We need more calm companies(justinjackson.ca)
justinjackson.ca
We need more calm companies
https://justinjackson.ca/calm-company/
24 comments
> Getting laid off doesn’t just rattle your career; it shakes the very foundation of your life. I've seen friends lose their jobs and go into an existential tailspin. It's not uncommon for them to blame themselves and to feel immense guilt and shame. The experience is especially hard on parents whose families depend on them for income.
What shook me up is when top performing coworkers were "laid off" because, due to recent downmarket conditions, there were slightly less competent candidates available at a heavy discount. These top performing coworkers worked extremely hard, were great at their jobs and often sacrificed personally when the company needed them but they were good negotiators as well and had negotiated good, above market salaries.
Once the project took off, the owners fired them and replaced them with cheaper workers who weren't as good but good enough to maintain and update the product.
It feels to me like the owners gave these people an impression that they would be long term employees, where their short term sacrifices would pay off long term, but effectively used them as flat rate contractors while paying them employee rates (instead of contractor rates).
I wish there was a way to detect such owners.
What shook me up is when top performing coworkers were "laid off" because, due to recent downmarket conditions, there were slightly less competent candidates available at a heavy discount. These top performing coworkers worked extremely hard, were great at their jobs and often sacrificed personally when the company needed them but they were good negotiators as well and had negotiated good, above market salaries.
Once the project took off, the owners fired them and replaced them with cheaper workers who weren't as good but good enough to maintain and update the product.
It feels to me like the owners gave these people an impression that they would be long term employees, where their short term sacrifices would pay off long term, but effectively used them as flat rate contractors while paying them employee rates (instead of contractor rates).
I wish there was a way to detect such owners.
Are you labor working for capital? If so, you work for someone who will fire you for a less expensive version as long as the quality of work is, even superficially, acceptably similar. That's it. That's the flow chart.
Yeah, humans looking to make money lack empathy, which is why regulation is needed to force them to act as if they do
Calm companies exist everywhere. In fact, calm companies probably outnumber “frenzied” companies 10x.
They are the quiet, stable, regional, unsexy businesses that have been around for 40 years. I have a friend who is an SWE at a large regional insurance broker. Very calm work indeed.
They just don’t pay SV wages.
They are the quiet, stable, regional, unsexy businesses that have been around for 40 years. I have a friend who is an SWE at a large regional insurance broker. Very calm work indeed.
They just don’t pay SV wages.
> They just don’t pay SV wages.
As a candidate, how do you separate this kind of company from one where the owners are cheap and want to pay you as less as possible?
There are a lot of companies that advertise terrific WLB, pictures of their employees and their families laughing only to find out none of those employees work there any longer and the pictures were taken on their once-every-10-years retreat at a cheap hotel in MO or WY.
As a candidate, how do you separate this kind of company from one where the owners are cheap and want to pay you as less as possible?
There are a lot of companies that advertise terrific WLB, pictures of their employees and their families laughing only to find out none of those employees work there any longer and the pictures were taken on their once-every-10-years retreat at a cheap hotel in MO or WY.
I think the stereotypical calm company is one with strong financial performance in a stable industry that is somewhat insulated from swings in the macro economy. Think large regional players in insurance, healthcare, finance, banking, etc. It’s large enough to have “professional” managers and a big customer base (so one customer having a problem is not a hair-on-fire emergency).
In my experience you tend to find many more penny pinching owners in the world of small businesses, not at a 1000-person regional life insurance company.
In my experience you tend to find many more penny pinching owners in the world of small businesses, not at a 1000-person regional life insurance company.
I don’t disagree with the premise, but this would come off less self-serving if the author would provide examples of “calm companies” other than just their own.
I see with completely different eyes here. This is a sort of manifesto that tells me where the heart of the founders is.
It also inspired me to do better and look at my own company and myself as a fellow founder. I agree with almost everything he said and I'd like to see my company as being a "Calm Company" too. It's a great opportunity to measure my ideas against other's.
I wish more entrepreneurs would post like that, even if it's not 100% selfless. I think the trade off of getting more eye balls for sharing his vision is totally fair.
Time and again I keep seeing articles like this in HN and it's the reason I'm so addicted. It's such a good filter on all the chaotic crap it's out there.
It also inspired me to do better and look at my own company and myself as a fellow founder. I agree with almost everything he said and I'd like to see my company as being a "Calm Company" too. It's a great opportunity to measure my ideas against other's.
I wish more entrepreneurs would post like that, even if it's not 100% selfless. I think the trade off of getting more eye balls for sharing his vision is totally fair.
Time and again I keep seeing articles like this in HN and it's the reason I'm so addicted. It's such a good filter on all the chaotic crap it's out there.
There is a whole fund full: https://calmfund.com
And other fund with this same model: https://tinyseed.com
And other fund with this same model: https://tinyseed.com
My thoughts exactly. This seems to be a general trend, too. I feel like half the blog posts I read on HN start off interesting but suddenly switch into an advertisement.
Replace "calm" with "privately owned". Investors that aren't actually invested in the company for the long term are ruinous.
> Replace "calm" with "privately owned".
I wouldn't make that claim - it's about the mindset. I've seen plenty of privately owned companies where the owners heavily churn through employees extracting as much as they can from each person and spitting them out.
Their attitude is "I can't pay at or above market, so this employee will eventually leave, so why should I invest in this employee? Let me extract as much as I can while they are here"
I wouldn't make that claim - it's about the mindset. I've seen plenty of privately owned companies where the owners heavily churn through employees extracting as much as they can from each person and spitting them out.
Their attitude is "I can't pay at or above market, so this employee will eventually leave, so why should I invest in this employee? Let me extract as much as I can while they are here"
a sad reality of corporations optimizing for investor returns:
the people who work on and buy the product suffer. Good employees are fired, and useful products are shut down.
Speaking generally: Public companies live in a state of pressure to exploit everything possible to the benefit of shareholders and execs.
It's increasingly difficult to see how benefiting this small group outweighs the massive and ceaseless costs to society as a whole.
the people who work on and buy the product suffer. Good employees are fired, and useful products are shut down.
Speaking generally: Public companies live in a state of pressure to exploit everything possible to the benefit of shareholders and execs.
It's increasingly difficult to see how benefiting this small group outweighs the massive and ceaseless costs to society as a whole.
Calm companies as defined in this article is difficult to pull off in markets with winner takes all dynamics
I think that's a very standard VC line I've encountered in the startup world, but the stats just don't bear it out.
Pick any software business - productivity tools, marketing, data providers, security, UX, medical/healthcare - and the reality is always that 1-5 big companies dominate, while 100s or 1000s of smaller companies, many that fit with the ideas of the "calm company" philosophy, are profitable and even growing (albeit more slowly).
The "winner take all" mentality isn't even true in the sectors where it's supposed to be a hard and fast rule. Social media platforms have a half dozen dominant players, and another 40-50 businesses that are successful by the calm definition. Search engines - Google dominates, but another half dozen and a few hundred vertical search engines (in travel, B2B data, real estate, ecommerce of every kind, etc.) have 10s to 100s of millions in revenue.
Until I see an economy-wide analysis of this "winner takes all" rule, with massive numbers of sectors where no small/calm companies are surviving, will I believe this is true. Seems to me like the "riches in the niches" saying is actually the rule, but it doesn't fit with the unicorn-or-bust returns model of large venture funds.
Pick any software business - productivity tools, marketing, data providers, security, UX, medical/healthcare - and the reality is always that 1-5 big companies dominate, while 100s or 1000s of smaller companies, many that fit with the ideas of the "calm company" philosophy, are profitable and even growing (albeit more slowly).
The "winner take all" mentality isn't even true in the sectors where it's supposed to be a hard and fast rule. Social media platforms have a half dozen dominant players, and another 40-50 businesses that are successful by the calm definition. Search engines - Google dominates, but another half dozen and a few hundred vertical search engines (in travel, B2B data, real estate, ecommerce of every kind, etc.) have 10s to 100s of millions in revenue.
Until I see an economy-wide analysis of this "winner takes all" rule, with massive numbers of sectors where no small/calm companies are surviving, will I believe this is true. Seems to me like the "riches in the niches" saying is actually the rule, but it doesn't fit with the unicorn-or-bust returns model of large venture funds.
Like, both of ye are correct. If you're a VC your fund structure requires winner takes all markets, but if you just want a healthy return over a longer period of time then the second argument is correct.
Ok, yeah you can niche down or specialize but then this article should make a stronger qualifying statement then.
This is what private equity and hostile takeovers are about, no? Identifying companies where management has sacrificed efficiency for "calm" and either rigging them for better returns or returning their capital to the pool.
Couldn't agree more. It's cool to be profitable, to grow slowly and with intention, to create a good experience for founders, employees, and customers, to build something that lasts.
The grow-fast-or-die-trying approach that Silicon Valley (and YCombinator) promoted in tech world the last quarter century leads to millions of miserable folks (employees, customers, and founders) and a few very rich ones. After trying that approach for a long time, it just doesn't bring me motivation or joy.
The grow-fast-or-die-trying approach that Silicon Valley (and YCombinator) promoted in tech world the last quarter century leads to millions of miserable folks (employees, customers, and founders) and a few very rich ones. After trying that approach for a long time, it just doesn't bring me motivation or joy.
Fair enough, but the system isn’t set up to optimize for the happiness of founders and employees. It’s set up to maximize returns, which agreed ends up concentrated in a very few rich outcomes.
(btw, big fan of Lost and Founder).
(btw, big fan of Lost and Founder).
due to shareholder primacy, one can no longer seek investors. seek customers instead. this is fine.
Calm companies are not exciting. They’re not inspiring. You won’t do your best work there.
> Calm companies are not exciting. They’re not inspiring. You won’t do your best work there.
Explain more. Also, ensure you're not conflating "calm companies" with "cheap companies" where the owners are focused on spending as little money as possible, including paying people as little money as possible and claim they spend so little in order to "spend responsibly" - those places are depressing and I am curious if there's a way to detect "calm companies" from "cheap companies"
Explain more. Also, ensure you're not conflating "calm companies" with "cheap companies" where the owners are focused on spending as little money as possible, including paying people as little money as possible and claim they spend so little in order to "spend responsibly" - those places are depressing and I am curious if there's a way to detect "calm companies" from "cheap companies"
Several years ago we were acquired by Siemens. They continued to invest in our group and expand it, even through the pandemic, always with an eye on steady, sustainable growth. Of course there are always targets to hit and people feeling pressured to hit them, but nobody is afraid of losing their job or being asked to work overtime. There always has been and continues to be a culture of work life balance; happy and healthy employees are productive and stick around.
I know lots of other people in my industry and in my area who have similarly calm jobs, whether smaller startups or larger, mature companies. Around here, it's the norm, not the exception.
The thing is, you don't hear about those companies in the news. It's the ones who are frantically hiring and firing that get people's attention. Everyone else just quietly goes about their business.