Why I got Fired from Facebook (a $100M dollar lesson) (2012)(okdork.com)
okdork.com
Why I got Fired from Facebook (a $100M dollar lesson) (2012)
http://okdork.com/2012/09/29/why-i-got-fired-from-facebook-a-100-million-dollar-lesson/
69 comments
The rule with press is that they never listen.
I've had press get released early despite verbal assurances to the contrary more times than not now.
Which means the flood of users showed up before the next major update got released or that I was spending the weekend putting out fires instead of the week.
These people were influencers and bloggers, nothing major.
It's no surprise that this adage also applies to the "big players" like TC.
I've had press get released early despite verbal assurances to the contrary more times than not now.
Which means the flood of users showed up before the next major update got released or that I was spending the weekend putting out fires instead of the week.
These people were influencers and bloggers, nothing major.
It's no surprise that this adage also applies to the "big players" like TC.
I'm more surprised Facebook didn't withhold access to information for TechCrunch after that.
News embargoes are a thing, journalists are not supposed to publish things like this ahead of time
News embargoes are a thing, journalists are not supposed to publish things like this ahead of time
PR people probably had an ongoing relationship with the tech blog, and that relationship would've probably deteriorated. The author of the article wasn't in PR, though.
jsprogrammer(2)
My guess is that he's not fully coming clean with the real reason he was fired. If he was a leader worth promoting 2months earlier and wasn't making product planning spreadsheets then they'd have told him and/or hired someone to help him. That story doesn't jive with being told he was a liability.
Given that he leaked info previously without talking to the team, I suspect that he was fired because he did something of that magnitude again and they decided he could not be trusted and he was out.
Given that he leaked info previously without talking to the team, I suspect that he was fired because he did something of that magnitude again and they decided he could not be trusted and he was out.
Yes, there seems to be something missing. Noah readily accepts (in hindsight) that it was his fault he got fired, but neglects to say what if any steps his manager took to guide Noah to be a better employee. If this were the whole story, his manager would bear some responsibility for things getting so bad.
This is not groundbreaking to read, but it reminds me how some people are detached from reality. They think they are bulletproof, they bring so much value they can't be replaced. Usually this can be true only in very few situations like for top salesman operatives or for genius programmers. People that are as rare as it goes.
Marketing, management, administration - those folks are usually replecable.
Marketing, management, administration - those folks are usually replecable.
I think it's partly a side effect of modern education techniques (and TV), which conditions people to think that they are special. It's a gulf between educators and employers that results in a shock when reality sets in.
Confidence is good, but thinking that the world revolves around you is bad... unless you are calling the shots.
Confidence is good, but thinking that the world revolves around you is bad... unless you are calling the shots.
Every employee is "replaceable" at some point in time. I get the sense from his writing that Noah Kagan is a smart capable guy with a provocative demeanor that gets him into trouble from time to time.
So he made a bad decision and as a result may have lost out on a big pile of money. But he seems to be doing fine and has accumulated more than a couple epic cocktail party stories. Thats a smashing success in my book.
So he made a bad decision and as a result may have lost out on a big pile of money. But he seems to be doing fine and has accumulated more than a couple epic cocktail party stories. Thats a smashing success in my book.
Do all large US tech companies have employment policies where a long-term employee (who got a raise and promotion a few weeks earlier) can be forced out without even any prior hint of a performance issue?
I understand California is an 'at-will' state, but I'd think that the wealthy tech companies who compete to attract talent with free food and gyms would have slightly better management policies (at least for the long-term engineering staff)
Though given this particular individual apparently was an extremely early Facebook employee (likely >100M of vested stock options), he doesn't need the job security to afford rental contract in San Francisco (first month rent + 2 month security deposit, which can be a hefty sum in SF)
I understand California is an 'at-will' state, but I'd think that the wealthy tech companies who compete to attract talent with free food and gyms would have slightly better management policies (at least for the long-term engineering staff)
Though given this particular individual apparently was an extremely early Facebook employee (likely >100M of vested stock options), he doesn't need the job security to afford rental contract in San Francisco (first month rent + 2 month security deposit, which can be a hefty sum in SF)
Yes, surprise firing is technically an option for almost all employees, including the long-term engineering staff talent at wealthy tech companies. It's reciprocal - the employee can quit with no notice also. A very very few public faces, world famous leaders in their field, will negotiate different deals - but the general long-term engineering staff isn't at that level.
I think it's not a point of competition, especially for the talent worth competing for, for several reasons:
1) People don't value the protection as much as they value the freedom of being able to quit, and you only get one or the other. Basically: "I'm good at my job, why do I need protection? But another offer might come along and I might want to leave."
2) People believe it won't happen to them / they have control over it. (I think this is generally true - don't do boneheaded things, keep being good at your job, you won't get fired.)
3) I prefer working somewhere that has the ability to fire bad coworkers. It leads to less bad coworkers.
4) Surprise firings are not really common, and when they do happen, the examples seem to make sense - people get fired for doing obviously bad things (or for being horrible, but that is usually a drawn out process and not the surprise described here.)
5) If you don't announce it, it will be difficult for your next employer to learn the circumstances, so you can always just get another job. (Companies in America tend not to answer questions about why prior employees left, it's mostly up to you to spin the story in the next interview. Most companies (in tech at least) don't even bother checking references because it's unlikely to be productive.)
6) The worst cases of fired-for-no-good-reason are already legally protected
If it was extremely common then this would probably change, but so far in my career it just hasn't seemed like a big concern.
I think it's not a point of competition, especially for the talent worth competing for, for several reasons:
1) People don't value the protection as much as they value the freedom of being able to quit, and you only get one or the other. Basically: "I'm good at my job, why do I need protection? But another offer might come along and I might want to leave."
2) People believe it won't happen to them / they have control over it. (I think this is generally true - don't do boneheaded things, keep being good at your job, you won't get fired.)
3) I prefer working somewhere that has the ability to fire bad coworkers. It leads to less bad coworkers.
4) Surprise firings are not really common, and when they do happen, the examples seem to make sense - people get fired for doing obviously bad things (or for being horrible, but that is usually a drawn out process and not the surprise described here.)
5) If you don't announce it, it will be difficult for your next employer to learn the circumstances, so you can always just get another job. (Companies in America tend not to answer questions about why prior employees left, it's mostly up to you to spin the story in the next interview. Most companies (in tech at least) don't even bother checking references because it's unlikely to be productive.)
6) The worst cases of fired-for-no-good-reason are already legally protected
If it was extremely common then this would probably change, but so far in my career it just hasn't seemed like a big concern.
> It's reciprocal - the employee can quit with no notice also.
Except it's really not. The potential consequences for an employee quitting without notice are far greater than the consequences to the company of summarily firing someone. And, the company has far more power in the employee/employer relationship the vast majority of the time, because people typically have one job and companies have tons of employees. People also tend not to have the kind of savings in the bank that can let them just shrug off a surprise firing.
So, no, it's not reciprocal due to the power imbalance inherent in the relationship.
Except it's really not. The potential consequences for an employee quitting without notice are far greater than the consequences to the company of summarily firing someone. And, the company has far more power in the employee/employer relationship the vast majority of the time, because people typically have one job and companies have tons of employees. People also tend not to have the kind of savings in the bank that can let them just shrug off a surprise firing.
So, no, it's not reciprocal due to the power imbalance inherent in the relationship.
Can you elaborate? What consequences are there for an employee who gave a same-day notice on Friday to start a new gig on Monday?
I can only think of company witholding the final check for longer than usual, but that's understandable with how payroll is cut at some large orgs.
I can only think of company witholding the final check for longer than usual, but that's understandable with how payroll is cut at some large orgs.
I was more referring to damage to one's professional reputation.
I don't really buy that. Unless you're at the C-level, you know nothing about how the person working next to you quit their previous job.
The only exception being them volunteering such information, but even in that case an abrupt notice of termination paints the story teller in a positive light of him (finally) seeing the light and moving away from sinking ship that is her old job to the unbridled rocketship of opportunities and awesomeness that is her new job.
The only exception being them volunteering such information, but even in that case an abrupt notice of termination paints the story teller in a positive light of him (finally) seeing the light and moving away from sinking ship that is her old job to the unbridled rocketship of opportunities and awesomeness that is her new job.
Since when is quitting damaging? Obviously there are a handful of extenuating circumstances where you really leave an employer out to dry, but in the general case there's nothing wrong with quitting a job.
I'll just point out that in the UK and most of Europe we don't see a reason why this should be reciprocal. You can quit at any time, but you also can't be fired without a reason if you've worked at a company for more than 1-2 years.
It doesn't stop people from firing bad coworkers, and it appears to have no negative effects on employment.
It doesn't stop people from firing bad coworkers, and it appears to have no negative effects on employment.
> People don't value the protection as much as they value the freedom of being able to quit, and you only get one or the other.
That's not true, at least not in Holland (and I suspect much of Europe).
As far as I know, I cannot be fired without good cause, but I can quite any time I want. So clearly it's not necessarily one or the other (outside of wherever you're working).
That's not true, at least not in Holland (and I suspect much of Europe).
As far as I know, I cannot be fired without good cause, but I can quite any time I want. So clearly it's not necessarily one or the other (outside of wherever you're working).
I don't get where 100M comes in. Part of his compensation was in stock, and they can take that away? How does that work?
My understanding is the stock options gets released overtime ("vests") following a fixed schedule.
So it's basically part of the compensation he hadn't yet earned...
So it's basically part of the compensation he hadn't yet earned...
At-will means at-will. That said, larger companies generally have policies that require documentation and a "personal improvement plan" (PIP) before termination for cause. This is mostly to provide documentation in the event of a wrongful termination suit.
However, generally if an employee is considered a serious liability (they have hurt or threatened another employee) they can be fired immediately.
Startups tend to be a little more aggressive on termination because they can't afford to pay a salary to someone for months hoping they improve.
However, generally if an employee is considered a serious liability (they have hurt or threatened another employee) they can be fired immediately.
Startups tend to be a little more aggressive on termination because they can't afford to pay a salary to someone for months hoping they improve.
> This is mostly to provide documentation in the event of a wrongful termination suit.
While it might serve that purpose, it's primarily to make sure that middle-management takes reasonable steps to let people correct and thinks the decision through before acting. Nobody wants to work in a place where people get surprisingly or randomly fired, or where a manager is firing all the people they don't like. Having processes (mostly) prevents that sort of thing from happening.
While it might serve that purpose, it's primarily to make sure that middle-management takes reasonable steps to let people correct and thinks the decision through before acting. Nobody wants to work in a place where people get surprisingly or randomly fired, or where a manager is firing all the people they don't like. Having processes (mostly) prevents that sort of thing from happening.
Most companies can fire you for any reason and do.
Many take more times to dot their Is, but not all do. This is when FB was growing very fast so I doubt they had time. OTOH I bet being fired at Microsoft takes longer.
Many take more times to dot their Is, but not all do. This is when FB was growing very fast so I doubt they had time. OTOH I bet being fired at Microsoft takes longer.
"At that time, here’s the order of what was important in my life:
1- Facebook 2- Myself ..."
Reminds me of the Gervais principle, this guy seems to be a clueless at that time, a true believer in the firm. Glad for him he started his own venture.
http://www.ribbonfarm.com/the-gervais-principle/ (very long read)
1- Facebook 2- Myself ..."
Reminds me of the Gervais principle, this guy seems to be a clueless at that time, a true believer in the firm. Glad for him he started his own venture.
http://www.ribbonfarm.com/the-gervais-principle/ (very long read)
Now these are an amazing set of essays. I was wondering why so many people are ineffective at work despite doing productive work.
How many times is this guy going to rehash being fired from facebook as validation?
His projected image repels me: the antithesis of a hacker - a smiley/slick bro-dude.
Who ends up ruining your startup culture.
His projected image repels me: the antithesis of a hacker - a smiley/slick bro-dude.
Who ends up ruining your startup culture.
The quote:
> The BEST way to get famous is make amazing stuff. That’s it. Not blogging, networking, etc.
That reads like making a product was never the goal, his goal is attention, I don't think I know one programmer that's programming because they want to be famous.
> The BEST way to get famous is make amazing stuff. That’s it. Not blogging, networking, etc.
That reads like making a product was never the goal, his goal is attention, I don't think I know one programmer that's programming because they want to be famous.
What did you expect? It's an blog about marketing ... (Or "info-product" as they like to call it.)
It's a post from four years ago, the author isn't the one bringing it up again
Very true. And based on that, I considered moderating my tone. But, harping on about facebook is what he does and he does represent the influx of marketing that's closer to car salesmen than hackers.
Noah is a content marketer. He'll repackage the same content over and over until people stop clicking on it. I don't understand why people read these kinds of blogs, but apparently they're popular.
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In other words, he didn't learn his lesson.
>until people stop clicking on it.
Heh, sounds like he has. His goal is to drive traffic and it appears to be working.
Heh, sounds like he has. His goal is to drive traffic and it appears to be working.
This is a pretty old post, were there others?
He says it cost him $100m. Is that because of the stock options he lost when he was fired?
To have $100m in stock - he would have been a very early hire?
To have $100m in stock - he would have been a very early hire?
Facebook is worth $350B, so $100M is only 0.03% equity. He likely had more than that, but the article is old so the number today could be more like $500M.
He said he worked there when there were 30 people so he must have been a very early employee.
It's important to purchase your vested options as early as possible. So they can't take your options back. Of course it's easier if you are resident in a jurisdiction where you have to pay the Capital Gain Tax when you sell.
> Of course it's easier if you are resident in a jurisdiction where you have to pay the Capital Gain Tax when you sell.
How does having to pay a tax make things easier?
How does having to pay a tax make things easier?
You always have to pay the CGT tax (which is 13-30% in countries I know). The difference is whether you have to pay the tax every time the share price climbs, or only when you sell and pocket the added value.
It's a serious problem in California. When you are granted options at $1 and the company IPOes with a valuation of $100 per share, all employees who have exercised their options are reputated having made a $99 gain. So they have to pay, say, $30 per share. But it's so virtual money, because they may not have $30x number of shares in cash. So those people are forced to either borrow money or sell their shares to pay their taxes. Worse: Employees often aren't allowed to sell during a lock-in period after the IPO, and they can't sell their shares at all before the IPO. So they are constrained to borrow. Worse: If the company loses momentum and comes back to $1 the next year, then they can't get reimbursed for the $30 tax they paid. So they're in for $29. Per share.
Compare that to Australia. If an Atlassian employee was granted stock options, they only have to pay the CGT when they sell. It didn't matter that Atlassian went IPO in 2015, or that shares changed hands when the administrative location was moved to UK circa 2013 (which could have been considered an exit event in US). If employees keep their shares until 2080, they'll only have to pay the CGT in 2080 with the money they got from selling.
Disclaimer: I'm not a financial adviser and I'm not saying that employees should sell their shares.
As a side note, shares go from $1 to $10 partly because the company gets better than expected, and partly because they don't give dividends to employee-issued shares. A share valued $100 one year and $104 the next year is the same thing as another one which stays at $100 and gives you $4 dividends.
It's a serious problem in California. When you are granted options at $1 and the company IPOes with a valuation of $100 per share, all employees who have exercised their options are reputated having made a $99 gain. So they have to pay, say, $30 per share. But it's so virtual money, because they may not have $30x number of shares in cash. So those people are forced to either borrow money or sell their shares to pay their taxes. Worse: Employees often aren't allowed to sell during a lock-in period after the IPO, and they can't sell their shares at all before the IPO. So they are constrained to borrow. Worse: If the company loses momentum and comes back to $1 the next year, then they can't get reimbursed for the $30 tax they paid. So they're in for $29. Per share.
Compare that to Australia. If an Atlassian employee was granted stock options, they only have to pay the CGT when they sell. It didn't matter that Atlassian went IPO in 2015, or that shares changed hands when the administrative location was moved to UK circa 2013 (which could have been considered an exit event in US). If employees keep their shares until 2080, they'll only have to pay the CGT in 2080 with the money they got from selling.
Disclaimer: I'm not a financial adviser and I'm not saying that employees should sell their shares.
As a side note, shares go from $1 to $10 partly because the company gets better than expected, and partly because they don't give dividends to employee-issued shares. A share valued $100 one year and $104 the next year is the same thing as another one which stays at $100 and gives you $4 dividends.
> When you are granted options at $1 and the company IPOes with a valuation of $100 per share, all employees who have exercised their options are reputated having made a $99 gain. So they have to pay, say, $30 per share. But it's so virtual money, because they may not have $30x number of shares in cash.
You're describing AMT, and the reason it exists is to account for an obvious behavioral pattern, which is never to sell. The pattern gets more attractive with increase in wealth, as loans against the public securities pledged as collateral are widely available at sub-1% in current rate environment, e.g. https://www.interactivebrokers.com/en/?f=interest
While risky (with margin calls and what not), a loan against small portion of the portfolio is pretty tax-efficient, as loan proceeds are not income and are not capital gains.
If what you're describing in Australia is correct, my guess is that it's a bug in Australian tax system, not a feature. Wait for a few multi-millionaires or billionaires to prop up, never sell a single share of their portfolio while making their living through portfolio loans, and see what the public and tax authorities have to say about that.
You're describing AMT, and the reason it exists is to account for an obvious behavioral pattern, which is never to sell. The pattern gets more attractive with increase in wealth, as loans against the public securities pledged as collateral are widely available at sub-1% in current rate environment, e.g. https://www.interactivebrokers.com/en/?f=interest
While risky (with margin calls and what not), a loan against small portion of the portfolio is pretty tax-efficient, as loan proceeds are not income and are not capital gains.
If what you're describing in Australia is correct, my guess is that it's a bug in Australian tax system, not a feature. Wait for a few multi-millionaires or billionaires to prop up, never sell a single share of their portfolio while making their living through portfolio loans, and see what the public and tax authorities have to say about that.
Very interesting, thank you for your explanation. It's funny because France is like Australia: CGT when you actually profit. But could it be that the Australian and French banking systems aren't as complete as the US system, hence not offering loans against public securities? Between that and the fact that "start-up millionnaire" is only really a SV syndrome (The French economy is so stagnating and our administrations so moronic that you wouldn't become millionnaire with a start-up in France), maybe our governments haven't faced the situation often yet.
The article mentions he worked at a 30-person Facebook, so I guess that makes sense
The good news is that most non-founder startup employees never risk losing out on this much money.
I'm hesitant to submit this comment, but something really rubs me the wrong way about this post. It most reminds me of the 'uncanny valley' feeling. Or Patrick Bateman, but that would be too hyperbolic a comparison.
Maybe it's the advertisement for his book at the end of the article. Maybe it's the repeated 'what happened to me was justified and I thank those who make the decisions' groveling-like contriteness, even though objectively that should be a good thing. Maybe it's the informal-but-not-like-idlewords/pinboard tone of voice. Or maybe it's just the connection with AppSumo and the general dislike I have of people who do marketing as their primary talent.
I feel like I'm being unfair and I deserve to be downvoted because I cannot properly articulate what bothers me so much about this, but at the same time it's so... unsettling that I can't keep myself from doing so. Maybe if I talked to the guy I'd feel different. Maybe I'm just unfairly biased against marketing as a profession. It's very confusing and my apologies for anyone who read this whole comment.
Maybe it's the advertisement for his book at the end of the article. Maybe it's the repeated 'what happened to me was justified and I thank those who make the decisions' groveling-like contriteness, even though objectively that should be a good thing. Maybe it's the informal-but-not-like-idlewords/pinboard tone of voice. Or maybe it's just the connection with AppSumo and the general dislike I have of people who do marketing as their primary talent.
I feel like I'm being unfair and I deserve to be downvoted because I cannot properly articulate what bothers me so much about this, but at the same time it's so... unsettling that I can't keep myself from doing so. Maybe if I talked to the guy I'd feel different. Maybe I'm just unfairly biased against marketing as a profession. It's very confusing and my apologies for anyone who read this whole comment.
Classifying employees as "growers" or "showers"? The author's a dick, either way.
I've only worked for one company that I didn't run. They fired me. They paid me a six figure discretionary bonus anyway (in 1986 dollars). When I argued that this was too low, they said "Well, we did fire you."
I basically was fired for not trying to fit in. This was a Wall Street job, specifically as a stock analyst, in which you didn't work much with colleagues. Still, I didn't look or act the part of a well-dressed Wall Streeter.
Perhaps I should have changed my ways after an Institutional Investor Magazine article, written because I was the youngest #1-ranked stock analyst ever, attacked me for my clothing and personality. :)
I basically was fired for not trying to fit in. This was a Wall Street job, specifically as a stock analyst, in which you didn't work much with colleagues. Still, I didn't look or act the part of a well-dressed Wall Streeter.
Perhaps I should have changed my ways after an Institutional Investor Magazine article, written because I was the youngest #1-ranked stock analyst ever, attacked me for my clothing and personality. :)
Total random aside, but as someone who reached a level of prominence in that space, what are your views on the investing strategy espoused by A Random Walk Down Wallstreet, Bogleheads, etc.?
When I was an analyst, I put together a portfolio of 5 stocks for my parents. The value doubled in 18 months, even though 2 of the 5 went bankrupt.
After I was an analyst, however, I insisted there was nothing I could do for them that was better than index funds. They ultimately felt neglected, and went to a money manager, who of course charged them a lot for underperforming the market.
After I was an analyst, however, I insisted there was nothing I could do for them that was better than index funds. They ultimately felt neglected, and went to a money manager, who of course charged them a lot for underperforming the market.
[deleted]
Here is the free Kindle version on Amazon:
http://www.amazon.com/How-Lost-170-Million-Dollars/dp/161961...
Note: interestingly, Noah said the lost was $170MM (in the book name) not $100MM as titled on the blog.
http://www.amazon.com/How-Lost-170-Million-Dollars/dp/161961...
Note: interestingly, Noah said the lost was $170MM (in the book name) not $100MM as titled on the blog.
Grow up. Get a life. A job is like a shoe. If it falls apart or gets worn out... well, get another, and move on (or "run", if it's a new pair of sneakers)
I don't understand where the 100m figure popped out of.
I didn't know California was an at-will state. I thought it was fairly liberal there. At-will clauses tend to be written by right-wingers.
"The product is strong with this one. Now learn some grammer. -Mark"
I hope the return gift was the Oxford English Dictionary.
I hope the return gift was the Oxford English Dictionary.
> Error establishing a database connection
The real reason
The real reason
[deleted]
heh, google cached version: http://goo.gl/hRUKyu
(From 2012)
2- Marketing. The marketing team’s plan was not to do anything and the night before we opened Facebook to the professional market (anyone with a @microsoft.com, @dell.com, etc…) I emailed TechCrunch to let Michael Arrington know to publish it in the morning. He ended up publishing it that night (I was at Coachella and will never again attend) before the actual product was released in the morning. I immediately notified the e-team and assumed full responsibility.
Lesson learned: I don’t think what I did was that wrong since the marketing team did not do anything to promote our new features. My lesson learned was more I should have involved them instead of just going around them. (Learn How to Hire a Great Marketing Person.)
He leaked a major Facebook update to TechCrunch? I'm surprised he wasn't fired on the spot.