Oiling Up The Machine

As an introductory post, I want to talk about my experience as a co-founder of a silicon valley start-up. This was an experience that showed me the capitalist methods. I didn't just partake in capitalism, I was an active player in it. I was trying to benefit from it.

As I've reflected on it, it's made me think about what it means to be an organizer with a history of capitalist activities. It has helped me understand and re-prioritize my life in interesting ways. It's made me wonder if I'm a bad person and what it means to make mistakes and change. It has made me think about what it means to be a hypocrite and things like that.

I will be sharing a lot more about my time at a start-up and how that eco-system perpetuates capitalism.

Let's Do A Start Up!

In 2016 I decided to do a start-up with a co-worker and a friend they had met. The details aren't important but it was in Silicon Valley. I had just gotten out of a relationship and I was feeling very disconnected from work and where I was living. I decided that I would try to do a start-up because, well, what else do you do if you're in the Bay Area at the height of tech's popularity? I figured, I'll do the start-up thing, if it works out cool, if not I gave it a try but I'll move back home and I'll have great experience and I can settle down.

While still working my full-time job, we were working on applying to Y Combinator, one of the most elite start-up accelerators in the world. My decision tree was:

• If we get into Y Combinator:
  • I will quit my nice cushy job and do a start-up
  • Otherwise, I will just ride-out my job and move back to MN.

My co-founder was a really talented networker and really a person who would power through anything to make things happen. So, with enough polish on an idea/MVP, a bit of coding from my other co-founder and some operations management on my end, we were able to get into Y Combinator!

It was sort of a shock for me. Being a migrant, you naturally hear from parents to assimilate, to pursue safe options, to secure a job that pays good money. I was going to forgo my well paying tech job for an opportunity to make even more money! In the end my mom was really supportive of what I was trying to do. She's always been supportive of my adventures.

So I quit my job and joined my co-founders in starting up a company. I went from having breakfast, lunch and dinner cooked for me, to eating frozen foods from Costco. There really wasn't a lot of time to cook. There was a growing period for me, as I had to adjust to what it meant to really be in a start-up.

I was in the thick of it(capitalism) without really realizing it.

What Does It Mean To Be A Boss?

Being a start-up co-founder was a lot of responsibility, making decisions on how much to pay people, who to hire, conducting interviews and ensuring that there was cash flow to pay people. It felt nice to be a "job creator". Through our hard work, we were creating jobs and giving meaning to people's lives! It was a really crazy thing to conceptualize. This was how I was framing this period of my life.

This role gave me responsibility over a lot of people at the company but in particular it gave me responsibility over my team. I was responsible for their development as employees at our company. I took that role seriously and I worked really hard to ensure they were given a lot of feedback to develop. Even when things were difficult I tried to provide development for people.

I've always enjoyed the mentor/teacher role. I really do enjoy teaching and helping understand problems. It's one of the main reasons I wanted to start this newsletter. To share my experiences. I digress.

So, being a boss, a people manager, meant I had a ton of responsibility. Including making sure that there was always money for people to get paid.

During hard financial times, my co-founders and I thought it was appropriate to be the first ones to take a pay cut before we cut anyone elses pay. I felt like I was being a good boss, putting my employees first. There were more times than not that I was making closer to minimum wage throughout my time as a co-founder (my co-founders also made minimum wage).

But we all know the real way company founders make money. A founder's compensation is the exit (IPO or acquisition). When you own more of the company than anyone else, you make bank when the company exits.

Being a manager, a founder and owner, wasn't all about taking care of people though. Just like every company there are stakeholders. In capitalized/capitalistic endeavors, there are always stakeholders beyond you and your employees. Those stakeholders will always maximize their return. Being a founder/owner meant I had to care for my stakeholders capital as well.

How else were you going to raise additional money, unless you showed that you were a good steward of capital?

Doesn't Sound So Bad

That's because I haven't told you how I was a steward for capital owners.

Let's be clear here: A VC (venture capitalist) is the ultimate stakeholder. Their name describes exactly what they do: They go on capitalized adventures in the hopes of generating more capital. The goal of a VC, is to take some money, and generate more money out of (Marx called this the MCM model, Money to Commodity to Money). That's it. There is nothing magical or unique or original or event creative about venture capital. You put money somewhere, with the goal of creating more money from it.

So why am I saying all this? I think this is me wanting to take responsibility off of my shoulders. To put blame on others. To say: It was the VCs that forced my hand. That I was simply a log floating down the capital river on my way to a payout. But it isn't the case. I played an active role in trying to turn money into more money. Even when I took a pay cut, it was to keep our most productive employees employed. If they created value, it made my share of the company that much more valuable, it made VCs share of the company even more valuable.

It was through our employees, and their hard work, that we/I (founders) would become wealthy.

I had an understanding of the power dynamic present. Not a deep one, but I could feel that my employees would make the company sink or swim, and not me, yet I would be the one that would become wealthy if the company would be successful. I guess we all knew, but it's such a common relationship that maybe it doesn't really matter that that power dynamic exists. We are all just trying to make a bit more money.

So When Did You Realize Your Role In Capitalism?

We were walking a tightrope of in-coming money and trying to close the fundraising round. This would allow us to keep the doors open, grow the team, give people raises and maybe even do some fun stuff.

We started our fundraising just before the war in Ukraine broke out. We were really close to closing our round, but once the war kicked-off, all the VCs ran scared and all the money dried up. There was no money for fundraising. The term-sheet we had a verbal agreement for fell apart. We went from preparing to grow the team to having a realization that we will probably need to lay people off.

I was really angry at how scared VCs became during the war. Nothing had changed for them, they still had all the money. Why wouldn't you honor your verbal agreement and give us the money to keep the doors open. Cowards.

In the weeks and months or so after the war kicked-off we watched as our money was dwindling. We worked with one of our board of directors and investors from our previous round. We asked for help and guidance. We needed more money, but all the sage advice they had to give was: get lean, fire people. That's it. Cowards.

It's easy to be angry at VC's at this moment in time, but I was angry for the wrong reasons. I was angry because they were afraid to keep our company going and I was going to have to deliver the bad news to my team.

Eventually the time came that we had to let go of people. I had to sit in on a call and fire two really talented people, simply because we could not afford to keep them on staff. This is the lie I told myself. In reality we fired them because we wanted to keep the company alive in order to keep the chance alive that I could become rich.

And that was it. That's when it hit me. I'm the bad guy. I'm not firing these people because they're a bad fit or anything. We are firing them because we want to keep the company alive, and the only reason we want to keep the company alive is to give us runway to one day be rich. That was it. We could talk platitudes about keeping people employed, adding value, all that nonsense. It didn't matter, the motivations were crystal clear.

We can frame it as: Oh but that allowed you to keep other people employed. Why would some people stay employed and others not? You keep the employees that maximize your opportunity to make money. That's it. In the end it was just about money. We can discuss at another point if everything in life is just about making money (it's not).

Before doing a start-up, I had a hypothetical scenario for why companies behaved the way they did. But now? That was me. I was the one making the decisions. That was me treating my employees as commodities. The people that I felt that I cared about. It was insidious in how it happened.

You're Just Mad You Didn't Get Rich!

I would be lying if I said I wasn't upset, at the time, when I knew our start-up was failing. I'm a human who's been brought up in a capitalist society, and that society has ideas about how we measure ourselves and our progress in life. I was failing as a capitalist.

I spent more than six years of my life in the start-up, trying to get rich. Six years around a time that I could have spent doing something completely different. Six years honing a skill I would ultimately realize is perpetuating the system which is the basis of all our problems. It's like training for a tennis match, when the only way to win a match is to shoot the ball with your hands. No matter how good I got at tennis, it didn't prepare me for the real work that's necessary. To organize.

So, What Comes Next?

Over time, and with self-reflection and analysis, I've come to be thankful for the experience I have had, mainly because I have a concrete, lived experience of being a capitalist. Making decisions like a capitalist.

I wanted to write this because I, like everyone else, am not perfect and have participated in capitalism. It doesn't make us bad people, because we have to exist in it. We have to pay rent, or a mortgage, we have to buy food and clothes and go to work, children to raise, retire, have accidents. We have to go to a hospital to see if something is wrong, and its all funneled through a capitalist society. Ultimately, all we want to do is live our lives.

There is nothing wrong with having participated in capitalism, because there is no other system or society. However, we must become self-aware and ready to dismantle it. We must tear it down. In order to tear it down, we must see the reasons why it must be torn down. So that you see for yourself why we can't sit idly by, and let capitalism take us to the path we are headed down.

This capitalist system creates a fog around everything we do. There are a lot of good people who are just trying to make it in the world. I hope reading my newsletter will give you the tools and insight to help come to the same conclusion I have in your own way.