My answer to that question is that organizing people is much more difficult than everybody thinks and politics is the biggest source of inefficiencies on any human organisation bigger than a few persons. And cooperatives introduce additional political layer.
Maybe in a decade when the market and my debt recovers? But I'm planing to work for myself anyway. I have no issues with a co-op if I ever make enough to bring someone else on.
Seriously though, most people cannot afford to just quit. You at least need savings for that, and you need to be fine with burning through them and still failing, cause that's a very real possibility.
Equity is great when your base salary covers your comfortable life.
Equity is not great when your salary or hourly doesn't afford you much, and having inaccessible capital that very well may be worthless in the future is not desirable.
When people talk about this topic they hyper focus on success cases. But HN should be intimately familiar with how well start-up equity offers usually pan out.
And large stable companies usually do offer equity to employees, but that slow stable growth equity is not going to make you rich.
Employment is already a pretty bullish position on the employer. Adding equity is doubling down. If the company goes under, you lose your future wages and the investment in the equity.
Early on when we were just starting out (context as a founder), I used to think that the only types of people who would take on this kind of risk were young 20-something’s who had time and space and no significant other. Then we hired 2 early engineers in succession who were older.
One was just made for startups. He could never work for a large company, and he was ok with the risk and lower pay because it was still quite high relative to his cost of living in Europe.
The other already had kids who were older and independent. He always wanted to take a swing at a “Silicon Valley” startup, and he just cared deeply about that experience and could do so without having to worry about his kids financially relying on him.
They were 2 of the best engineers we had ever hired and stuck with us through thick and thin from a team of < 5 engineers through us scaling to 80+. When we got bigger, one left because we were once again too big for him (process, minor politics popping up, spending more and more time teaching newcomers how to own and operate a bigger codebase safely, etc.). The other left because of similar reasons but at a later scale.
I started the journey starry-eyed/overly-optimistic in both directions. Hiring people early on who obviously did not have the risk tolerance or an understanding of how much work was needed early. Holding on to people for too long who weren’t enjoying the new environment. Now I’m much more even about this - there is a right place and time based on what the individual wants, and being open and honest and kind about it is always the best path. Equity is simply a lever to compensate risk, but the appetite to take on the right amount of risk is the most important thing given the company’s scale.
Easily: there are far more non-employee owned companies than employee owned. Thus this isn’t a preference at all, it’s merely the availability of the market.
Now you could say that entrepreneurs who start companies have a preference for non-employee owned, thus explaining the aforementioned market allotment. Again that’s pretty easy to explain, because of course such an entrepreneur would give up ownership in an employee-owned arrangement. It’s also just the de facto paradigm most are aware of in news cycles and business schools, and is easier to setup and support.
Really? Or are there simply far more non-coop job openings available? Is there data on the applications per listing that directly compares ownership structures to normalize for workforce size?
