The article's main point seems to be that Everpix could have done well by paying employees well under (half?) market rates and succeeded. Maybe by handing over a lot of equity to employees (probably most of it), it may have even worked. But I think the author is missing the opportunity cost here. All of these Everpix employees could likely have easily found employment in other startups with more VC money and received twice the pay Everpix could give them. This is the market in action - we have enough of these photo sharing gimmicks already. Those employees are better used in other startups who can actually make enough money (read: fulfilling market needs better) to pay them properly, and so I think it was the right move to shut down and move on.