Facebook's latest raise to cash out employees is disgusting

Sorry, but they've earned it. Facebook is raking in cash and users. It's turned down acquisition offers that could have rewarded early employees. There's little reason to doubt Andreesen's assertion they could be profitable if they chose to, or doubt current management's projection of profitability in 2010.

Facebook is still strategically deferring other goals in favor of growth, going for maximum expected-value rather than being risk-averse. That's the right choice for their investors, who have broad portfolios.

But Facebook still wants to retain and attract excellent employees who are, quite rationally, more risk-averse. Otherwise, employees with vested but nontradable shares could only "diversify" their personal portfolios by leaving Facebook and earning other compensation elsewhere. (Or, by making private sales to third parties, a complication neither employees nor Facebook likely prefer.)

The blogger's analogy to his own situation -- where he's working so that his company "survives past the summer" -- is absurd. Do what Facebook's done, and then compare your situation to theirs.

I wonder why they don't do profit sharing?

Oh wait!

Never mind.

As an aside, I have noticed more and more profit sharing in China recently. Maybe it is only because my Mandarin is finally getting respectable, and I can now interpret what was there the whole time. But it is an interesting contrast. Our workers get 'cash-outs' or 'guaranteed bonuses' in the case of bankers. Their workers are forced to share in the profits, AND losses of the company. Time will tell which is the better incentive system I suppose.

One more thing I know people will get a kick out of, over there they also have another crazy idea. If they make profits, they split it among the shareholders as well! I think it was Yunnan that just made the largest payout ever to A-share holders a few months back, March maybe. Largest payouts for China that is, but there is a bit of a competition among the companies to one up each other. Imagine that.

In the mildest of possible voices, I'd like to suggest that the reason some facebook employees might be GODDAMN PISSED OFF is because they've seen a smaller subset of employees cash out previously. Just my random guess. Or something. Maybe something involving hiring lawyers, and pursuing lawsuits, and things of that nature.

Last night I went out for sushi with some co-workers (we work at a tech startup). We were discussing whether it was really fair that we earned so much more than the waiters/waitresses at the restaurant, especially given how difficult we ourselves would have found their jobs to be.

We realized that it all came down to value. Who has generated more value in the world -- folks working at Facebook for two years (currently valued at a billion dollars, give or take), or someone selling trucks at a dealership (apparent value zero, if this imaginary dealership is downsizing)? I think it's pretty obvious that it's the engineers who've generated more (admittedly, only monetary) value.

So, yes, Facebook is raising money to give back to the folks who made them what they are. What monsters.

Sadly, whenever I see that the site is thisisgoingtobebig.com, I hesitate to click. I can't say this article has changed my mind.

I can see why he's upset, but the reasons behind this kind of thing go way beyond Facebook. Why single them out?

To answer my own question, I guess they're a particularly annoying example.

'Tis a fine bit o' trollin', indeed. One of the better attention-scamming blog entries I've seen.

Next time, could you put in a few more references to "damn kids," and a photo of the American flag, drifting over a car dealership, perhaps?

"Equity? These lazy Palo Alto kids want equity? Next time they'll want free chocolate sundaes and health care!"