A
friend of mine recently left a mobile-social startup called Tango. This
person didn't tell me much, but said a few things like the CEO is a
dictator and was recently making the engineers work 2 out of 4 Saturdays
each month (arbitrary and no exceptions, even if they were on top of
their projects). I know one bad case is not an indictment of the
industry, but it might be too representative for comfort.
And
Tango is supposedly a promising firm with 200MM user registrations and a
huge recent round of funding ($280MM from Alibaba and Warner
affiliates), which suggest a
valuation
likely above $1B. As usual, I'm pretty sure Tango's actual value to
society is not that high. And let's remember that a major exit is pretty
rare; WhatsApp/Google/FB are outliers. I think over
90%
of tech startups become "zombies" - meaning they are dead firms to
investors, and their shares will never be exchanged for real money. To
be fair, this is about the failure rate for SMBs in other industries.
But the big difference is that VCs and F500 firms are not plunking down
millions on Joe's Garage or Betty's Bakery.
Here are some
highlights from the Glassdoor employee reviews. I know review sites are
biased towards really happy/upset folks, but the story is an interesting
reflection on the crap of startup life that may not be captured in
"Silicon Valley". There are 51 reviews posted for a 5-year-old company
with a current headcount of
160.
- Lots of turnover, and the people who stay are only doing so for visas (if they can trust Tango's cut rate lawyers to file properly).
- CEO and CTO own half the company shares. They had offers to sell, but are holding out because they believe the company's potential is 10X if they can show more growth (or is their best growth behind them?).
- Engineers are unclear on what their options are worth and what %ownership they constitute. Pay is below market with the promise of equity cashout some day.
- Mgmt.
changes its mind a lot on product strategy and vision (creating a lot
of wasted work and firedrills), and the CEO just over-rules everyone and
switches course on a whim anyway.
- The company supposedly has "great benefits"
like unlimited PTO and free dinner, but dinner is served at 7 and
people are scared to ask for time off because of the workaholic culture.
- Probably
under pressure from investors or his own impatient ambition, the CEO
recently mandated 9.5 hour days and weekend work. He just wants to see
butts in seats, and cares more about "doing time" than productivity.
- Enough people complained about this policy so that the head of HR spent money to create an employer profile on Glassdoor to respond to the reviews.
- This HR person claimed that the work hours policy was rescinded
(and likely illegal for exempt staff). "There are many ways to make
sure we hit our release dates and this was not the right one."
- "We are sorry you would not recommend Tango to a friend. Although we have some room for improvement, I do believe we are starting to make changes."
- One reviewer said that Tango went through 6 heads of HR in 2 years.
Tango responded that it was actually 4. Why even bother to issue that
correction? To me it just makes them look worse. You can imagine why the
HR folks leave - it's a crappy culture with unhappy people that they
are expected to magically fix, even though the C-levels probably don't
recognize the problem and don't respect/empower them to change things.
- There
are some glowing 5-star reviews. But they are written with perfect
English and too many business buzzwords. In other words, they look
phony. Other Tango reviewers have said the same - they think the positive reviews were planted
by the company to make them look like a more attractive employer. I
know this happens with Yelp and other sites, but that just crosses a
line to me. Plenty of companies have lousy work conditions, but they
don't lie to the outside world about it. It's almost a badge of honor
for employees that Apple or Goldman are tough places to work (only the
strong survive). They bask in it and don't try to mislead. In fact it's a
disservice - they should hire people who like that environment. There's
no point to try to bait and switch; the new hire will just get
disappointed and want to leave. And we know staff turnover is a huge
cost to firms, especially fast-moving and lean startups.
- But this seems to reflect the desperation
of Tango HR. They have very demanding/unreasonable work expectations
and demoralizing leadership, yet they don't comp well and need to find
talent to replace all those who left. Lovely. All that so the founders
and investors can get a phat return, while the entry-level engineers are
no closer to early retirement. At best they might be able to afford a
Bay Area mortgage with their post-tax shares (all that is assuming a
healthy exit of course).
I wish investors would show more
ethical rigor and refuse to invest in companies like Tango that engage
in terrible workplace and HR behaviors (
Zynga
also comes to mind). Some pension funds have divested from companies
that heavily contribute to global warming/warfare, or have
discriminatory practices/leaders. I wish VCs would do the same, but the
problem is they are too damn greedy. Plus, if they don't invest, their
rivals will. It's a "frothy" environment now where there is so much
money that firms want to invest in the next WhatsApp, but not enough
worthy startups (despite their abundance). So investors have to relax
their standards and fight to get face time with the top prospects. Yep,
it's another bubble.
Another problem is that overwork is the "new normal" in the Valley and
some other high pressure industries. Heck, investors may want to target
firms where the founders are able to push their people more than the
competition. Yes, I realize that there is no free lunch and a startup
has to bootstrap and hustle to succeed. But clearly some leaders go
overboard and run their firms too hot. When all is said and done, it's
people that make the startup go. You can glorify the code and the
disruption strategy and the innovation all you want (you can even
lionize the founders), but all that probably won't overcome an
abused/demoralized/burnt out workforce.
--------
I understand the republicans plan on overturning the 14th amendment, right after they impeach obama.
Seems
to me this is the norm. I work for a state institution and it has the
same atmosphere. Exempt employees are told to lie on their timecards
because they are not approved pay for overtime. The department is
constantly run on fear and panic. There's only so long that you can
keep up the pace before you break down. Then, they toss you to the curb.
This unemployment rate isn't real. It's
much higher than they say and everyone deep down knows it. As one
director said to his department during a meeting, 'There's plenty of
good talent on the street'. The fear is instilled in you by your threat
of losing your job. Hell, if you're here on a visa, it's potentially a
much bigger loss.
Steve Jobs, Bill Gates, they are personally
responsible for this social remodeling in which we are to identify
ourselves with our 'company'. We are to live to make the company
better. We base all of our self worth on how the company does and will
do anything asked of us b/c the CEO is god. We depend on them to get to
work they feed us, we re-create with our coworkers, in some cases, they
have apartments on sight. You are isolated from everyone in your real
life and only focus on work. Wonder why there's no talk of religious
cults anymore? Because the model has been implemented by the
corporations!
I used to work for a company that mandated you
attend a 3 day, alcohol soaked, retreat. At that retreat, I know of 3
extramarital affairs. One man left his wife (that I know of). As far
as I can tell, this was encouraged-one more way in which the company
isolates its workers.
We are abused,
demoralized and this model will not change until we all stand up
together, as one force. How many times did you stand by and watch a
coworker get fired and not do anything to defend him/her? Who will
stand up when the black hand of HR comes for you?
--------
Sorry to hear that your org is dealing with unpaid OT too. Yeah I
think something needs to be done about the working hours expectations
for exempt employees. I guess it's "OK" if companies want workers to put
in 60 hours/week and be on-call after hours, but they need to
explicitly state that in the terms of employment up front (at my current
job, there was a question on the application like "Are you able to work
extra hours?" but that was pretty vague/unfair - and I don't know what
would have happened if I replied "no"). Then the candidate can decide
whether the comp and other factors are worth it for the hours. Other
people just like working and would log those hours regardless, but there
shouldn't be bait-and-switch or surprises.
Maybe the 40 hour
expectation for exempt workers is 20th Century, though I know some
managers and HR orgs do want workers to limit their hours and at least
try to honor the 40 benchmark. Some might say "don't focus on the hours
and think about getting your tasks done." There is some truth to that,
but time is the universal currency and it should be respected. On the
flipside, if very efficient people can finish their workloads in 30
hours/week, then that should be respected too (but of course companies
will just give that worker extra projects to fill the space). Maybe that
worker needs to be promoted or transferred to another role where the
responsibilities will require them to spend ~40/week, but I don't think
most companies have the time or inclination to manage worker time so
conscientiously. Everyone is too focused on goals and results, and
promotions are unfortunately driven by politics and "commitment" rather
than efficiency/balance. Though some recognize that workaholics are not
the best candidates for promotion.
You bring up an
interesting point how the corporate life has replaced/supplanted a lot
of "traditional American life." Religious participation is on the
decline in many parts of the US, possibly replaced by company/CEO
worship (as well as brand worship, media worship, etc.). Companies are
pretty open about the fact that their goal is to "indoctrinate" new
workers in the "culture" - using typical religious techniques like an
origin story, a noble mission, exceptionalism, tribalism, etc. I don't
know how US recreation and family time today compares to last gen, but
clearly Americans are having fewer kids, and having them later. Part of
that is macro, but part of it is probably work-related (and by
extension, university-related since you need more years of schooling to
get a good job now). More of the US workforce is corporate than ever
before (it's harder and harder to make it as a SMB, including tech
SMBs). Also, financial services have reached an all-time high in terms
of % of GDP, and that is probably driven by more investment
participation from institutions as well as company 401ks (and all that
is driven by the performance of publicly-traded firms of course).
So
it seems all this is suggesting "the company" is becoming the center of
American life. It would be a hard sell to argue that this is a good
trend for our country, unless you consider the perspective of the 1%.
