Monthly Archives: June 2019

The unintended consequences of rising stock prices – decreased risk taking among employees

Rapid raise in stock prices result in some people in the company being overpaid.  This can be very bad for the overpaid employee and also very bad for the company.

Many tech companies are going public right now and many tech companies have seen significant share price increases in recent years.  We can expect that most of these are facing real internal motivational challenges that could be extremely hard to overcome.  
The weirdness of RSUs in public companies

Let’s say that a company gives you an offer of $100k salary and $500k in RSUs vested over 5 years.  That essentially means that the company values you at $200k per year (as stock and salary are fairly fungible in public companies).  

Let’s say the stock goes up by 20% after six months.  The RSU grant (over 5 years) is $600k and your yearly comp goes from $200k to $220k (a 10% increase).  No big deal for the company as you are probably worth more than 10% more than what they originally offered you because you now have been at the company for 6 months, understand the processes there, have grown your skills, etc.

But now let’s look what happens when they stock goes up by 300% after 3 years (which happens in the tech world).  Now the original grant of $500k is now $2 million (over 5 years).  So the stock alone is $400k per year.  Add in the salary (with assuming some raises is now $150k/year) and you pulling in $550k per year.  

This is when things get a bit hairy.  Because likely the company only values you at $350k so you are making $200k more than you are worth. In fact, if you quit the company and went to work for its top competitor, you might have a hard time getting more $300k.

So now both you and the company are in a bind.

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Everything I know about data companies (in 30 minutes) and one viral tweet-storm

Over the last year I have been steadily putting together everything I know about running (and investing in) data companies. These companies are trendily known as DaaS (Data-as-a-Service).

I posted it to the SafeGraph blog: https://blog.safegraph.com/data-as-a-service-bible-everything-you-wanted-to-know-about-running-daas-companies-d4cf4c15c038

It is long (will take a good 30 minutes to read) but there is also a summary tweet-storm.

The tweet-storm about the DaaS Bible went viral so including it here:

How do you determine the best business to start?

So you want to start a business eh?
“Yes,” you say. “It has always been my dream to start a business. I just can’t figure out what to start.”

The answer is right in front of you. Literally. It is in this post. (just keep reading)…

The best business to start is to figure out the join of:
1. Something that will be very valuable in the future.
2. Something most smart people do not think will be very valuable in the future.
3. Something you have a real advantage doing.

If you find a business that fits all three criteria, you have a very good chance of building a massive business.

Of course, it is really hard to know what will be valuable in the future (criteria #1). As the future is very hard to predict.

But the good news is, it is much easier to figure out criteria #2 (something people do not think will be valuable) and criteria #3 (something you have a unique advantage in) … if you are honest with yourself. If you can get those two things right, you have a real shot on changing the world.