Startup Employees As an Organized Labor Group

An anonymous reader writes "Last Friday may turn out to have marked the beginning of Silicon Valley's organized labor movement--startup employees met in Palo Alto 'to share war stories and to start developing what organizers called a 'Startup Employee Equity Bill of Rights'.'" That probably should include the right to work late, for little pay, and to trade less certainty now for greater hoped-for benefits down the road. If you've been a startup employee, or started one of your own, what would you put on the wishlist?

Comments

if 'stock' is part of your deal

[TheGratefulNet]

you are already being scammed. in the 35 yrs I've been in software in the bay area and boston area, I've known 2 people (at most) who made out well from shared in their startups. the first level bosses did ok but not great and the execs and vc's all bought new houses and cars (and boats and ...).

face it, wall street is a scam and stocks for you and me are a scam.

work for salary. don't work AT ALL for stock.

so many times I've seen it (even to myself) where they walk you out just before your first or 2nd vesting. it happens!!

do not work or even care about stock. you can't write a rent check on stock promises.

that's all that needs to be said. its a scam for those who are connected and rich. you and I will never be connected or rich. face it, the american dream is not there for folks like us.

I laugh at those giving away time from their lives and famlies for 'promises of stock money'. you could not be more stupid to do this. you get ONE chance at life and there's no reason to work 80 hrs each week and deprive your family and yourself from valuable life time. you can't get time in your life back.

Re:if 'stock' is part of your deal

[fermion]

Startups tend to employee young or inexperienced people. They also tend to not use cash for employees. They focus on the lottery aspect of the startup, that you might get huge sums of money later on. It is a sophisticated model. For someone just out of college, how has fewer expenses than a mid career person, it can make sense. One might gain experience, and one might make money. I would say research the type of stock options, the risks, and assume you will never get them. Be aware of the significant tax liabilities. I have seen people wiped out because they owned stock that then became worthless due to tax liabilities and leveraging. Organizing mostly happens to older employees who looking to negotiate with the employer for safer or better compensated or more protected situations. Tech work is not in general dangerous. It is generally better paid than other jobs at the same skill level. Outsourcing is already widespread so that boat has left the dock.

Good luck with that

[Wonko the Sane]

"Last Friday may turn out to have marked the beginning of Silicon Valley's organized labor movement" should read "Last Friday may turn out to have marked the end of Silicon Valley." Once "organized labor" successfully infects an industry, it turns in to a dead industry walking.

Since tech startups are particularly location-independent, expect to see more of them started elsewhere (and outside the United States entirely) and fewer of them to start in Silicon Valley.

Re:Good luck with that

[iluvcapra]

This is simply a consequence of the fact that tech startup remuneration schemes just don't work anymore, and people have been coasting for the last decade hoping the 90s would come back, and they just aren't. You can't just take programmers who would make over six figures in the market, pay them a pittance and stock, and then never have the stock pay off -- this'll work the first few times, but not for years.

We also can't ignore the fact that, though we measure "innovation" in the number of startups that are founded, a lot of these startups are just really dumb, unsustainable ideas that would be much better off being developed by larger companies (if at all), and the whole reason its a startup, and not a MS/Apple/Google R&D project, is to give the founders a big payday from VC funding rounds, and to give the venture capitalists a big payday off of some patent the company will file. Yay intellectual property! It's just a big rent collection scheme dressed up as entrepreneurship.

Tech startups are rarely designed to make money, they aren't really supposed to, they are really just a fiction to get the connected parties as much cash as physically possible before the whole thing burns out. It's been a scam for a decade, but a lot of tech people are deeply emotionally invested in the system, because it means catered meals and beers in the fridge and Ferraris for everyone up and down the Camino Real and satisfies their deeply-held emotional belief that being a computer nerd entitles you to vast wealth and privilege, because you're "reinventing the world" or some such nonsense.

A very similar thing happened in the film industry between the early twenties, where it was basically a gold rush from the end of World War I to the invention of sound film, and there were hundreds of little fly-by-night producers making movies left and right, and there was tons of "innovation" in the sense that a lot of content was getting made, but everyone under the producer was making nothing. Then everyone unionized.

A lot of tech will say in Silicon Valley, it's just too close to Stanford and all the good people. But, they'll actually have to be paid for the work they do, in money and not in magic beans.

Re:Good luck with that

[DoofusOfDeath]

A lot of tech will say in Silicon Valley, it's just too close to Stanford and all the good people

As someone who works in Cambridge next to MIT, I'm skeptical that Stanford has all the good people.

Re:Good luck with that

[Zontar_Thing_From_Ve]

This is simply a consequence of the fact that tech startup remuneration schemes just don't work anymore, and people have been coasting for the last decade hoping the 90s would come back, and they just aren't. You can't just take programmers who would make over six figures in the market, pay them a pittance and stock, and then never have the stock pay off -- this'll work the first few times, but not for years.

One of the problems is that the number of people who are actually eager to work under these conditions is quite large. I've found that some people like startups because they cannot handle working for large companies at all. Also, I've found that some people who work for a startup that actually made it get very arrogant and decide that it succeeded because they were geniuses and any old company they join in the future simply cannot fail because they'll be part of it. It's been a little amusing to watch from a distance as some of these people have to keep looking for new jobs because the new startups they went to don't make it.

Re:Good luck with that

[iluvcapra]

One of the problems is that the number of people who are actually eager to work under these conditions is quite large.

I work in the film industry and the problem is really similar -- this is why Hollywood has a guild system. It's really the only way to make sure that there's any reward at all for being good at your job and sticking with it; it also makes things like health care and retirement planning much more portable and less dependent upon employers.

There's a collective action problem, particularly in businesses where the work isn't a commodity, where high-skill labor exists and employers may want to hire it, but competition with other firms on prices keeps their margins low, and thus keeps them from ever being able to afford it. It just becomes easier to hire whatever is churning out of the school system, burn those people out, and then move on to the next group. You can make a lot of money but it's not sustainable, eventually the employers in such a trade will tend to turn to collusion or lobbying to keep high-quality competitors out of their market (many national film industries work this way, like Italy's and Spain's).

Re:Good luck with that

[dbIII]

I'd say Detroit is more of an example of why you don't hand management of a large multinational company to your idiot relative and his drinking buddies. They had decades to deal with a loss of market share to the Japanese and they had their own people showing them how to do it with some of the models made outside of the US. GM and Ford plants which paid far more to workers than in Detroit managed to succeed while Detroit did not. When it gets down to it wages are a tiny portion of the total costs of making a car anyway.

Stock

[Registered Coward v2]

A guarantee of a fixed percentage of ownership of shares of the corporation and any follow-on corporation so when it needs a bunch of cash your share doesn't get diluted to basically zero.

Re:lol, yeah, overpaid techies need a union

[funwithBSD]

If you are organizing your labor, you have agreed that the market pressures do not support your payscale.

Downward pressure on wages does not happen unless the market is flooded, or your skills are not in demand elsewhere.

Don't like it? Get a better skillset and go somewhere else.

As you say, Risk is part of the deal.

Note: I am facing this mentality inside my company right now. I want to move to a department with greater opportunities, greater pay/bonus structure, but risk of being fired if I don't deliver. My co-workers and management are trying to get me to stay, and one argument is the "safety" of our department.
I should probably paraphrase Franklin about security and freedom at this juncture...

Re:all of IT needs an union

[funwithBSD]

No thanks. I don't want to be passed up because you have been at the company for 1 day longer than I have, but don't know as much or have better skills than I do.

I will take risk over Union stagnation any day.

Re:all of IT needs an union

[dentin]

I will close my company before I allow a union within the ranks.

Bunch of pussies

[PeeAitchPee]

If you're not comfortable with taking on risk, busting your ass, and doing anything it takes for a very small CHANCE at hitting it big -- then don't work for a startup. Period. There are many other software / IT jobs right now -- no need at all to work in startup land. But don't try to fuck it up with this "union" nonsense talk. All you'll accomplish is dragging down those who are truly talented and deserve to be there.

If you do go that route -- get educated. Pay a lawyer a few hundred bucks to explain the docs you are about to sign which grant options, have a vesting schedule, etc. If you don't, you're a retard and you deserve to be taken advantage of. But this "unionization" talk runs completely counter to the very DNA of a startup. Face it -- some people are willing to work 80+ hrs / week. If you're not -- fine. But don't fuck it up for those who *choose* to do so and try to out-work others to gain an advantage.

Not a union, just legal clarity

[kimanaw]

I don't think the group was advocating for unionization, rather, just a better education for employees. (I actually watched an interview with the gentleman on Bloomberg that was pretty enlightening, despite some snarky comments from the hosts)

As a multi-startup veteran (without much to show for it but a few scars), the biggest issue is how opaque ownership percentages are. The current SillyCon Valley game is to give 5-6 digit option grants - so it seems like you're getting a lot - when there are 10-12 figure shares outstanding - and it can be impossible to find out that last figure.

Another complaint is the legalese of grants, which is usually waaay over the top, so you end up spending a lot on lawyers to translate the terms. The grants should be in "plain English" - most of the terms are pretty simple, once you clear away the legalese.

And another big deal is the little things that you might overlook, e.g., is there an acceleration clause if the startup gets bought out (very possible in this age of acquihires), or what happens if the startup actually IPOs: can you sell on the open market, or only back to the investors (which can limit your profit) ?

Also, on the topic of acquihires, if your startup gets bought out and you're a key employee, then your options may not mean anything, cuz you can -and should! - negotiate whatever you can get when the deal goes down. So it may be better to position yourself as a key contributor, than to get hung up about options.

Re:all of IT needs an union

[mjwalshe]

M&P (managerial and professional) unions dont work that way :-)

Re:all of IT needs an union

[Chibi Merrow]

Oh then you want Basic income and universal healthcare.

Honestly if we had a universal minimum income then unions could become completely irrelevant. Then if your working conditions aren't acceptable, you just quit. Honestly it's a much better solution.

Especially since you'll never get someone like me to join a union...

Re:all of IT needs an union

[dentin]

I never said that workers didn't deserve rights. In fact, as someone who has worked part time, full time, and as a contractor, I know very well what rights employees have, and why they have them. Employee rights have nothing to do with why I will never tolerate a union presence.

Hiring is between me any my employees. I treat them well, and they do good work. If an employee and I have a problem that's not resolvable, we part ways. I don't need and won't have a third party coming in to tell me or my employees what they should be doing, who I can and can't fire, who I can and can't promote, and who can and can't quit.

Boycott if you want. If I can't have the freedom to work with who I want when I want, I'll either take my business overseas or hire independent contractors. Either way, I'll still provide the same service and people will still buy it, but I'll be paying taxes to a government that doesn't allow organized labor extortion.

Re:all of IT needs an union

[Anonymous Coward]

I used to have this view. I hated unions and read all the stories about guys just standing around not doing anything. Then I went to work for a union shop and joined the local. WOW. What an eye opener that was.

It's simple. You and the employer enter into a contract. If one of you doesn't uphold their end of the contract then the breaching party is taken to task. It's that simple. When some PHB is having a bad day, he isn't going to take it out on the pee-ons because then a steward will be standing on his desk calling him to task.

You want to be able to fire someone because you dont like the color of his shirt? OK negotiate for that when the contract comes up. Everything is negotiable. But there will be a price the other party demands. But that is not what an employer wants, an employer wants to be able to fire you at will with the implicit threat of blackballing you with other employers, while of course the employee has no recourse. All the union does is level the playing field.

And yes, there are corrupt people in unions, just like there are corrupt people in business and govt. You get what you put into it.

Look to Detroit

[RudyHartmann]

As soon as techies start making unacceptable demands on management, the companies will just pull up stakes and move elsewhere. Then wherever the unions started agitating will end up like post-apocalyptic Detroit.

http://youtu.be/eUY8NJAly1I

Re:all of IT needs an union

[dentin]

I already negotiate these kinds of things with people, without a union involved. To me, it's just the other side of the table, and I very much remember having to negotiate my long hair and keeping intellectual property intact when I was interviewing.

It's not about getting the maximum possible dollar in the short term. It's about both parties getting what they want out of it, in a way that's sustainable and lasts for the long term. IMHO the biggest problems in business aren't technology, they're people and long term planning.

Re:all of IT needs an union

[dentin]

I don't object to signing a contract with an entity that represents workers. I object to signing a contract that limits my ability to hire who I want when I want, and to fire who I want when I want. This is no different than objecting to a contract with a parts supplier that mandates that I can't buy parts from a different supplier, or objecting to a contract that requires I only use a given suppliers parts in my products. I know such contracts exist, and I know that some companies sign them willingly. My companies will not, and if necessary I am willing to pay more and/or put in extra effort to avoid such contracts.

At least with parts suppliers, you have reasonable confidence that the parts are the same, or similar enough to work. Employees however, are very much not the same: an employee is more like a custom designed factory than a part, and every single employee is going to be unique and different. Those differences matter, and they matter a lot - employees are not just skill and technical knowledge, they are also personality, temperament, life goals, and sometimes, family. Treating them as replacable cogs, as unions invariably do, does everyone a disservice.