Theory: It’s all about signalling commitment to investors.
A startup doesn’t produce anything until it goes gold on it’s product or gets bought out by a tech giant who then takes their product to completion. So it has no cash flow at all until hopefully at the end a dump truck full of money pulls up and buries everyone in wealth. Up until that day, what pays salaries—what keeps your company employees from starving to death in the street—is investors who believe in your idea and your product.
And while working a forty hour week for the duration (and telling your workers to bloody well lay off the coding at home) would probably get you more, better and less buggy lines of code added to your product per week, that doesn’t really help you if it looks to the people funding you like you are treating their investment as a nine to five.
“Sophisticated investors should know better”? Eh. The only skill that actually matters to the long term success of a startup investor is the ability to pick startups with good product ideas. The kind of investor who is an expert on productivity and employee management is most likely picking investments based on those factors in some other industry where that is what companies live or die by. Meaning, an industry which is mature.
This of course implies that the optimal strategy for a startup is to pick a good product idea and then just flat out lie through their teeth about how many hours of work they do per week. Does it sound very implausible that a lot of the silicon valley culture of overwork is fiction? And some of it is naive people trying to actually work as many hours as people more cynical about investor relations falsely claim to.
Theory: It’s all about signalling commitment to investors. A startup doesn’t produce anything until it goes gold on it’s product or gets bought out by a tech giant who then takes their product to completion. So it has no cash flow at all until hopefully at the end a dump truck full of money pulls up and buries everyone in wealth. Up until that day, what pays salaries—what keeps your company employees from starving to death in the street—is investors who believe in your idea and your product. And while working a forty hour week for the duration (and telling your workers to bloody well lay off the coding at home) would probably get you more, better and less buggy lines of code added to your product per week, that doesn’t really help you if it looks to the people funding you like you are treating their investment as a nine to five.
“Sophisticated investors should know better”? Eh. The only skill that actually matters to the long term success of a startup investor is the ability to pick startups with good product ideas. The kind of investor who is an expert on productivity and employee management is most likely picking investments based on those factors in some other industry where that is what companies live or die by. Meaning, an industry which is mature.
This of course implies that the optimal strategy for a startup is to pick a good product idea and then just flat out lie through their teeth about how many hours of work they do per week. Does it sound very implausible that a lot of the silicon valley culture of overwork is fiction? And some of it is naive people trying to actually work as many hours as people more cynical about investor relations falsely claim to.