I sold my startup. I put a lot of time, money and emotional energy into building my company. I’m not the first to go this route and much has been written about the “Founder’s Journey”; the emotional roller coaster of self-doubt mixed with brief moments of euphoria. I don’t want to write about that. I want to instead share my observations and learnings from my time working for a large US corporation. I had previously only worked for myself or at your typical part-time jobs like grocery stores and movie theatres as a teenager, so this experience was entirely new for me. I never before had to use Workday, or file expenses with SAP Concur, which I’m convinced is the worst, largely deployed software in the world. I was never part of an Org chart and never gave any consideration to people’s job titles and why they cared so much about it1.
Let me set the stage. When you sell your company, typically you get some of the money up front in cash and the rest as part of an “earn out”. Typically this period is four years and for every year you complete, you get another chunk of the original sales price. For example, you get 60% of the total sale price on the day the deal closes, 20% after year one, 10% after year two and then 5% after each subsequent year.
I knew I couldn’t last four years working for someone else so my lawyers were able to successfully knock it down to two years, like bargaining for a shorter prison sentence. How hard could two years be?
I won’t mention the name of my startup, nor will I name the company who acquired my company. Not because I’m bound by some NDA, but rather I think this information would only distract from the main content. So let’s call the company Acquirer. OK? OK.
These are my observations and learnings from a two year earn out.
My startup was a typical SaaS startup, which relied on recurring revenue via subscriptions. I made the decision early on to target larger enterprises as customers. So typical monthly contracts ranged from $5,000 a month to $100,000 per month. Landing a new whale of a customer, say greater than a $200,000 per year contract, was a game changer. I could hire one or two more people, or increase marketing spend. But I had to weigh those options because I could also choose to not do anything and just pocket that money. You’re always weighing these options; instant gratification or long-term growth. Conversely, when you lose a large customer, your plans have to change and you take a real hit to your finances and your future, not to mention your ego. So each and every day, you, and once you’ve grown large enough, your sales team, are on the prowl filling the sales pipeline, qualifying leads and trying to close deals.
But once I started working for Acquirer, things completely flipped. I no longer felt like a lion hunting in the savannah; now I was a lion lazily laying in the shade as my zookeeper tossed meat at my face every two weeks. And like most US tech companies, the salaries Acquirer paid were fantastic relative to the work expected.2 I was a very well fed zoo animal who quickly lost the ability and will to hunt for themselves. For those people who have always worked salaried jobs, you can’t imagine the feeling for someone like me to suddenly, for the first time in nearly 20 years, receive money like clockwork on the 15th and 30th of each month just for not getting fired. Like a kid on Christmas morning, I would excitedly check my bank account every pay day for the first few months and giggle seeing the money get deposited. I know it sounds silly, especially because the sale of my company already made me wealthy, but still, it felt surreal.
I intentionally went into my new job with a very open mindset. While my company had built and shipped software to large customers and governments in the past, I had never been part of a big team like I was now. So I adopted the default position that the way things were done in a smaller startup will not fly at a larger company. I told myself, “Check your ego, assume you don’t know anything, be open to doing things differently and learning from others”.
But you know what - I found the process to be largely the same because the toolchain is largely the same. Jira, Github, Docker or Kubernetes, Python, AWS etc. That said, I was a bit surprised at how lax some things were. The code reviews for example were clearly very cursory. It was obvious some folks were just handing out thumbs up on code reviews like they were going out of style. I saw code committed that I never would have allowed in my company, but I was in a product role now, not engineering, so I kept my mouth shut.
The only real difference was in the work before the coding started. Way more opinions needed to be consulted on initially. Meetings had to be setup to discuss new upcoming features. You had to solicit opinions from all sorts of people throughout the Org chart. And I found certain folks being contrarian for contrarian’s sake, in my opinion. I remember this one feature I was advocating for replaced a very tedious manual process with an automated AI process by way of a single API call to OpenAI. The current manual process was so tedious we found that customers chose to never even use the feature. I argued “Look if we automate it with AI and present the results to the user, they can still verify and accept or reject. We can raise our usage of this feature to essentially 100% with one single API call”. To me, a no-brainer and I couldn’t believe I had to have a meeting to convince people to do this. It was the lowest of low-hanging fruit. But one engineering manager raised an objection and said, “Maybe they aren’t using the feature in its current form because they have to click a button to open a modal. Maybe if we redesign the UI it will improve usage.” I mean, sure, maybe it will but they’d still have to do a bunch of typing as opposed to having OpenAI do the work behind the scenes and requiring no button clicks at all.
The meeting ended with agreement to build the new feature using AI and it went on to become the best reviewed feature we built during my tenure there. We calculated we were saving users 1000s of hours per month. I still to this day don’t know if that manager was just playing Devil’s Advocate or they really did question the benefit of using AI. And if they were just being a Devils’s Advocate, why? Why add unnecessary overhead to the discussion? This kind of stuff drove me nuts.
One of the most impactful lessons I learned during my time at Acquirer and something that has stayed with me since is how powerful the act of writing is. Writing down your thoughts, your suggestions or even your criticisms makes you think much more clearly. When I saw the words before me, I found it easier to find holes in my own logic, or to see room for improvement on my own ideas. It made it easier for asynchronous collaboration via Google Docs where your colleagues could leave comments and you could iterate on a document at your leisure. An engineer who came from Amazon told me Amazon had a very strong culture of writing there, too, and I can see why.
When I was running my company I would write the minimum necessary to get an employee off and running on a given task because my logic at the time was “I don’t have all the answers yet so let’s start with something small and see where it goes”, but I can now see this was wrong. Taking a little bit more time up front to think through a new feature, change in strategy, update to an ad campaign etc. is well worth it. Even if you do ultimately change course down the road, some more upfront thought would reduce the time it takes to realize the err in your ways.
Now the flip side of writing is reading. When I was writing out new feature ideas, everyone would read those documents. This sort of content is easy to understand, interesting to read and relevant to everyone’s role. And who doesn’t like chiming in about how some shiny new AI feature should work.
But one day my manager asked me to write a document outlining a process of product development when the feature in question crosses multiple team boundaries. That is, if another part of the organization wanted to collaborate with us on a new feature, how does that process look? The task just struck me as work for work’s sake. Perhaps my ego got in the way and I found this sort of work beneath me, I don’t know. But because I was so skeptical of its value, I dragged my feet on it, like a kid who just doesn’t want to do his homework so they find any reason to procrastinate.
My manager kept following up with me on it, so finally I relented and wrote a document in the company wiki. I hand waved my way through it, peppered in as much corporate speak as I could stomach ("‘stakeholder alignment”), fudged some sort of guidelines and workflow and marked it as published.
The company wiki keeps stats showing how many people have visited a page. Guess how many people other than my manager and I read this document? Zero. Literally zero. I posted a link to it in a relevant Slack channel, got the requisite thumbs up emojis and empty platitudes (“Nice!”) and then bupkis. Nobody read my boring document. I kept checking the stats on this page for a few months after, but it became clear nobody was reading it, but also, why would they? When we did do cross-team work, we had someone write a document outlining the feature, get some feedback, settled on a path forward, had a kick-off meeting and away we went. The process was self-evident. To add to this, the content on the company wiki was nearly impossible to discover and the search functionality was horrendous.
It was the first of many instances where I was part of a process that, in theory, well-run businesses should do, and everybody nods along saying “yes, yes, we should do this” but in reality nobody really follows or adheres to it.
Like many US software companies, Acquirer offers its US employees “unlimited” paid time off. I had always wondered how in practice this works. Obviously an employee can’t ask for a year off with full pay, their manager would reject this request. What it does amount to is there is no fuss made over someone needing a day off here for a doctor’s appointment, or a half day there to tend to a sick child. By having this policy, it seemed like the stigma of needing the odd day off was removed and nobody judged anyone. However, the curious thing I found was that the US based employees ended up taking less time off than their international counterparts who had well-defined time off. (Acquirer’s internal wiki had a list of public holidays by country and one of the Asian countries had so many days off the joke was it would be easier to list which days weren’t public holidays). As part of my employment agreement, I was given 30 paid days off, so roughly 6 weeks as the country I live in does not allow so-called “unlimited” time off. I spread the days out into 3 vacations as I have kids in school so I’m limited by how much time I could take off consecutively as a logistical manner.
Not one of the US employees in my area ever took even close to 6 weeks off in one calendar year. My guess is that 4 weeks was the max any US employee took off in a calendar year. Maybe they didn’t want to? Maybe they liked working and the idea of not working stressed them out? Maybe their family dynamic prevented them from taking that much time off? I don’t know exactly why, but boy did I love having that much paid time off where I was truly off the clock. The vacations I took while employed by Acquirer were the first I had taken in more than 15 years where I didn’t bring a laptop and never checked email once. It was glorious.
The quirk of this concept of unlimited time off is that employees can’t accrue vacation time so in the event of a dismissal, there is nothing owed to them by the employer. No wonder they’ve become popular in the US.
The world can be a nasty place and being surrounded by nice people who say nice things would definitely be better than the alternative, but there’s a limit. Acquirer had a culture of I what I can only describe as toxic positivity- people being so kind and complimentary of one another that it comes across as borderline inauthentic.
A very senior engineer once wrote a message in Slack saying “We need to stop focusing so much on what we build but think more about how we build and work together”. Not exactly those words, but something close to that. OK, on its face doesn’t sound insane, but if this was at my company, my immediate response would have been to say “What did you have in mind? Can you put together a plan or an outline of what isn’t working now and how it can be improved?” I would have immediately tried to bridge the abstract to the concrete. But at Acquirer, the concrete was often secondary; it was the thought that counts.
So this engineer’s Slack post received many emojis, hand clapping gifs, and “Yes!” comments. And then nothing. No follow-up, no call for a meeting to discuss, nothing. He never brought it up again and neither did anyone else. So why did he write that?? And why were others so quick to laud his message and also do nothing?
Time and time again I would see situations like this play out where a thought was put out into the ether, people would use every superlative under the sun to celebrate the thought, and then nothing came of it.
Due to my naïveté and my bubble of working for myself, I never understood why people cared so much about titles. But at Acquirer, I finally got it because titles equates to two things:
Higher up the org chart means your opinion carries more weight
Pay bands!
I didn’t know about pay bands (e.g if you are a Senior Director you get paid 240k - 265k and cannot make more than that until your title changes). Acquirer was very strict about these pay bands and would not deviate from them. So with that knowledge in tow, now of course I get why someone wants to be Assistant Regional Manager and not just Assistant to the Regional Manager.
The org chart hierarchy was another new one for me. I ran my company with a very flat structure and solicited feedback and opinions from everyone. New ideas, features or changes came from all parts of the company, I didn’t care, as long as there was merit, I considered it. But at Acquirer, it was very obvious, although never explicitly stated, that certain people’s words carried more weight than others.
In particular, Acquirer had a collection of long serving engineers who essentially held a veto over any idea. If one of the old greybeards didn’t like the idea, 0 chance it was happening unless someone higher than them on the Org chart, typically VP level or higher, asked for it. These folks definitely had the experience and wisdom necessary to make informed decisions, but they also were institutionalized and were prone to NIH (Not Invented Here) syndrome. I found they were very hostile to new ideas and accepting new technologies, like LLMs.
About 9 months into my tenure, I was beginning work on a new project and asked my manager if I could run it the way I did at my company; small team, quick iterations, quick feedback loop, minimal exposure to the rest of the organization until it was ready to show others. He said he was fine with this approach and away we went.
About two weeks into the work, an engineering manager who was not on my team but who had a director report working on this project asked me why he had no visibility into this project. This annoyed me to no end. I explained to him that my manager said it was OK for me to keep things quiet and hidden until we’re ready to show things in order to reduce the amount of meddling. He replied that without seeing what’s happening in the project, how was he supposed to assess the contributions of a particular engineer on the project and then I had perhaps my largest epiphany at the company.
It’s tempting to get mad at other people and be frustrated with their actions, but once you understand their incentives, the reasoning behind their actions becomes much clearer.
Every 6 months or so, the engineering managers got together and performed a calibration to assess the performance of their direct reports. The engineers who do well in these calibrations received raises and promotions. How could a manager vouch for his or her engineers unless they actually saw the work they were doing. And this was my blind spot; I didn’t understand this process and was used to an incentive structure where employees do better when the company does better, such as the case in my company.
Once I understood this, it became clear that my wish to hide my team away from prying eyes was a detriment to the very people I thought I was protecting. Perhaps this is a flaw in how teams were setup or how these calibrations were performed, I’m not sure. But it gave me pause as to how quick I was to judge people. For the rest of my time at Acquirer, I tried to take a breath before jumping to conclusions and asked myself, “Why are they asking these questions? Why do they need this information?”
A Director of Engineering was really keen on creating “artifacts” to share internally that summarized the work our product area was doing. A variety of one pagers, wiki pages, regular updates etc. Like clockwork, the hair on my neck stood up because I knew nobody reads this stuff, but then I realized that Directors are assessed by how well they keep higher ups informed of what’s going on in the company. So if their evaluations and subsequent pay is predicated on the creation and distribution of these artifacts, how could I fault them for asking me to write this stuff?
It all comes back to incentives. It’s a real challenge in larger organizations to ensure that everyone’s incentives align. When you have fewer than 30 people, it’s much easier but once you hit 1000+ it’s inevitable that some incentives will be orthogonal to one another. This experience gave me a much greater appreciation for companies who can pull this off.
Throughout my time at Acquirer, I ran into the same types of people over and over again that I gave them each a special label:
Meeting Queen
The Meeting Queen stuffed her calendar with one-on-ones. Since everyone’s calendar was public, you could see that she had ~20 hours of one-on-ones scheduled each week. Recurring meetings, too. I ran into a few of these queens. Personally, adored each and every one of them and really enjoyed getting to know them. But professionally, never really understood what these folks did or what they added. I’m reminded of that scene from Office Space where the two Bob’s are interviewing Tom Smykowski and they ask what exactly does he do there and he yells, “I have people skills. I’m good at dealing with people!”
Technocrat
Typically at the VP level, the Technocrat is all about more and more documentation, meetings that discuss processes and other high-brow tasks but seldom interested in getting actual things done. Talking about work amounted to actual work for the Technocrat. I found these people were the most likely to use vague, corporate speak during presentations that results in people nodding along but if probed deeper, doesn’t really mean anything. I only have a sample size of one so nothing to compare to, but I wonder if you could use the ratio of Technocrats to actual engineers as a signal for how well a company performs.
The Torchered Artist
How can it be that nearly every designer I met at Acquirer was on the brink of collapse? Overworked, under appreciated, frustrated that their ideas always got neutered into something bland and conservative. Time and time again I heard the same stories from designers.
I loved the designers at Acquirer; they were so creative and curious, often seeing where things were heading before the Technocrats could. But at times it felt like they were a little too early with their vision of how products should look and feel and touch. They struggled to convince others to come around to seeing their worldview of software and constantly being told “no” or “not yet” really wore them down.
Gatekeepers
The long tenured principal engineers who hold the metaphoric keys to the kingdom. They’ve been at Acquirer since the early days and have the respect of the C-suite. They are very accomplished engineers, very strong technically and subsequently their opinion counts for a lot. But I found them resistant to change, quick to dismiss anything that strays from the already trodden path and could have their heads in the sand a bit too much. I think this sort of mindset comes from being in the same place for too long. The advent of AI and LLMs really tested this group. They were very resistant to my ideas in leveraging these technologies. I tried to speak their language and built my own proof of concepts using real data, and wrote up papers with solid evidence that advocated for using LLMs more and more and they were just not budging.
Mr. Popular
There were a handful of managers at various levels who just couldn’t say “no” to anyone or any idea. Everything was considered and discussed, lest someone’s feeling be hurt. I think not being opinionated on product direction or engineering decisions is worse than being wrong with your decision. Mr. Populars were very well liked by all who reported to them, but their lack of vision and conviction hurt Acquirer both in the short run and long run.
There was a brief period during my first year at Acquirer that I considered staying beyond my earn out period. I finally figured out how the organization was structured allowing me to know who to reach out to when I needed clarity on something,
I had made friends and genuinely looked forward to each new day, even slinking into my old entrepreneur habits of becoming obsessed with the job; thinking about solutions to problems while walking my dogs or taking a shower.
But that moment was fleeting. Acquirer had begun to change its hiring habits and instead of hiring more engineers, it chose to hire more managers. And with each new manager hire, more and more work-for-the-sake-of-work crept in and soon I was counting down the days until my departure.
I promised myself that I would give it my all for the two years and not “rest and vest” so to speak. I didn’t want to become jaded and cynical. But after nearly two years of corporate culture, I realized apathy had set in. There were two key moments where I realized I just didn’t care anymore and I would leave right when my earn out ended.
The first moment was when I was giving a presentation on a new approach to performing a key function of the software. I’m being intentionally vague here, but suffice to say AI had completely upended the old way of doing things and my approach relied heavily on LLMs. I built a prototype, used real-world data, came with statistics backing up the new approach as being superior to status quo and thought I did a convincing job of presenting why we had to change things up. I referred to something that Reed Hastings said about Netflix; Netflix had to become HBO before HBO could become Netflix. I said to the effect of “We have to become a native AI company before a native AI company becomes us”. Meaning, AI and LLMs lowered the moat of competition and we had to embrace this new technology because if we didn’t, somebody else will. As I was presenting, I kept my eyes on a few key people, the old guard. Everyone was paying attention, nodding along but I wasn’t sure if I was getting through. My last slide of the presentation was going to be my closer; an appeal to emotions and at the same time, calling out some of the old guard. My last slide was a quote from one of my favourite movies, Ratatouille. The slide had a picture of Remy from Ratatouille and I was going to show this quote from Anton Ego, the food critic:
“In many ways, the work of a critic is easy. We risk very little, yet enjoy a position over those who offer up their work and their selves to our judgment. We thrive on negative criticism, which is fun to write and to read. But the bitter truth we critics must face is that, in the grand scheme of things, the average piece of junk is probably more meaningful than our criticism designating it so. But there are times when a critic truly risks something, and that is in the discovery and defense of the new. The world is often unkind to new talent, new creations. The new needs friends.”
In my head at least, this was going to play out as a mic drop moment. But as I approached this slide, I stopped, asked if anybody had any questions, fielded them, and then ended the presentation. I didn’t do the mic drop. I’ve reflected since on why I didn’t and I think I realized that a) it wouldn’t change things and b) why ruffle feathers and be a dick. Everyone is just trying to hit their own targets for their own promotions and job titles. Everyone has their own incentives, their own worldview, their own philosophies. Who am I to go around throwing stones? And so that last slide sat there, unwatched.
The second example of my apathy manifesting itself occurred during a leadership exercise where some of the senior product leaders gathered to discuss upcoming challenges that Acquirer faced.
The exercise involved writing something on a sticky note and placing it one of two sides of a white board: Challenges and Strengths, or something like that. I wrote down two things:
Founder mode vs manager mode
No more liquidation event
Acquirer’s founders had left the company and the new C-suite were taking over. I liked them all well enough, but the reality is history is not kind to software companies whose founders leave. There is a certain aura that founders have that once they leave, it’s hard to recreate. I wanted to point this out. I had also just read Paul Graham’s essay on this matter so it was fresh in my mind.
Acquirer went public a few years back and the stock currently was going down - and fast. So there was no big pay day awaiting employees. I knew anecdotally from my colleagues that they were upset with their compensation, whether it was being passed up for promotion or not getting the raise they felt they deserved. I wanted to point out the challenges Acquirer faced in ensuring their very talented people felt appreciated and well compensated because they could pack up and go work anywhere else.
So I had these two points in mind, along with a positive about how strong I felt the designers were. Everybody went up, one by one, put up their sticky, explained it, and sat down. There was about 20 of us in the room so it wasn’t hard to know who did and didn’t go. I was the last one to not go up. There was a call for anyone else and I could feel people’s eyes on me and I, for whatever reason, just sat still. And we moved on.
Sitting here today, I kinda regret not going up. I feel I chickened out and didn’t want to be the bad guy. Even when I knew I was leaving the company, I still didn’t speak my mind. Call it apathy, call it cowardice, call it conflict avoidance.
With both of these moments in the back of my mind, I knew my time was over at Acquirer.
Looking back, my time at Acquirer was great. I confirmed what I like (working for myself) and what I didn’t like (rules). I made great friends who I still maintain contact with today. I learned to not judge people so quickly and to consider incentives before questioning people’s motives.
But perhaps above all, I learned that company culture really does matter. You hear that word, culture, bandied about, getting lip service paid to. But Acquirer really took it to heart. They created an environment where people loved their jobs. Sure, people complained about this and that, but you know what, I never doubted anyone’s sincerity. Every single person at Acquirer truly cared about making the company better. They maybe disagreed how best to do it, but they all loved their work, believed in the mission and did their best each and every day. I have a sample size of one, but I want to think this is quite rare. The number of people who have worked at Acquirer for over 10 years tells me something.
I would whole heartedly recommend Acquirer as an employer if anybody asked me. They just weren’t for me - and that’s OK.