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Friday, April 30, 2010

Loyalty is a two way street

I was recently getting together with a friend/former colleague from a previous startup. We were discussing engineers who had spent a long time at the startup (which never went anywhere). It brought back to me Mark Suster's article about job-hoppers. It reminded me that loyalty has to be a two way street. Yet companies and employers lay-off long-time employees all the time as business decisions.

You can't have it both ways. You can't claim that the company is a family and that you owe it to a company to be loyal when someone else comes by with a 30% raise, and then turn around and layoff employees when business gets rough. If a family member did that to you, you'd feel incredibly betrayed, and the typical rank-and-file worker has been continually betrayed in this fashion for the last 30 years or so. An investor or venture capitalist can invest in 20 startups at once, and if 19 of them fail and the 20th turns out to be the next Google, the investors still win. An employee/entrepreneur can work in only one startup at a time. If after 3-4 years, there's no exit in sight, and you're not being granted new options, a hefty title, or some other compensation, then I would start looking for a new job! Note that many startups don't have an active retention program in the form of refresh options for employees (even high performers), and I think that's a major mistake. Obviously, a startup founder can't just leave, since if he leaves that's a signal of major disaster.

In retrospect, the time when every one of us employees should have exited was when we saw the Chief Architect leave. He had all the incentives to make the startup successful, but if he was leaving, then what reason did the rest of us had to stay? Incidentally, he eventually ended up at Google, where he got handsomely rewarded, so his departure was well-timed. I discuss other reasons to leave in An Engineer's Guide to Silicon Valley Startups. By the way, the print copy is current sold out, but digital editions are still available, and I expect the second printing to be available next week.


louisgray said...

Understood 100%. It can be a hard tradeoff between loyalty and naivete. I spent 8 1/2 years at a place that was stable, but never made it to its lofty goals. In the time I spent there, had I moved to somewhere more successful, things might be very different.

On the flip side, in the time where I spent nearly a decade in my one desk, I saw many friends have to job hop just to survive - so it could have been much worse.

Abhay Vardhan said...

Definitely agree with you here.