This isn’t a tale of a popular tech startup having a well-publicized exit. While Tom Preston-Warner’s piece about turning down acquisition money to start GitHub has always been a reference among the entrepreneurial crowd, Cliff Moon’s piece about taking the money felt closer to home. My experience with acquisition was fraught with drama and conflict, and this is my story of the long tail of tech startup success, the kind people aren’t proud to talk about.
The job had been exhilarating. It was my first real experience working solely on a product instead of as a consultant, the first time I had skin in the game. It provided a space where I didn’t feel overshadowed, and gave me a new perspective about what I was capable of: I rose to a number of technical challenges, took a large hand in shaping the product design, and helped build a great team of people. I was passionate about my work.
In hindsight, the problems were obvious. We built a product with a vendor’s bleeding-edge technology in hopes of platform synergy, lured in early adopters and gave them too much for free. The vendor abandoned their technology, and our generous free services attracted people who proved hard to convert to paying customers. The engineering team spent most of our time battling abuse of services, and as the product vision faltered, people left for other companies. I wasn’t surprised when the Founder announced we were looking for a buyer in order to continue operations.
I wrote a resignation letter soon after, but never turned it in. I was starting to feel burnt-out: disinterest in my work and resentment towards the situation at the company. Several friends encouraged me to leave, to take a few months off, to clear my head, and get a new job. My wife and I were shopping for a house, and we put that on hold. I didn’t really want to stay, but I was the last original employee left, and I had a large hand in creating most of our own intellectual property. I had a lot of hope that someone would want to keep me around.
There were a couple of window-shoppers. Most of the engineering team left what had become a depressing, high-stress environment, to start their own companies or freelance. I wasn’t happy there, but I hadn’t left, and the founder encouraged me to take a vacation. When I got back, I found out we had an interested buyer.
About a week after due diligence we got the news. They wanted to go forward with the acquisition. The buyer wanted to integrate our product into their strategy and wow just look at all that synergy! Best of all, we wouldn’t have to publicly admit failure. We had a narrative of success. My common-stock options were worthless, but somehow they would translate to a retention offer — the proverbial golden handcuffs that would keep me around.
The tech industry thinks it has everything figured out. We have these systems that tell us how people are contributing to something and it’s a meritocracy so naturally everyone is getting paid fairly — never mind the huge taboo about talking about compensation and did we say it’s a meritocracy already? Pay no attention to that man behind the curtain and be happy we’re paying you at all to do this thing you love doing! While talking about your compensation outside the company can be a protected trade secret, talking about it among co-workers is federally protected speech. Never mind that your informal internal structure is invisible to outsiders and the only thing that matters to outsiders is the org chart.
Which is a roundabout way of saying my offer wasn’t what I was expecting. Of course it wasn’t — all I had to go on were the success stories.
Don’t get me wrong — the salary was a nice upgrade — but I had been working below market rate for a few years. The retention bonus was, as a friend put it, a nice severance. The new employment contract was draconian enough that I hired a lawyer specializing in employment law. The team I helped build was unhappy enough with their offers that we all got together to sit down and talk openly with each other about what someone else thought we were all worth: not much.
Everyone else had family to support. If it weren’t for that I would have pushed them all to walk away and find something better. I felt guilty because I had encouraged a few of them to stay this long. We had a hunch that the three or four month-long integration period until our first payout was going to be miserable. No one had a good feeling about signing on, but when you have to sign or lose your job, when you don’t have the ability to walk away, you don’t really have any negotiating power.
I also knew that whatever goals we drew up for integration, there would be a much better chance of meeting them if I were around to help shape them, to protect them from scope creep, and to keep things on track. I figured I could do some good and help everyone get a better deal.
My engineer’s mind sought to optimize the negotiation process, something a large bureaucracy retracts from like poison. In their eyes, collective bargaining is communism. I worked with my lawyer to get a contract amicable to their lawyers and myself, and shared it with my team. I got the nastiest bits removed — a non-compete severe enough to prevent working with computers for two years, and protection of my prior intellectual property. I couldn’t get protection for my ongoing tech side-projects — they considered those moonlighting, but I figured improvements were improvements and I could spend a few months learning Spanish and the guitar instead. So I said: If my co-workers all got the same deal, I’d sign too.
Various people made veiled threats about being careful, because tech is a small town and I shouldn’t burn any bridges, so I knew the gambit was working. I pointed out that some of the people I was sticking up for could literally walk across the street and get better compensation even including a full years’ worth of retention bonuses, but it fell on deaf ears. They tried to win me over personally with stories about the opportunities I’d have to take the product to the next level of the enterprise. It was an odd staring contest to see who would blink first.
The remaining team signed, and while not entirely happy with things, felt they could live with their new situation through the months it would take to complete integration. At the very least, it would buy them time to find other work while continuing to pull a salary and have insurance for their families.
As for myself, I knew I couldn’t sign. I could feel it. Staying on was not the right thing for me to do. I was going to turn the offer down, to walk away, and find some contracting work. The money might not have been as good in the short-term, but at least I’d be away from the environment, could put it all behind me, and move at my own pace.
This is where the story should end, and where my regret begins: I signed anyway.
Some smooth-talking, the last concession on the contract — side projects, and a just-enough-to-matter bump in salary managed to short-circuit my certainty about walking away. I figured: it was three or four months to the integration payout. I’d get a respectable bit on my résumé. I’d help the rest of my team navigate scope creep on the integration goals. It was probably easier money than going out and finding new work when I was wasn’t motivated.
I try to live my life so that I don’t have regrets. To say that I made a mistake and learned something from it. To say I made the best decision I could have at the time given my knowledge and feelings. I can’t do that with this story. I knew in my head I shouldn’t have signed on, I felt it so deeply in my gut that it triggered a physical reaction, and yet I went ahead and did regardless.
There’s a bit of talk about burnout in the tech industry, but not as much as there should be. I’ve lost track of the number of friends and acquaintances who’ve taken a few months off after leaving a particularly intense job, simply to clear their heads. Burnout is a poorly understood sickness that resembles clinical depression, occupational stress feeds it, and the pressures of integration for acquisition is a feast.
A few of the members of my team who were less well-compensated used the time immediately after the acquisition announcement to job-hunt. One of them literally did walk across the street to get better overall compensation. I tried to keep my head down and focused on the goal, the subsequent payout, and my subsequent freedom.
I started using some funny math to get through each day:
Solve for as the monetary value of today. Set by monthly salary, by the value of the carrot dangling in front of you, by the number of days remaining until sign-off, and as a range of days past that encompassing at least two regular pay cycles.
Every day this number went up, and every day I thought to myself, There is only one thing we say to burnout: not today. I told myself that for four months.
It’s a classic form of sunk cost fallacy, and knowing doesn’t help. The lie is that only the last day is worth , and every day before that is only worth .
There was a time about a month before sign-off where it looked like things were going to fall apart, like we were going to miss the goal. I longed for the certainty of knowing, one way or the other. We had purchased plane tickets for a multi-month trip abroad the previous week, and were now counting on meeting the goal to help finance the trip. I started lining up some contracting work and held my breath, but since many important people had a stake in the integration being a success, that wasn’t necessary. Thanks to some hand waving and some smooth talking, we were back on target.
I didn’t have enough energy to pursue my side-projects, to take advantage of the hard-won right. When I wasn’t working, I didn’t want to be near a computer at all. I went hiking and took photographs, I made paintings, I brewed beer, I learned basic Spanish. I wrote bad fiction about my experiences at the startup, and an eight-page resignation letter that I never sent, to qualify why I wasn’t happy.
Through a series of small miracles, we got sign-off on the goal. While this was a relief, it wasn’t the end — technically, according to contract, they had to pay us. After problems with basic things like payroll and insurance, no one wanted to risk having to fight further to get what they were due. Best to wait until the money came through before sending any resignation letters. There was some confusion about whether it would be the next pay cycle or the one after that, with how they’d withhold taxes, how no one seemed to know anything. All we could do was wait.
I will never forget the morning of the pay cycle day after we got sign-off. I woke up a bit early, and was pleasantly surprised by my bank balance. It happened. I posted a smiley face to my team’s backchannel, and made coffee. I wrote a two-sentence resignation letter, walked into the office enjoying what was probably my first genuinely happy day of the year, and quit.
I hadn’t spoken to the Founder since the deal went through, and he said some words devoid of emotion or context. Words relaying facts. Words said because everyone expected him to say something. I walked out the door, leaving a job that provided challenges I didn’t know I was capable of matching, a backdrop for the one of the most intense periods of my life, a meeting place for people whom I’d work with again in a heartbeat. Most of my remaining co-workers already had other jobs lined up, and put in notice shortly thereafter.
On my walk home, I got an anonymous text message with a photo of the term sheet. It was a kick to the gut when I learned that the people who pushed hardest for me to stay to this point were making out like bandits. I nearly threw my phone into the river.
We were heading out of the country the following week, putting everything into storage. We left the apartment I had lived at longest in my adult life, the temporary compromise until we could buy a house, and got on a plane. For the first time in years I wasn’t weighed down by somebody else’s goals.
This is also not where the story ends. My time earning the payday from the acquisition was over, but I would still pay the cost of the stress and burnout for another seven months. This is important and bears repeating: Burnout is a poorly-understood sickness with symptoms similar to those of clinical depression. Continuing to do something that contributes to a problem only compounds it.
Going abroad, physically removing myself from the environment for something semi-alien, with a new language and new customs to learn, was good for the start of recovery. It gave me something else to focus on because I simply did not have the energy to pursue some tech ideas which, months earlier, I wanted to turn into products. Where I expected to find my drive there was instead an emptiness, a bitterness, a sense that everything was futile.
So I learned Spanish. I dug deeper into the process of making photographs. I hacked on a silly bash DSL. I didn’t have a scale, but between a lack of stress and eating better, I went down three notches on my belt. I spent a month on the beach, made new friends, and learned from the butcher that the amazing steak I was paying four dollars a pound for came from cows grazing down the road. While I didn’t have the energy to code, after a few months I coalesced some thoughts on product development.
After we got back home, I had a bit of a relapse from the culture shock of both returning to the US and of talking to people in the tech world and doing code-on-whiteboard interviews. The stress put a strain on my relationship with my wife, and I am forever grateful to her for allowing me the space to heal. I spent some time thinking about what I wanted out of a job, realized I no longer wanted to work with the tech stacks with which I had professional experience, and I wanted to work on something meaningful.
I’m not entirely sure when exactly I stopped feeling the effects of burnout. About fifteen months after the start of this story, I picked up some contracting work in a project that I was actually excited about. I no longer felt the emptiness, the bitterness, and I knew I was better.
I focused so narrowly on the payout that I didn’t see the broader emotional cost. In the end it wasn’t worth it. I would have been better off not signing, not putting myself under additional stress, not making the problem worse. I should have listened to my gut and turned it down.
I’ve heard similar stories from friends and acquaintances about the lasting effects of a job that demands too much personal sacrifice. Many of them needed several months to recover, or moved on to new, similarly unhealthy rebound jobs to escape the toxic environment they were in. The recent New York Times piece about Amazon’s culture hit home for me because it portrays the underlying ideals of those environments taken to pathological extremes.
I’m not the only person to notice. People are talking about finding balance, and telling their stories. The sad thing about the metrics-driven performance culture the Times describes at Amazon is studies show overworked people perform worse. The intensity of these environments and scope of the projects help people feel like they’re part of something big, something worth making sacrifices for. We call that feeling passion. It’s addicting and it clouds judgement, but it doesn’t have to be all-consuming, and it shouldn’t push people towards harm. Be careful with passion and those who would use it against you.