those are the people that tend to get ripped off the most. Follow our handy checklist and find a place where you're appreciated and valued the way you should be because you have this amazing, rare skill.
And for those business people listening to this,
SPEAKER_02:
don't exploit folks.
Be honest, be upfront, right?
Like make decisions that they're gonna,
that your people you work with are gonna be excited about today, but also tomorrow.
Cause like, if that amazing tech person leaves your company,
you're fucked.
All right Dalton, great job. Thanks.
