Ask HN: Were you screwed at your startup?

[tzz]

In event of Snapchat settling with an ousted cofounder Reggie Brown and admitting that he originally came up with the idea, is there anyone else who got screwed at their startup? What lesson should we learn from your situation? How can we protect ourselves from being screwed?

[throw481481]

When I was in college, I did a startup with my brother who was living on the other side of the country in New York. While in school, we began to get early traction. Being naive, he talked me in to dropping out after finishing off the semester. And so I moved in with him. I got to work right away, but my brother continued his full-time job, which we had planned he would do for a short period of time. Note - this agreement was informal, nothing was formalized. We also agreed that he would work as much as he could on the startup on the side, and pay me a stipend to cover my living expenses + spending money as long as he was still working full-time.

As it turns out, business is business, even with family members that you trust. He ended up almost never helping me on the startup. He didn't quit his full-time job, and blamed me for not creating enough value for the startup. This blew my mind since I had done everything (design, development, sales, marketing, social media), when all he did was chip in 10k or so for 4-5 months of runway. He left me to do all of the work, and legally I couldn't do anything about it. Finally, he stopped paying me.

The worst part is feeling exploited by someone you love and care about. I have no doubt he would have committed to the startup had I gotten significant traction. I'm actually glad it didn't work out, because I would have just probably been screwed over even more down the road. It's sad knowing that family will even do this - burn a close relationship just to get dirt-cheap equity in a startup. "If it goes well, commit to it, if not, you just saved 60k by not having to hire a full time engineer. Plus you won't have to quit your high paying job, so there's nothing to lose!" - I feel like this is what went through his head.

I can't speak towards getting screwed on an idea, but if I learned anything from this it is that nobody can be trusted. Sure, I'll start another business one day and will be vulnerable to my cofounders, but never to this degree. Get it on paper, always. And constantly ask yourself, what is the worst thing that could go wrong at this point in time. Always be prepared for it to happen. If you aren't open to this, you probably shouldn't start a business, because sometimes things go even worse than you might think is possible.

[foolishdream]

My advice is: Don't join a startup*

*until you're experienced enough. You must be able to distinguish short term and long term greedy behavior, be able to act selfishly most of the time without appearing selfish, understand and practice game theory. Until this point, you're just going to be taken advantage of until you're either sucked dry, or you've learned all the right lessons.

Every non-exec employee that joins post cofounder up until a year before IPO or 8-9 digit acquisition gets below market compensation. There are hundreds of startups and probably tens of thousands of people that get chewed up in between.

Don't join a startup in this trough of sorrow, unless you're ok with getting less money. Hopefully you're getting better status, experience, position, power, leverage, or something tangible out of the deal. Money-wise you're much better off being a quant or Goo-ama-twit-book. Arguably it's psychologically healthier too.

The biggest problem in startups is the prevalence of low functioning psychopaths. You assume you both are long term greedy, but turns out they're just ruthless social climbers looking to take advantage of whoever is inexperienced enough to get exploited.

Take SnapChat Evan Spiegel for instance. Regardless of Spiegel's excuse to cut out Reggie Brown (whether it's lack of contract, lack of tech skills, lack of ability), Spiegel flat out denied that Reggie Brown made any sort of attribution. How ridiculous is it that he’s a potential billionaire and he's trying to stick it to his former friend and frat brother by denying that he had any involvement at all?

Evan is not the only low functioning psychopath by far. Once you get burned a couple times, you'll start to recognize them and their behavior patterns.

High functioning psychopaths are a different animal. They are usually long term greedy, and are great to work with as they have internalized game theory. As long as you both can mutually benefit, working with them is great. They are ruthlessly effective. They get deals done, manage people well, focus on the right things, and treat you very well. All you need to do is stay useful.

[rudimental]

I appreciate this response. Besides getting out and living life, do you have any good resources for developing the three skills you suggest- distinguishing between short term and long term greedy behavior, how to act selfishly most of the time without appearing selfish, and understanding and practicing game theory?