The Psychology of Giving Fewer Options at Startup

There’s something strange about the Incentive Stock Option system at Startups in America. Suppose the founders want to make employees work harder. It is to his greatest advantage to give his employees as few stock options as possible. This is not to preserve his own stock options or reduce dilution, but to motivate the employees to work harder.

Because typically, bosses at work get somewhere from 100x to 1000x the stocks an employee has. So a founder who is comfortable with a $1Billion IPO means his employees will only get similar level of reward if the company IPO’s at $100Billion or even $1 trillion. So the employee has to aim much higher than the founders.

This may explain why often the executives at companies will make obviously irrational decisions. They already have $10million, why go to the extra leg of getting to $20million?

But the employee has only $100k, getting to $200k is a huge improvement on quality of life.

How Old is Your Computer

I came to an interesting measurement of age of computer today. Suppose we use something simple minded (such as throughput rate of Integer Arithmetics) as measurement of computing power. Let us further suppose that Moore’s law is really followed by the development of computers during it’s entire development since the very first transistor, then we can make a very interesting calculation.

Let T be the total computing power of all humanity today. (This should be estimable based on number of CPU’s Intel and AMD produces each year).

Let O be the origin where the very first transistor was invented, when the total semi-conductor based computing power of humanity is some small number like (1 integer add)/minute.

Fit an exponentially growing curve between the total computing power between time T and O, plot a graph of this curve with time on the X-axis and total computing power of humanity on the Y-axis.

Now, then, to determine the power of your computer (or computing cloud that you own), simply find on the Y-axis the power of your computer and drop down to X. At that point you can claim:

“My computing cloud is equal to all of human computing power as of February of 1981.”

Makes for great PR snippet.

Also, you can use it as a pitch to get more funding:

“Our computer cluster is still in the 1980’s !!”

“But Dad! My laptop is like so 1950!”

Fooled

Okay, I admit it, I’ve been fooled.

So, apparently, Menlo Park, CA, even though it has a street called the “Edison Way” is not the original Menlo Park (NJ) where Edison worked.

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