I’m wondering if anything in their setup is worth incorporating into the “status quo”
The most immediately relevant thing is equity-based comp that doesn’t have a tax hit.
Another thing I find interesting is whether this comp might be more “mission-aligned”:
- It’s likely this is all just to accomodate their “non-profit with limited profit subsidiary” structure
- But there's still a deeper question there: do current specifics of how startups do comp / investment / exits somehow result in societally suboptimal outcomes?
- If so, how exactly, and is it fixable, or are those inherent properties of an ecosystem of competitive, high-growth startups?
- One way that might be the case is if there’s a pressure for “growth at all costs”, which is something OpenAI would want to avoid.
- The pressure for that could come from a lot of sources — intrinsic desire for growth; financial expectations from shareholders (employees, VCs, public market investors, even customers); regulatory requirements around fiduciary duty; existential risk of going under or competition, or needing to hit a certain size to achieve whatever it is you want to achieve
- Another way this could be the case would be limited exit opportunities, or limited creativity around them / sticking to well-trodden paths, ultimately resulting in control of the company being handed over to either poor management or groups prioritizing growth at the expense of good product
- Thinking about twitter and reddit’s API shutdowns here — how much do unpopular product decisions like that come from legal specifics? Or perhaps those would have happened no matter what, to keep the companies from going under or to have enough profits to fund further innovation.
- It’s not obvious that this setup avoids a motivation for “growth at all costs” — employees’ pay is still based on increasing profit, and if it doesn’t grow as fast as competitors it may just become irrelevant. But it’s possible it affects other strings around company control. Not sure — IANAL :)
(Replying to PARENT post)
The most immediately relevant thing is equity-based comp that doesn’t have a tax hit.
Another thing I find interesting is whether this comp might be more “mission-aligned”:
- It’s likely this is all just to accomodate their “non-profit with limited profit subsidiary” structure
- But there's still a deeper question there: do current specifics of how startups do comp / investment / exits somehow result in societally suboptimal outcomes?
- If so, how exactly, and is it fixable, or are those inherent properties of an ecosystem of competitive, high-growth startups?
- One way that might be the case is if there’s a pressure for “growth at all costs”, which is something OpenAI would want to avoid.
- The pressure for that could come from a lot of sources — intrinsic desire for growth; financial expectations from shareholders (employees, VCs, public market investors, even customers); regulatory requirements around fiduciary duty; existential risk of going under or competition, or needing to hit a certain size to achieve whatever it is you want to achieve
- Another way this could be the case would be limited exit opportunities, or limited creativity around them / sticking to well-trodden paths, ultimately resulting in control of the company being handed over to either poor management or groups prioritizing growth at the expense of good product
- Thinking about twitter and reddit’s API shutdowns here — how much do unpopular product decisions like that come from legal specifics? Or perhaps those would have happened no matter what, to keep the companies from going under or to have enough profits to fund further innovation.
- It’s not obvious that this setup avoids a motivation for “growth at all costs” — employees’ pay is still based on increasing profit, and if it doesn’t grow as fast as competitors it may just become irrelevant. But it’s possible it affects other strings around company control. Not sure — IANAL :)