My story, along similar lines: Microsoft was recruiting me for two years, starting in 1994, while at my first startup. I kept saying no. I left the startup to work, by myself, on an early ORM for Java, (back in JDK 1.0.2 days).
Microsoft approached me again, offered to buy my technology for a close to $1M, give me lots of equity (back when that stock was growing quickly), and roll out my product, (this was before Microsoft dumped Java). I would then go to work on what they wanted me for originally.
A couple of trips later, I just didn't like Microsoft, and started searching for alternatives. I found a little Boston-based startup who needed my product, and who I liked a lot. (Actually, the guy who put me on the trail of this startup had just gotten his company acquired by Microsoft.)
I got drunk, called the VP putting the offer together, and said thanks but no thanks. He said I'd be sorry.
I wasn't. I didn't make nearly as much as if I had gone to Microsoft, but I built and shipped my product, stayed on that product, worked with Java (which I liked) instead of the MS platform (which I didn't), learned a lot, had lots of fun with it, and saw the equity turn tangible. Couldn't have asked for a better outcome.
The thing you were building was worth more than one million dollars to you? It's good that you're pleased with the outcome, but the notion just seems really bizarre to me to give up one million dollars just to keep working on one programming project on my own. Maybe there's something about it I'm just not "getting".
I was confident of a good outcome either way. Microsoft was a safe bet, but for the startup, I was foolishly optimistic. It did work out well, but I was very lucky.
As it turns out, Microsoft would have been several times better financially, (primarily due to stock appreciation), but I really couldn't see staying there for the five years required for everything to vest.
Yes, but one million dollars just seems like a huge sum to give up for one project to me. I'm not saying they made the wrong choice, it's just one I can't see myself making. $1M is a decade of $100k a year. Money might not be /everything/ but that's a pretty comfortable life while you work on other projects or hold another job with no fear of running into serious financial problems as long as you don't do something ridiculous.
I feel the same way with the majority of these "I turned down their offer" stories. I admire them, but $1M (even across 4 years), to me is a lot of money. Enough to fund a new project and then maybe I'd think about turning down future potential buyouts having the financial stability.
A big chunk of that $1m will be gone to taxes, as someone in another comment has already mentioned.
Also the taxes at the time were much higher; so the impressive $1m starts to look much less impressive when you add in the fact that it probably vested over a very long term and that he was going to be put to work on something he didn't like for a long time.
It's classic cognitive dissonance - they realize they made the wrong choice, so expend energy and time justifying it and explaining how they made the right choice every chance they get, as though eventually they will convince themselves. And they probably will, in time.
Sorry, but no. It was the wrong choice financially, but the right choice for my emotional well-being. I also reasoned about regrets years down the road -- I'd probably regret not having tried my own thing.
And I don't explain this "every chance [I] get". I think about it rarely, and discuss it even less. I've done well enough financially that giving up the Microsoft cash just doesn't matter. I just mention it here because it seemed relevant to the topic at hand.
You really don't know if you made "the right choice" for your emotional well-being because you can only see one of any number of possible outcomes.
If you'd have gone with Big Bad Microsoft, a lot of things could have happened. At the instant of deciding - you could have learned how to make decisions based less on emotions and more on logic. You could have helped change the company culture instead of being relatively ineffectual. I wonder - what has your hate-based (I assume) decision really changed for anybody outside of a small Boston startup?
Being neither Vulcan nor omniscient, just human, I had to make a decision with imperfect information, and my instincts did play a role in that decision. Improving Microsoft corporate culture was not my goal. Improving the world was not my goal. My goal was to work on software that I was driven to write, using technology that I enjoyed using, and to provide a comfortable life for my family. I did all of those things.
I don't "hate" Microsoft, but combining what I knew of myself at the time, with what I observed at the company, I concluded that I would be happier elsewhere.
> You really don't know if you made "the right choice" for your emotional well-being because you can only see one of any number of possible outcomes.
The technology for that is not available yet.
It's interesting to speculate what would happen if everyone had perfect knowledge of the ultimate outcome of every decision and optimized them for their own goals. It would be a completely different world.
It's phenomenal how some people believe they know what is and was best for everyone else based on their own assumptions. He made a decision you wouldn't have, under conditions you weren't in based on priorities you clearly don't agree with and having had different experiences than you, but hey, because he didn't take the money, he's wrong.
I used to think this way, and that saddens me... I hope you get over it, too, and realize that other people want and do different things, and not only are they rarely categorically wrong or right, even if you consider them as such, that is your opinion, and it's no more valid or invalid than someone who does something of which you do not approve and comes away from it satisfied.
To be fair, most people misconstrue the moral of the fable as being about envy and bitterness, when it's mainly about rationalization to make one feel better about something unachievable or missed.
I don't know C#. As someone else noted, this was before C# was around. I had been working in C++ for several years prior, (and in fact, built an ORM in and for C++), and Java was a step up in many ways.
This was inspiring in a way many "how I started a company" posts aren't.
I also appreciated the transparency re: the retention package offered to him in the Powerset acquisition. As a younger engineer, I've spent a lot of time focusing on salary numbers (going from $70k to $90k to $100k to $122k in a few years, and across a few companies), but I'm starting to see how that's less informative than bonuses/stock grants, where the real long-term incentives and house-buying/lifestyle-company-starting capital comes from.
Are there forums where folks openly discuss numbers like these? Glassdoor can be confusing sometimes, where it's unclear if folks are putting down their pre-tax salary number or their [salary + sign-on + annual bonus + RSU] number.
That's practically identical to my first few years after graduation, and it didn't stop going up. It's pretty crazy how much your salary grows by switching jobs.
I'm now about to dump my full time contracting and start my own company.
The interesting part for me was the "I am accustomed to the six-digit lifestyle".
For this and other reasons, I consciously try to keep an asset-light/expenditure-light lifestyle (which is easy to do at college-age). It's not that I like to a hip startup guy that is proud of eating Ramen every day (I fucking hate Ramen), but not having to have to face a tough decision because of my lifestyle.
You can have a fun and a great life-style for little money.
I have the six figure income and don't really spend much of it on anything. Like what could I possibly spend that much money on? Go out and get the most expensive thing on the menu every night of the week? Fill closets with designer clothes I'll never actually wear? I have no idea.
So I just throw a huge cash pile into savings paycheck after paycheck, year after year. I feel like I could develop some alternate career that I could enjoy more, like working on cruise ships or music video shoots or something. Makes me wish I had crappy food service or retail jobs when I was younger so I had some alternate experience to draw from.
Find CDs with a low early withdrawal penalty (Ally bank for example) and you've for many intents and purposes eliminated inflation risk, to which the bonds are vulnerable. Inflation may not go up, but it certainly can't go much farther down. See for example http://www.cbsnews.com/8301-505123_162-37741854/four-cds-tha....
I wish that I could take a 30% pay cut and work 30% less and do something else with the time. Or even a 50% pay cut for 50% less time.
I like programming, but I find sitting in an office chair 50 hours a week incredibly boring, frustrating, socially stifling
I don't know what else I could do, having no experience and would have to go back to minimum wage. Odds are I might just get bored with whatever that would be after a short while
At 29, I was married with our first child on the way. So 6 digits don't really stretch all that far. Of course, there is a huge difference between 100,000, 500,000 and 800,000. All 6 digits...
It's interesting that his employment offer was a salary plus a $300K bonus over three years, and just a few years later GitHub is valued at around $1B.
Not only that, they didn't take any funding in the beginning. (It was bootstrapped completely for many years -- its first ever funding was a $100M round valuing GitHub at $750M.)
A long time ago, I did my undergraduate thesis at UW on a project called Kimera [1], a bytecode verifier for Java back in the days when such things were still pretty novel. I came across a nice fuzzing technique to test our verifier using Sun's and Microsoft's (all other verifiers being the former) as oracles. After we found all our bugs using this method, we began to notice bugs in the other verifiers, and we were able to turn one of these bugs into a full on security breach in the Netscape browser.
So we got Microsoft's attention (not that far from UW), we met a few times, and they offered to buy our test suite/technology for an amount of money where my share would have been a lot for the time. However, the professor in charge decided to spin the tech off into a startup. The startup eventually failed, but I think the decision was reasonable considering this was during the first dotcom boom and everyone else was doing it. I also got some nice consulting income out of it, and the whole Java thing at Microsoft came tumbling down a few years anyways.
At the end of the day, I still wound up working for Microsoft after grad school :)
Absolutely. And I say this as someone who's turned down many lucrative opportunities to "follow my heart". If you're going to do it, don't do it for the money. Turning down a mid-six-figure offer to start a billion dollar company is most certainly an outlier, on both sides.
If you're going to turn down money in hand for something speculative in your own life, do it knowing how much time, money, and opportunity you can afford to lose, and do it because it's something you really believe in. Even if you fail, you can land on your feet with an experience you'll never forget.
Just don't do it out of some crazy notion that destiny rewards the reckless, which is where the survivorship bias comes into play.
"[...] At 29 years old, I was the oldest of the three GitHubbers, and had accumulated a proportionally larger amount of debt and monthly expenditure. I was used to my six digit lifestyle. [...]"
Now, how does it happen that a guy earning six figures "accumulates a large debt" over time?
Eventually, it catches up with you, and either austerity ensues or you go bankrupt. Happened to me a couple of times as a kid (via my parents, not my spending of course).
It doesn't have to mean being in debt, although I think for a lot it does. It can just be living paycheck to paycheck through most of their life and using credit to buy things they can't afford. The worst part beyond the stress it puts on a family is reality is forced on them around retirement, when it is really too late to change anything.
He didn't say it was a large debt, he said it was a proportionally larger amount of debt. That could mean $15,000 on credit cards, or a mortgage, etc. (while his pals maybe had a fraction of that).
Also, obviously earning six figures doesn't inherently dictate financial responsibility. Just like someone making $50k can accumulate $20k in debt easily, a person earning $125k can accumulate $50k in debt easily. And there can be exceptionally good reasons for having debt.
Great that it worked out for him, but I can't see myself risking bankruptcy and all the other things that could go terribly wrong running a startup when I have a 300k job offer at Microsoft.
Yes, but was he really risking bankruptcy? What was the worst case outcome of his decision? If GitHub eventually failed, I highly doubt he would go bankrupt. He would just have to find a new job, which for someone offered $300k from Microsoft would presumably not be difficult. In fact, he could probably walk right over to Microsoft and ask for a job.
A lot of these "life changing" decisions are portrayed as "risking bankruptcy" vs. job security. But for a talented developer, job security is not a fleeting opportunity. He could always choose to find a job later. He only had one chance to go with GitHub. When you think about the decision like that, the choice is obvious.
Maybe I'm overestimating how bad it really is when your startup attempt fails.
Here's what I'm imagining:
Working on a startup full-time without a job, before it starts earning money on its own, you're losing money constantly to bills and food. If your startup doesn't start getting profit soon enough, your stored money runs out, and you either have to live with a friend/family, or worst-case, become homeless unless you found a new job before the startup went totally under (you might not get any interviews in this time or get to the interviews and not get the job). Getting a job after running out of money living with friends/family, it'll have to either be remote or somewhere you can ride a bicycle/walk to, unless your friend/family lends you money or drives you around (less likely). I wouldn't feel safe having to use a bicycle as my primary transportation -- if my legs get tired I've gotta walk or find a bus. Showing up to your job interviews sweaty and exhausted probably doesn't leave a good impression. If you're homeless, I guess it might be possible by some stretch to remote from public libraries? More realistically, I guess you'd have to get a job at a supermarket or something along those lines and soon after that be able to sustain living at a low-rent apartment somewhere (if you live somewhere with reasonably-priced housing available, which you probably don't if you're in the startup hub of San Francisco). In the mean time you could shower and keep your clothes in a gym; I've heard lots of homeless people do that. Getting a job now and going through an interview at that point would probably be harder than before due to more stress, less good sleep, and so on. Hopefully you wouldn't lose all your possessions in the meantime.
Maybe I'm just too inclined to think pessimistically. The average outcome of a startup failure probably isn't that bad. If one option is a 9/10 chance something will turn out amazingly but a 1/10 it'll be a long-term disaster, and the other option is a 100% chance things won't be /amazing/ but they'll still be pretty great, I'll almost definitely go with the second one. I guess I'm just not the type for this kind of thing.
Presumably you would seek other income opportunities before you're so destitute as to be homeless. And that doesn't always mean quitting your startup, either. Many people or startups take on consulting projects while they're getting off the ground to make ends meet. There are many opportunities out there for people who have a demonstrable history of making real things happen.
Also, in big cities where startups usually are, it's not usually that hard to get by without a car.
Right, I'd just be afraid the other income opportunities might not come along, but apparently that fear isn't too rationally founded and programmers are in a pretty decent demand, according to what I've seen.
>There are many opportunities out there for people who have a demonstrable history of making real things happen.
Even if it was a failure?
>Also, in big cities where startups usually are, it's not usually that hard to get by without a car.
I used to get a bit tired just walking around my high school. I've never lived in a city, though. I'd probably adjust well enough eventually.
It sounds like the salary was not $300k--there was just a sort of $300k bonus which would be paid in installments over the course of several years. At least that's the impression I got.
Now, I also wonder how much I would be worth today if I had jumped ship in 97, 99, 2001, etc when the opportunities were either there or I could carve them out.
This is an extremely interesting story for me. I just had to make a similar decision.
I had always wanted to work with Stuart McClure (https://twitter.com/stuartmcclure), and I was fortunate enough to do so. I joined Cylance (his new company) in September of last year, by February I had to make a choice.
Get in love with Cylance full time, or continue to have a love affair with iKnode. I choose to continue with iKnode, and on February I quit my job. It was an extremely though decision because I loved that company, and the team... it was basically a dream come true.
I, too, quit my job to go after the Holy Grail. And things have been great. It is true that this kind of stories (like the Github one) is extremely inspiring. You want to go ahead and do it as well. But there are so many implications to it. It sounds so interesting when you read about it, but doing it is an extremely different story. You fill yourself with doubt and uncertainty. Specially when you 2 kids to feed, and still keep your sanity.
I can't say that looking back, I feel great about my decision, because I am not out yet. I am still living the consequences of my decision. I know the iKnode team is very happy that I decided to stay. And I know for usre I will definitely write a similar blog post in the following years. I know we will be successful. I know I made the right choice.
> I was still working full time at Powerset on July 1, 2008
I'm curious how this works normally. He was employed full time at PowerSet nine months after he started working "full time" on Github. What did Powerset think of his devoting his time and energy to Github? What is the industry norm? What about the IP issues that complicate the matter? Couldn't Powerset have claimed ownership over Github since he was a salaried employee?
California has fairly strong protection for employee's intellectual property in stuff they do on their own time that is not relevant to their employer's business. This protection is, admittedly, more effective if you're employed by a small company with a focused business than if you're employed by a major corporation that does a bit of everything. But github doesn't sound much like a natural language search engine, so I doubt there were any IP issues to worry about.
Tom, you have the guts that many of us aspire to having. I'm sure I speak on behalf of the community when saying thanks for deciding to go with GitHub! Making that decision, you have have set a new standard in the world of development. Forever.
>“wow, that was an adventure,” not “wow, I sure felt safe.”
Love the ending! Reminds me of a someone from my childhood. Us being the annoying kids would tell him "smoking kills 10 years of your life"...his optimistic response would be "the last 10 years suck anyway."
Atlassian always had that Adobe feel to it - there was a wobbly mirror between me and the way the code underneath wanted to work.
Its hard to explain but it is best put as - github (untill v recently) does not feel as if decisions are made by somone in charge of others where the others get it, but the someone just does not understand it quite right
Microsoft approached me again, offered to buy my technology for a close to $1M, give me lots of equity (back when that stock was growing quickly), and roll out my product, (this was before Microsoft dumped Java). I would then go to work on what they wanted me for originally.
A couple of trips later, I just didn't like Microsoft, and started searching for alternatives. I found a little Boston-based startup who needed my product, and who I liked a lot. (Actually, the guy who put me on the trail of this startup had just gotten his company acquired by Microsoft.)
I got drunk, called the VP putting the offer together, and said thanks but no thanks. He said I'd be sorry.
I wasn't. I didn't make nearly as much as if I had gone to Microsoft, but I built and shipped my product, stayed on that product, worked with Java (which I liked) instead of the MS platform (which I didn't), learned a lot, had lots of fun with it, and saw the equity turn tangible. Couldn't have asked for a better outcome.