Why do things need an exit strategy, why can they not simply exist and do good work and pay people fairly? Does everything have to exist purely to maximise profit?
>Does everything have to exist purely to maximise profit?
No, everyone is free to start a bandcamp alternative that does not sell out. But the probability of people wanting to "cash out" or trade equity for other things they want is pretty high. And so that is the world that we see, because it is a reflection of what people want.
Sure, but what people want as individuals and makes sense for them to individually do can nevertheless be harmful to society. That is what people are complaining about generally.
I don’t know how to combat the shift to a single monopoly/duopoly in every market though, but it’s definitely going to make our lives worse. Especially with the erosion of private ownership for us plebeians.
The employees who traded compensation for equity probably don't agree. Bandcamp's success is built partially on this trade and at some point it needs to pay off for them. I suppose they could stay private forever and give out profit-sharing bonuses, but I think people go into this expecting an exit.
Some people just want to work at a decent company for reasonable pay, and aren't looking to get filthy rich busting their asses for a FAANG.
Bandcamp is absolutely a company I would've considered working for. I'm long past the point in my career where I care about a lottery ticket. They were profitable, big enough to be sustainable, but small enough to be nimble. The management seemed to make all the right noises regarding their values and motivations.
I'll take that over a massive tech company or a tiny startup any day of the week.
I didn't think it needed clarification, but "they wouldn't be able to hire anyone" does not literally mean they would have zero candidates. It's expressing the fact that they would be severely limiting their talent pool by offering 0 equity in this industry, where equity is one of the reasons people are willing to take a risk on a startup.
> where equity is one of the reasons people are willing to take a risk on a startup.
They're not a startup. They're a profitable, mature, 15 year old company of 100-150 people. Working there isn't "taking a risk", so there's no need to entice people with hazard pay.
And yet those early employees who joined before they were profitable took a risk, and likely below-market rates, and got equity. Because that’s one proven strategy a startup can use to try to find people who can get them to not-a-startup.
I never thought I’d see the day where hacker news, of all places, forgot how this works.
> And yet those early employees who joined before they were profitable took a risk, and likely below-market rates, and got equity. Because that’s one proven strategy a startup can use to try to find people who can get them to not-a-startup.
I was interpreting the original comment that kicked this off ("Would they have ever managed to hire anyone if they didn't?") as referring to their hiring practices now, not 15 years ago when they were first starting up. Granted I may have misinterpreted the nature of their remark.
Obviously back then, yeah, folks would probably have been given an equity stake.
So we're arguing different points.
What I personally don't know is if they were continuing to give out options to new hires to this day. Based on my own experience in a startup-now-going-concern, my bet is "no", given that it would no longer be strictly necessary to entice folks to join the company, but I could be wrong.
I definitely interpreted it the other way, owing to the "would they have ever" part. The original subthread is about their motivation for an exit. The existence of early key employees that got (potentially a lot of) equity is quite relevant to that topic, and the sentiment that it would have been harder to hire people in this industry without offering equity at a startup is not wrong.
Your critique appears to assume that every tech company or startup begins by offering below market rates. That's not universal, and who knows, maybe they had a seed round and were able to pay people appropriately. They were also founded in 2008, it was a different time in the market anyway.
Looking at Crunchbase's list of articles, the earliest news story from May '08 mentions that it was a four-man startup that was completely virtual. Don't know how that lasted, but not having an office certainly frees up the budget to pay people.
My critique assumes no such thing, it just claims it's likely. That's why I used the word "likely."
I certainly hope it's not controversial to suggest that VC-backed startups, especially thrifty ones like bandcamp allegedly is, very commonly offer lower salaries to extend runway and make up for it in the form of equity options. My last startup offer actually gave me a window of salary ranges and let me choose my salary based on how much equity I wanted. The more salary, the less equity.
Who's to say they didn't? As mentioned elsewhere (https://news.ycombinator.com/item?id=30532741), they were always focused on slow and steady growth and seemed to be more lifestyle business than wannabe unicorn. Not the shop to join if you wanted lottery ticket options. Maybe they didn't.
Because in our current corporate environment where there is essentially no anti-trust enforcement, any small or medium-sized company is vulnerable to being destroyed by one of the giants.
