Startup Winter: Hacker News Lost Its Faith
184 comments
·January 21, 2025KaiserPro
aqme28
I was the second engineer (series A) at a company that IPO’d at a unicorn valuation. By all rights that’s a great outcome. I made about as much in that exit as I would have if I were just at a FAANG instead
itake
This tracks.
I think the real value employees get is riding the rocketship in their career.
Early engineers often have first dibs on higher level roles, like CTO or director over people that join late.
Your initial grant might not be great, but being director at such a company is huge
meritage31
>> I think the real value employees get is riding the rocketship in their career.
Startups hire those people when they are risky and the future is unclear. Once there is traction, the VCs and insiders bring in friends for cush Director/VC posts. Quite often the people who took the real risks get left out.
aqme28
Unfortunately, the company preferred to hire experienced ex-FAANG managers for those roles.
ragnot
You'll find that outside the startup, the director/vp/cto title doesn't translate. Larger companies will often write you off as being "not experienced" enough which is often code for "you don't look old enough for this position". Unlike engineering and the startup world, big companies want you to look the part not just know the part.
high_na_euv
What skills precisely you think about when it comes to an early engineer, but not founder/business person?
kijin
Yeah, this is often overlooked in all the talk of $300k FAANG salaries.
Few people get those senior salaries, and those who do get it because of their unusual skills and experiences.
A stint at a startup is still a pretty good way to get those skills and experiences, compared to spending the same amount of time as a junior developer somewhere else. If you can make capital gains equivalent to FAANG senior salaries while doing so, even better! But if not, at least you'll have come out with a more interesting resume.
swiftcoder
The other bit here is that hacker news attracted a lot more engineers (vs more entrepreneurial-leaning folk) in the intervening time - and engineers never really made bank on startups. Even in successful startups the engineers are typically lower on the pay-out ranking than the less-technical founders and the VCs...
diggan
> I think the bigger issue is that most of the financial upsides of startups were illusory
I wouldn't say I'm an old-timer by any metrics, but even back in 2012 when I first discovered and joined HN, I remember it was pretty clear in the community (and people I spoke to around me) you shouldn't go to work at a startup if you were looking for "a lot + safe" money.
Sure, you could belong to the 0.001% and work on the next Dropbox, but most likely you would end up not, so don't start at a startup to chase riches, as there are better venues for that. Do work at a startup if the environment/mission/team feels right to you, but with no expectations of a big payday-exit.
pjc50
Here's a question: what's the list of startups fitting the criteria of
- after 2008 Great Financial Crisis
- actual startup, not spinoff from larger company
- financially successful exit
- early non-founder employees made a substantial amount of money?
rpcope1
Solidfire (which never got talked about at all on HN) fits the bill nicely.
nejsjsjsbsb
Why the after 2008 foundatuon criteria. Someone who joined FB in 2010 could have got rich right? Same with Google, Amazon, most other unicorns that established before 2008.
eamag
GPT: whatsapp, instagram, airbnb, slack, uber, snap
alexander2002
Technology is inherently a domination force and you can see this invisible domination battle between technology startups all the time.
Have a moat* or get exhausted battling against other similar startups until one is the major winner.
Technology is the easy part (for most people) Winning the battle is the hard part.
TO summarize, win battle=big-payday
diggan
That's assuming "Winning" means "More money", but that's not everyone's goal in life. There is plenty of space for smaller companies that earn enough profits to let every employee live a good life, without chasing unicorns.
Kye
I saw the same posts you did, but how many people actually listened? How many, instead, came back later asking how to salvage a situation that didn't match the dream?
There are always cooler heads raising alarms on these booms. What turns them into bubbles is the inflection point where there are more people coming for the dream than for the thing that motivates people who understand the risks and know the statistics.
I seem to remember 2015 or near it as that inflection point. Tech media went from worrying about the steady march of unicorns to not talking much about valuations.
the_af
The thing that puzzles me is the early "only eating Ramen and pulling all nighters" startup founder story. I suppose nobody believes this anymore, fortunately.
I mean... we all agree, it would seem, this is not the path to getting rich for most people. And it's unhealthy and stressful, so it's also not the best way to work.
So it has to come down to "the mission". You must be doing something so amazing, so innovative, a boon to mankind, that all else is secondary and you're willing to endure financial risk and a stressful job, right. Right?
But no. Most startups' products are unremarkable or banal -- with some honorable exceptions -- and mankind doesn't really care either way.
signatoremo
“The mission” isn’t the only meaningful drive.
It is hard to build a successful business out of even a most mundane ideas. That alone can be a great accomplishment that many people strive for. Also to be able to set and execute initiatives is also a great motivation. Seeing the fruits of your labor can be very rewarding.
t43562
It's so nice to see my homeland is famous for something! :-) Zimbabwe Dollars FTW. I have 500 billion dollars in a cupboard somewhere BTW.
KaiserPro
Sorry, I do love Zim really. I was looking for a metaphor that non-history nerds wouldnt confuse. Papiermark would have been better, but needed explaining.
fxtentacle
"Sell for half a billion and get nothing (2021)" https://news.ycombinator.com/item?id=39598903
plagiarist
This looks exactly like the story that convinced me I would never accept a loan with the preferred stock bullshit. Except the year 2021 is much later than when I decided that.
null
itake
> The only realy reason to join a startup is that you either believe in the "mission" or that you believe it will bring you joy to work in that way.
Or the startup was a stepping stone in your career. Big Tech wouldn't hire you, b/c you have a different background, so you work at a startup to develop experience and then switch to Big Tech.
KaiserPro
I mean yeah kinda. But the skills for a startup map poorly to big companies.
Startup: you look at something, plan, execute, learn skills as you go. Big company: here is x, do as I say. You must use these things from these teams, don't make it yourself.
Coping with the step down in responsibility is hard. Going from owning the entire stack to not even having a real decision in planning is very hard to deal with, especially if you've done that $thing before, and have to mount effectively an election campaign to change direction.
praptak
Then go from a CTO to an L4 at Google.
dkdbejwi383
I've had one successful exit as an engineer. Made enough for a (very) fancy dinner for two, or a short city break. Just a fun bit of pocket money, essentially.
Founders made more than I'll probably earn in a lifetime.
kijin
Usually, the only engineer who has any chance of making a significant amount of money is the technical co-founder, often called the CTO.
The rest of the money belongs to the MBAs and the bankers. It's always been their money, it will always be theirs.
robertlagrant
Yes, that's probably true. Investors, or people who take a risk, get the payoff from the risk. If you join as a salaried person, you're taking zero risk (other than that you might need to get another job if the place folds, but then all the money's gone anyway), as you're just getting paid a salary each month regardless of how the company's doing, so you don't get an outsized reward.
robertclaus
My impression is that the disillusionment with startups has led to m a gradual shift towards small self sufficient software businesses. Some folks that would have previously started a VC backed startup for casual software ideas now just keep the scale down and supplement their income on the side.
dcminter
> What's changed?
Largely, the make up of the audience in HN. I sincerely doubt that the hard core of people doing startups, thinking of doing a startup, or just very interested in the topic has gone away or changed attitude very much.
But the profile of HN has grown. It's a miracle that it's still an interesting and curious group, but from comments I'd be astounded if there were not a far greater proportion of people who are here because they are generically interested in tech topics and not specifically startups. That broader group was always there, of course, just its proportions relative to the hard core of entrepreneurs has changed.
I'd love to see some objective analysis of how things changed after the twitter and reddit kerfuffles, but I don't believe the article's thesis that the zeitgeist is the cause.
PS I could live without the stories that violate the precept of "If they'd cover it on TV news, it's probably off-topic." ... but it's still pretty good here.
NoboruWataya
> I'd be astounded if there were not a far greater proportion of people who are here because they are generically interested in tech topics and not specifically startups
This is certainly me. Generally interested in tech (and many of the other things that HNers seem to be interested in these days), but no real interest in startups. Hope I am not ruining HN for the old timers.
I started using this place a lot more in the last couple of years as Reddit went to shit, so I suspect that was a big driving force in changing the audience here.
TeMPOraL
Relative out-timer here. I came here because of smart people having smart discussions about life, universe, and everything (tech or otherwise). HN both got me to drink the startup kool-aid early on, and then cured me from it later on, ultimately making me a startup-skeptic (and infecting me with an unhealthy dose of cynicism). I guess this is how growing up looks like :).
Ultimately, I still hang around HN because of high-quality discussions; there's really no other place like it, or at least I've found none. Or maybe after all this time, it just feels like home. Still, were the balance to shift hard towards startup talk, I fear we'd lose all the intellectual curiosity driven submissions and discussions - they'd just turn into sharing tips and tricks to make moar moneys with tech, which I personally find BOOOOOORING AF.
Macha
This was always me, and I've been here 15 years. It was pretty much a tech forum then (arguably more then than now, there's much more discussion of culture war issues now, even when stories are flagged it's ever-present in the comments). I think the time when HN was primarily startups was much further back and much briefer than most people nostalgically remember.
dcminter
Yes, but the proportions have still changed. It's not static, it's a progression.
2010 will have been different to 2008 (when I joined) but so will 2013 with respect to 2010, 2020 with respect to 2013, and 2025 with respect to 2020.
It's fine that it's much more broadly a tech forum now - but it's silly to infer things about the wider world by comparing attitudes in HN across eras unless you take account of the change in demographic.
As to the culture wars? Perhaps it's time for another "erlang love bombing" campaign to recalibrate :D (When was that anyway...?) Edit: Ah yes, it was in 2009: https://news.ycombinator.com/front?day=2009-03-11
chamomeal
Good point. I started looking at HN a few years ago, and though I knew it was run by YC it didn’t even occur to me that it at one point was startup-oriented
nick__m
As a Canadian in a low COL area working somewhere with almost absolute job security, a pension plan and plenty of opportunities for learning (I have a few 3 hours sessions on quantum computer starting next week :D ) I don't care much for the SV startup ...
I am here for the selection of interesting articles and the high quality comments when it's not a political thread (those threads have less rational lower quality comments and I am also guilty of producing some os them, I apologize dang).
swat535
If I were to make an off topic comment and by no means I am picking on you personally, however as another Canadian, I find this general attitude of Canadians towards innovation unsettling and dare I say it's the reason why we are always playing catch up with US. It's also the number one reason why we are bleeding top talent to Americans which results our nation great economy loss.
I suppose you can argue that we have more of a "European" attitude, to which I would respond that while we pay high taxes like Europe, we hardly get any of the social security benefits that they enjoy, so in short we end up with worst of both worlds: high taxes, low salaries and limited benefits.
You can't expect a nation to develop the next FANG when people's idea of business is purchasing a home in the "suburbs" of Toronto and renting out its basement.
P.S I hope you are staying warm in this weather..
nottorp
For the record, when i started to read HN I didn't even realize it's sponsored by ycombinator and is a startup launch vehicle for several years.
I'm here for the tech porn mostly. I do read the business related stories but I mostly retain everything but whatever includes "founder".
(My account seems to be made in 2016, so i suppose i started reading in like 2013-2014.)
hardwaresofton
Agree with all your points, just wanted to note:
> But the profile of HN has grown. It's a miracle that it's still an interesting and curious group
This miracle is probably just hard work in disguise -- dang et al. HN also has a self-censorship bias and some self-enforcement, but mostly not an abrasive kind -- people (mostly) gently remind each other of the rules, and sometimes viciously downvote comments that are not useful/in the spirit of HN.
toomuchtodo
HN and Dan’s work are arguably worth more than the VC part of YC. The VC side plays the capital musical chairs game (selling the equity to a greater fool before the music stops), this is the valuable output from that.
dcminter
Oh I entirely concur; I think there's a team of sorts, not just Dan, but I'm sure the gentle steering is a huge part of the reason things are still on course.
https://www.newyorker.com/news/letter-from-silicon-valley/th...
jajko
This is just another public website, various people come here since its interesting and discussions engaging. Its one of the last places which is free/public and discussions don't immediately turn primitive, political and emotional unlike rest of internet. People from various backgrounds come and have interesting things to say, which is often refreshing and enlightening (at least to this fella).
Many if not most of folks at this point have nothing to do with neither startups nor hacking. Neither do I for example, and I am here for a decade+.
yason
I'd say starting a company to make something people want in order to sell it for money is still relevant. It's just that you're looking at working quietly, humbly, but perseverantly for the next 25 years, slowly growing the business and balancing the risks and opportunities along the way. You won't be looking for an "exit" because you want to take care of the company you built. That's a very different story from whatever vibe it is that startups acquired after the dotcom boom, i.e. find something that hasn't been done before, scales quickly, and sell the company after a few years for 1000x, and then something.
That never was sustainable, I think, and effectively it became a glorified hiring process for big tech who bought the best toy companies to get to the people behind. And now even big tech figured it's cheaper to just hire the talent directly and not buy their token company for a few million first just to get the guys in.
Not saying a good company with a good idea and execution at the right time couldn't still make it big quick: there always were some lucky ones and there will always be. But the process isn't repeatably stable enough that there's a lot of wasted effort to make a few shooting stars. And everybody seems to be slowly accepting that. Go for it if the opportunity arises but if you spend 10 years trying and trying without the fish biting you're likely better off saving off from a decent salary when those years have passed.
Draiken
But at that point, does it fit a startup definition?
In my view, startups always involve rapid growth and VC money to achieve it. If the company doesn't meet that criteria, isn't that simply a regular business?
clumsysmurf
> you're looking at working quietly, humbly, but perseverantly for the next 25 years
> That never was sustainable, I think
Another aspect with this being (un)sustainable is lack of affordable healthcare. I bet many people would take more risks if they didn't have to worry about this aspect of their lives.
jimmydddd
Agreed. I was starting a small law firm (small biz, not a startup) and asked other dudes who had done the same what they did for healthcare. The all said the same thing -- I had my wife get a job at a bank.
cushychicken
The Swedes sure seem to think so. Per capita Swedish entrepreneurship is like 7x the rest of the euro zone, and they’re convinced that it’s that aspect of the social safety net that help prop up that high level of personal risk taking.
tossandthrow
IMHO building startup became a status symbol which means that the payment in respect for making a courageous adventure is lost and commoditized. We are slowly seeing the same for academia.
Point 2 resonates with me. Risk adjusted it is very unlikely that one will make a reasonable salary doing startups. So it is conviction and heart that needs to drive it.
For me, the main issue is that every time I voice the idea about building something I get bombarded with premature growth and commercialization concerns instead of excitement about how to solve the problem. I think this is endemic - the entire sector is short sighted and profit obsessed.
hardwaresofton
> For me, the main issue is that every time I voice the idea about building something I get bombarded with premature growth and commercialization concerns instead of excitement about how to solve the problem. I think this is endemic - the entire sector is short sighted and profit obsessed.
Do you think some of this is idea related? If you're building software, many new ideas are not truly innovative in a way that would make execution seem like the place to focus?
An experienced person might hear the idea and instantly have a general idea of how to build it -- but know that the real hard parts are distribution, finding customers, talking to customers, and building the profit flywheel that lets you do more of the previous.
Taking AI as an example just because it's hot right now, but it's a very different conversation if your idea is building a alternative to the transformer (assuming you're talking to someone who could even speak authoritatively on the subject!), versus building an "chatgpt wrapper" app, even if it's very complex/tailored to an industry. Most people won't be able to discuss the industry specific bits so they focus on the tech bits, and then the differences seem to be mostly execution?
MrLeap
> I get bombarded with premature growth and commercialization concerns instead of excitement about how to solve the problem.
I feel this. I keep thinking there has to be a competitive advantage in being more conscious about the creation than the extraction. The latter seems to be a strangling force on the former.
sureglymop
I highly agree. And I think in practice, what is driven by curiosity and passion ends up being a better product. I think part of the reason why is that all over social media and the internet there are gurus telling people "you can be the next to be rich and you deserve it". But that's the wrong motivation to have ingrained in every potential founder.
TeMPOraL
> in practice, what is driven by curiosity and passion ends up being a better product.
If it can survive. The problem here is that startups compete in the same economy as those more sustainable, passion-driven businesses - and because of their ruthless focus on growth, as well as access to vastly more capital, they win, effectively suppressing good products or outright preventing them from entering the market.
rUsHeYaFuBu
Free market thinkers here would say this is the market working as intended.
rUsHeYaFuBu
> entire sector is short sighted and profit obsessed
If you're in for-profit sector, I don't see why being concerned with the main goal first and foremost would be a bad thing.
No one's doing business or lending money to not see a return on that.
So if the problem is worth solving in this ecosystem it's worth it because it does actually turn a profit instead of some fantasy that it will magically appear at some imagined scale.
myth2018
> I get bombarded with premature growth and commercialization concerns
That general mindset was a major source of pain for me. I used to say I had founded a startup just to get along with the other entrepreneurs, but in fact I couldn't care less about fast growth, product-market fit and other common concerns in the field -- heck, "consulting" was in my list of services and some of my peers couldn't even wrap their minds around that concept -- and the ones who did, frowned upon it. They just kept asking about product, competitive edges and so on, while all I cared about was joining a growing market served until then by a handful of small but profitable companies in my country.
belter
We all run a Startup. It's called your own Career...
Temporary_31337
Pretend all you want but interest rates make a ton of difference. If you can make a safe, compounded, perhaps leveraged 5% from treasuries the financial bar that a successful startup has to pass is so much higher
benjaminwootton
Interest rates are like a dial which turns economic activity up and down.
I’ve always understood that in theory but it’s the first time I’ve actually lived through it and it’s wild.
A few years of higher rates and half of the tech industry and the people who buy tech seems to be on hold.
It makes me realise how vacuous the last decade was and how a lot of our jobs and businesses existed because of dirt cheap money. I’m glad I saved some money rather than thinking it was going to last forever!
jajko
If you were older, you would still consider current rates low and recent past an obscurity that couldn't last long. I can say that definitely about Europe, ie here in Switzerland interest rates used to be around 7% for quite some time and economy was doing fine, then it dropped to negative and afterwards people complained when they rose to 1-2%. 0.4% now, not complaining.
null
drc500free
Absolutely, and in practice it's not a well analyzed spreadsheet problem with a smooth transition. The change in interest rates moved necessary payoffs from the "later" bucket to the "soon" bucket.
A whole segment of product stories only worked when investors wanted to believe in them so that they could park their money there. With everything oversubscribed, products would get investment as long as success wasn't provably impossible - so CEOs and PMs optimized for inscrutability and constant pivots. More thoughts here:
https://coldwaters.substack.com/p/the-mystery-box-is-out-of-...
nejsjsjsbsb
SP500 returns too.
whiplash451
Point 5: even if your startup exits successfully, the math of exits are brutal for employees (even early ones).
Between double dipping for investors, accelerated vesting for the c-suite, and taxation intricacies, employees make out much less than they'll think even in good scenarios.
Everyone makes 10X less than their head in the food chain: investors -> c-level -> VPs -> directors -> senior staff.
nejsjsjsbsb
This is why later companies can be better. Either they are public or private but it is clearer what the stock is and could be worth. Best deal is to get actual stock not stock options.
aleph_minus_one
Concerning
> 4. The industry has matured. The low-hanging fruit of the mobile/web era has largely been picked, making truly innovative opportunities harder to find.
I disagree: In my feeling truly innovative opportunities are still rather easy to find.
I feel what rather changed is that with VC becoming big and mainstream, investors have become more risk-averse in investing into innovative ideas (that they don't really understand). Perhaps also society has become more conservative, so selling a really innovative product to a customer has become harder.
graemep
> Perhaps also society has become more conservative, so selling a really innovative product to a customer has become harder.
Customers are more locked into existing products. Network effects, switching costs, familiarity and branding, staff training (for businesses) and learning something new....
aleph_minus_one
I'd claim that also before the customers were locked into existing product. What is different is that in former days they were much more willing to get away from this lock-in.
The reason for this that I consider to be the most plausible one is that society has become more conservative (i.e. less willing to change things or try out new things).
graemep
Lock is has been a problem for a long time, but I think the lock in is stronger. You have dependencies between multiple systems, dependencies between systems, data that is no longer stored locally on machines you control, etc.
fxtentacle
I believe the main change is just that Hacker News went from being a very specific subset of the population to becoming much more mainstream. Ten years ago it was, at least in my opinion, mostly early adopters of internet technology and in general people who had enough funds that they could fail without being devastated. Nowadays, in addition to the traditional VC route, there's also the indie hackers movement. Those founders typically aren't friends with old money, so they will bring a different perspective on financial risks.
checker659
I can't say I agree. There were a lot of app developers on HN even as far back as 2009.
ludwigvan
Most engineers figured out that the options/stocks of startups are worthless.
nostradumbasp
9 times out of 10 the company sells, performs a reduction in force, or goes under before they vest. 1 time out of 1000 the company is worth something and remains operable over a 5 year period.
Rules of thumb for the green engineers:
- Take salary/health insurance over stock in almost all cases.
- At some companies employees who are greener and greedier will fight/sabotage all their peers to get rid of them, is this the type of place you want to be at? Insider fighting is often a big part of why these companies fail.
- Never pay into start up equity. If a company "offers you the chance to buy their stock" after X months/years don't do it and if you do, don't put much in. Have an excuse so no one gets offended like "I am saving for a house" or something. If you're looking at a 5k minimum simply don't do it unless that is peanuts for you.
- Make sure anything offered is in writing and completely understood before joining. Lots of things are said at final stage interviews. If it isn't in writing you are not getting it. Ask questions be annoying.
- Negotiate. Its the only way you can actually get what you want. If the stocks mean nothing to you unless you get them quick, negotiate that. Start ups close doors extremely suddenly every single day.
meritage31
>> Most engineers figured out that the options/stocks of startups are worthless.
Also, if the startup gives you options/stocks without showing up the cap table, they are giving you a numerator and not a denominator.
https://en.wikipedia.org/wiki/Capitalization_table
Never trade real cash for imaginary money unless you have the facts
consp
And if they are not worthless in general, they are worthless for you since you will get squeezed out because funders and founders need to take everything since they are the only ones who matter or do any work (/s obviously).
whstl
I certainly did. I have options/stocks from 3 different companies, all vested, but zero expectation of seeing any money out of it. One of them recently went belly up and had an exit for peanuts.
I didn't go for big tech but I did pick a job on a YC startup that, while demanding, allowed me to purchase my own house and work on my own stuff in the evenings.
schappim
We are now also seeing companies staying private much, much longer. This is tough on the employees who quite often can't offload their equity.
nejsjsjsbsb
Which makes FAANG + property investing + index pension/401k + other funds etc attractive. Maybe the occasional wsb style risk for fun.
Chyzwar
I think this is the normal trajectory of online forum. The initial cohort was positive and deeply invested into the topic. Over time, this initial cohort gets older and start to have life, slowly being replaced by new people. As long new people share initial ideas and archetype, it can continue to work well.
For HN case, initial cohort either become too busy with life and success and left forum or become jaded and skeptical about startups by experiencing it by themselves. The second group is still very active here, driving a lot of sentiment in discussion. HN also changed audience to be more general techy forum that startup forum. There are more people that want to discuss politics instead of technology (see deepseek, UK hardware talent to AMA with Peter Roberts). Any post about hiring is full of people whining about leetscode. Posts about process are full of agile haters. Even product lunches are full of open-source zealots, discussion of unrelated stuff like rust or useless feedback about website working slowing on 10 years old android phone with JS disabled. There is very little content for aspiring founders.
Finally, there is value in HN for discovery, just not for startup. You can learn more about startup/VC from Y Combinator YouTube channel, Saastr or even Harry Stebbings podcast.
bilinguliar
I value my own business for freedom, not money.
You don’t have to build a unicorn.
Business has to be sustainable; profit has to be higher than expenses.
nostradumbasp
I think this is the key to work-life happiness. Wishing you the best. Hopefully I am doing the same someday.
I think the bigger issue is that most of the financial upsides of startups were illusory
Unless you're a founder, you're unlikely to make any money, and predatory VC/backers using convertibles/senior debt to turn your equity into Zimbabwean dollars. Thats before any stats are calculated for lasting long enough to either IPO, make money or get bought out.
As someone who did successfully exit, the stories of multiple-millions being handed out turned out to be legends. Dodgy accounting & staff retention meant that actually you don't get fuckyou money.
The only realy reason to join a startup is that you either believe in the "mission" or that you believe it will bring you joy to work in that way.