Joining a startup: high salary, no equity OR "startup salary" with equity?

TL;DR: Push for stock options from companies who don't want to give them, and always avoid them from those that offer.

As a potential employee, the negotiation for equity is a great way to gauge the future of a new company.

If you know the signs, it can help you from getting screwed in the long run, potentially saving years of regret while waiting out the vesting period in the hopes the company will make it big.

It generally goes like this:

  • If founders openly offer lots of equity, chances are the company will never make it big. If you settle for equity and a lower-than-market rate, you're probably in for years of hard work that will never reap the vision you were sold when you joined the company.
  • If founders would rather pay a high hourly rate and offer no equity, chances are the company will succeed. This is a sign that there are big things at stake, and for one reason or another, they're holding their options close to their chest.

The founders who promise lots of equity by joining early are usually unintentional scam artists. They offer the world, but these founders are taking a stab in the dark (even though their idea might be good and well-intentioned) and generally have no real plan for execution. They're usually great salespeople who help you buy into the vision, but since they don't have a plan or the connections they need to make the company successful, you should stay away at all costs.

The founders who know what they're doing, have industry connections, and know their ideas will turn into profitable businesses will do as much as they can to maintain their stake. They don't need to offer copious amounts of equity because their idea and vision is enough to sell the typical prospective employee. And they're usually willing to fork over extra cash up front (market rate) to keep you happy.

(Of course, there are exceptions to this rule. But this is generally what I've noticed from my experience in the startup space.)

If you're facing the opportunity to work for companies in both categories, work for the latter who will pay market rate - who doesn't sell you the vision by promising fame and fortune. Opt for the company who knows what you're worth and pays accordingly.

The dance for something worthwhile is never easy. It's sort of like dating. If you go for the easy catch, are they really a catch? When you are forced to relentlessly persue (and then end up achieving) what you want, it's usually worth it.

The fight for equity at a company where equity will be valuable won't be easy to get. But if you keep these principles in mind and are able to fight for a meaningful stake, it's worth so much more than the equity that is freely handed out by companies that have no real future.

Update: There's some great feedback on Hacker News.

Why more companies should model customer service after Newport Lexus

There are companies who seemingly couldn't care less about their customers, and then there are companies like Newport Lexus. I've serviced my car at Newport Lexus for four years now, but the service has never been better than it is today.

Yesterday it was time to take my car in for service. I called and let my service rep know I'd be arriving in about 20 minutes. When I showed up, the paperwork was already filled out and my preference in loaner vehicles was sitting there waiting for me. All I had to do was sign the paperwork. I literally walked inside, sat down, signed on the dotted line, and walked out to my loaner. I was in and out in less time than it takes to make a latte.

It's refreshing to know that some companies still care about treating their customers right. This is the kind of level I try to give people who use the things I build, and I appreciate receiving the same kind of treatment. It's why we built Less Neglect - an amazing support tool to help us support our users of FolioHD and The Mux.

When businesses go the extra mile to make their customers feel special, the loyalty they'll have is far greater than if you simply provide adequate service. And that's what makes customers for life.

Oh, and if you own a Lexus in Socal, go visit Joey Wilchek at Newport Lexus.

We've got to do better

It's 2012 and setting up online accounts for things like credit cards, bank accounts and paying bills is still far too difficult. I spent last night helping my dad get set up with online accounts, and even for an average internet user like him, the process was horrific.

I was appauled at the number of ways web designers and developers continually make simple online tasks much harder than they should be.

It seems that few designers, developers and project managers of large web applications actually factor in how people actually use the internet.

Here are a few of the gaffes I discovered last night.

    Password Requirements

    Each site had different password requirements. Some sites required a special character like # or !, but other sites refused to accept such characters. Usually it isn't without trial and error that you realize this.

    (I've written ranted about password requirements before. I'm sure we're all in agreement that they should largely be abolished.)

    "Cancel Registration" Button? Seriously?

    Edison's registration form provided a "Cancel Registration" button their signup form, with equal size and weight as the "Submit Registration" button. I thought we all agreed this was a bad idea back in the days of the now-largely erradicated "Reset Form" button.

    Javascript Validation Gone Bad

    Another form didn't work with Chrome's autofill feature. It required the user to enter a 10-digit phone number (across three fields, of course). At the end of typing the last group of numbers, a second set of inputs appeared, requiring the user to re-enter the phone number to confirm accuracy.

    But because my dad used Chrome's auto-fill feature to enter the whole phone number automatically, it failed to trigger the javascript to show the second set of fields. This resulted in an error message telling him, "You forgot to enter a phone number" even though he already had.

    Making Answers to Challenge Questions Case-Sensitive

    This is always a bad idea. You might be surprised at how many people type things into fields in lowercase. But if you're asked to re-enter that info later (especially a proper noun)? You might capitalize it.

    "Enter Your Name as it Appears"

    Asking for bank account info, one form said to "Enter your name as it appears on your check." The name on my dad's check had his middle initial listed, followed by a period. He submitted the form and received an error message telling him periods weren't allowed.

    "If you created an account before August 18, 2005..."

    Do I even need to explain why this shouldn't even be on a REGISTER page?

    •  •  •

    Seriously, do we not even test what we build?

      My point: We've got to stop doing this. Even in 2012, we are still making web applications that still make basic tasks pretty painful. Quite frankly, it's embarassing.

      We've got to stop building for ourselves.

      As designers and developers, we sometimes get stuck in this false assumption that everyone uses the internet the same way we do. But we're in the minority.

      The next time you're building a form or creating a flow for a signup process, think through some of the issues that might come up as a result of your design.

      Watch a few people use your app. You'll be surprised at some of the things you'll see when looking through someone else's eyes.

      And the biggest point: Don't be lazy. That quick and dirty javascript validation you wrote? More people are going to be negatively affected by it than you think. Don't want to take the time to write helpers for each input field? A little clarification might save users a lot of headache.

      If you're interested in the topic of user experience and making things simple and easy for users, you should check out the book Don't Make Me Think by Steve Krug. It's a great introduction into avoiding a lot of basic usability problems that people still encounter every day.