I often wonder exactly what the pathway is to a company growing in response to a huge influx of cash.
It seems like a company could simply not let itself be transformed, but it never happens.
Why not? Is it in the nature of people who run companies that they can’t constrain themselves from 10x-ing the staff? Are there Men in Black type folks who show up and start threatening you if you don’t try to grow the company?
For most small companies that break big, they want to use the new resource to make more stuff, because most of these types of companies are in creative industries. Then when those things aren’t also breakout successes, they get saddled with extra staff and costs and spend up in the machine.
So they want to implement their pie in the sky dreams? But they’re less careful about market fit than they were with the first project?
Or maybe they expand their staff to shoot for the bigger goal, and the expansion is too fast and the new team can’t execute as well as the previous team?
Generally that’s true but there are outliers. Valve for example continues to rake it in while not turning immensely shitty. (Not saying they aren’t without issue, but they are vastly better than many others in the industry)
Similarly, the route that Hello Games took. They started off with an unfinished product rushed to market, but took the money made and invested back into NMS, continuing to release big free expansions to this day.
I think a big part is “don’t go public.” As soon as you go public, your dedication is no longer to your product / your customers, but to quarterly growth / gains for shareholders
I wonder if there are other forces analogous to that public stock commitment, even with private stock. When I’ve been in startup circles, I’ve met people who are “money experts” who have like zero conception of what quality is, or even the joy of work. It’s like a blind spot in their mind.
What I want to know is how do these people worm their way into positions of control? Is it a CEO getting invited to rich people dinners and they slowly get talked into what they “have to” do now that they’ve got big money? “Oh you’ve got to hire Dave he’ll help you navigate this money thing” and then Dave is soulless ghoul?
I would imagine it’s very common. “Serial entrepreneurs”, angel investors and the like are often like sharks but their blood is maximum ROI with minimum turnaround time, and I believe they do their best to get people into leadership positions who’s greatest goal is to exit as early as possible based on some minimum ROI, whether that exit be by acquisition or IPO. Especially if the original startup founder is more focused on the product. “Hey man, you focus on the code, let me and Dave handle the business side of things, we’ll keep the sharks off your back” when usually they themselves, are in fact the sharks
This makes me think there are (at least) two kinds of naïveté. One is about business and money. That’s the kind that people know they have. They think “Oh I do need this shark on my team because I’m not savvy enough”, because they think of themselves as naive.
But there’s also naivete about the nature of quality and morale. There are limits to how far one can get from “the tao”, ie their passion, ie the pursuit of beautiful quality, and still maintain contact with it.
I would say the sharks are even more naive about this (maybe?), and it’s on the founder to discover this for their self and to protect it. Like, it’s definitely not a childish thing, but a transition to adulthood to understand and take responsibility for the spirit of their company.
One must be ruthless about that.
I’m not really sure what I’m trying to say. Maybe that the ruthlessness of the sharks is what is needed, but not in service of the sharks’ usual goal of maximum ROI. One must be ruthless in ensuring they keep their eye on whatever X they originally set out to create.
I mean generally I think it’s cause the people who start these more creative focused companies like video games have a bunch of things they want to do but can’t because of money. But when they get lots of money suddenly they’re able to do all these cool ideas and hire the staff to make them happy. Then just naturally as companies get bigger they become harder to manage and the CEO who probably was just wanting to do creative stuff now is managing stuff instead so a new CEO comes in and that’s when things start to become more profit focused and start to go bad. Or just when the original owners get greedy and take it public to try and make even more money.
Windfalls like this cannot be taking lightly and need to be approached strategically. It depends heavily on tax laws and employee finances overall.
Some common got rich quick concerns off the top of my head: Could accidentally knock people into a higher tax bracket and ruin their finances long term for short term gain. Could accidentally give someone collateral to take out a massive loan they cannot afford long term. Could make someone in a low income area a target before they have a chance to move out. Could accidentally get double taxed by doing the payout incorrectly because they’re not practiced with handling this much money. Could overinvest it all back into the company and burn too brightly negating all their success. Doing nothing and simply using it as cash reserves is better than making a foolish mistake and ruining it for themselves.
Could accidentally knock people into a higher tax bracket and ruin their finances long term for short term gain.
This makes zero sense. Read up on how tax brackets actually work. Hitting higher tax brackets doesn’t mean your existing income is taxed at the higher rate. No “ruining.”
Could accidentally give someone collateral to take out a massive loan they cannot afford long term.
Wtf is this paternalistic BS. They could buy drugs or guns too!! 😱
Doing nothing and simply using it as cash reserves is better than making a foolish mistake and ruining it for themselves.
Could accidentally give someone collateral to take out a massive loan they cannot afford long term.
Wtf is this paternalistic BS. They could buy drugs or guns too!! 😱
“Paying people more would be irresponsible of us. The poors would be burdened with the responsibility of having too much money! It would destroy them!”
with the responsibility of having too much money! It would destroy them!
It often does, seen it firsthand. Hell, I doubled my income and benefits from last job to current. Did not manage it well, wasn’t prepared, fucked up my credit (though I always pay on time!), never learned about dealing with money.
Also, are you suggesting a Japanese company of software devs are “poors”?! Don’t even know how to reply…
This whole thread cements my view that lemmings are a bunch of teens and 20-somethings that have little real-world experience and are angry at what their generation is waking up to. (And you SHOULD be angry. But FFS, take a deep breath, take a wider, longer view.)
This whole thread cements my view that lemmings are a bunch of teens and 20-somethings that have little real-world experience and are angry at what their generation is waking up to.
Yes dear, everyone that disagrees with you is just an angry child. 🙄
Posting US tax code like it’s the only country in the world and using it as a basis to say something about a Japanese company could be construed as ludicrous, could it not?
And you choose drugs or guns for your example? Again, JAPAN.
Japanese bonuses are heavily taxed and highest salary periods can have big implications on how much one has to pay into the national pension system. The way taxes are paid in arrears can also very easily put people in difficult positions if they aren’t financially responsible and happen to suddenly lose their jobs.
Still doesn’t matter if something is “heavily taxed” because regardless of how much tax, you’ll never own more in taxes than you made. So if you got a 10,000 bonus and it was heavily taxed at 60 percent, you don’t somehow have to pay like 15,000 in taxes or something on it. You pay 60% of 10,000, leaving you with 4,000 left over. This is typically done before you even see the money, if not ensure that you keep funds aside to pay for the tax.
Also looking briefly at Japan, it appears that their income tax is a bracket based system similar to the US. So again, even if you go up a bracket, you’ll never own more taxes than you make. Honestly, people need to stop thinking in brackets when it comes to taxes, all you need to worry about is your “effective tax rate.” That’s it, you don’t need to worry that your income pushed you into a 29% tax bracket or whatever. All that matters is your effective tax rate is 24.2% or whatever. You’ll never own more money because you “moved” into a higher bracket, because that’s not how that works.
No tax system in the world taxes all your income after you reach a higher tax bracket. It’s always “all the money above X amount is taxed higher”. Even if that would somehow be the case, they got so much cash, you don’t even realize how insignificant any type of tax is. They are set for life. They have like a 3 person gaming studio.
In the us, there are very rare cases where someone’s income straddles the line between benefits with a higher value than the increased income. This is not one of those cases, and it effectively only applies to people are below the poverty line and gain only a few hundred dollars in income.
It often works that way. Look at lottery winners and NFL players who end up broke as fuck overnight.
Anecdote: Knew a guy who scored a cool $1,000,000 off the VA for a testicular cancer misdiagnosis. Somehow blew every penny in 12-months, lost it all, ended up worse off. And promptly died.
This’ll trip everyone up. Paying more does not lead to better outcomes. Y’all should love it. If you read between the lines, there’s a lot of Linux culture in there. Explains much of what I’ve seen IRL.
“Lottery Winners and NFL Players” You mean it works that way often for the 1% of the 1%? Wtf are you even saying? Are you a bot or is chatGPT writing this for you? You don’t think that paying more to the 80% of Americans that live PAYCHECK TO PAYCHECK is going to be a good thing for them? Do you really think that not fearing homelessness is actually gonna make them sadder? Lol.
I hope you’re trolling and not really so sadly blind to the reality world you live in.
This isn’t a lottery amount of money from the bonus. They aren’t going to be targeted for their bonus that’s in the bank. Plus the og comment didn’t mention this, making it still a wrong take.
Woah, do you actually believe earning more means you’ll be taxed cruelly? Actually, you are only taxed more on the income FROM that bracket. Not all income the same
OK y’all, fine, OP’s higher tax bracket take is off target. But if you’re suggesting sudden and massive wealth increases for these employees? Yeah, that’s kinda fraught.
OP makes some discussion worthy points. And I agree, sit on the reserves as cash and think on it. Meanwhile, nothing leads me to believe Pocketpair isn’t doling out fat bonus stacks. They’re private, they’re not advertising compensation and it’s none of your business.
I work for a software dev in America, we get fat bonuses every year, on top of what’s guaranteed, because we keep making more than anticipated.
On top of that, imagine having “developed Palworld” on your resume. Jesus. Golden ticket there.
tl;dr: Most small companies and individuals are not prepared for this sort of success. Sudden influxes of cash must be navigated carefully.
Could he not use the excess profits to pay the employees a massive bonus for the success that they created?
Yes, all a nice retirement fund and they can make the game. Hire some additional people. No need to become a mega corp
I often wonder exactly what the pathway is to a company growing in response to a huge influx of cash.
It seems like a company could simply not let itself be transformed, but it never happens.
Why not? Is it in the nature of people who run companies that they can’t constrain themselves from 10x-ing the staff? Are there Men in Black type folks who show up and start threatening you if you don’t try to grow the company?
For most small companies that break big, they want to use the new resource to make more stuff, because most of these types of companies are in creative industries. Then when those things aren’t also breakout successes, they get saddled with extra staff and costs and spend up in the machine.
So they want to implement their pie in the sky dreams? But they’re less careful about market fit than they were with the first project?
Or maybe they expand their staff to shoot for the bigger goal, and the expansion is too fast and the new team can’t execute as well as the previous team?
Generally that’s true but there are outliers. Valve for example continues to rake it in while not turning immensely shitty. (Not saying they aren’t without issue, but they are vastly better than many others in the industry)
Similarly, the route that Hello Games took. They started off with an unfinished product rushed to market, but took the money made and invested back into NMS, continuing to release big free expansions to this day.
I think a big part is “don’t go public.” As soon as you go public, your dedication is no longer to your product / your customers, but to quarterly growth / gains for shareholders
I wonder if there are other forces analogous to that public stock commitment, even with private stock. When I’ve been in startup circles, I’ve met people who are “money experts” who have like zero conception of what quality is, or even the joy of work. It’s like a blind spot in their mind.
What I want to know is how do these people worm their way into positions of control? Is it a CEO getting invited to rich people dinners and they slowly get talked into what they “have to” do now that they’ve got big money? “Oh you’ve got to hire Dave he’ll help you navigate this money thing” and then Dave is soulless ghoul?
I would imagine it’s very common. “Serial entrepreneurs”, angel investors and the like are often like sharks but their blood is maximum ROI with minimum turnaround time, and I believe they do their best to get people into leadership positions who’s greatest goal is to exit as early as possible based on some minimum ROI, whether that exit be by acquisition or IPO. Especially if the original startup founder is more focused on the product. “Hey man, you focus on the code, let me and Dave handle the business side of things, we’ll keep the sharks off your back” when usually they themselves, are in fact the sharks
This makes me think there are (at least) two kinds of naïveté. One is about business and money. That’s the kind that people know they have. They think “Oh I do need this shark on my team because I’m not savvy enough”, because they think of themselves as naive.
But there’s also naivete about the nature of quality and morale. There are limits to how far one can get from “the tao”, ie their passion, ie the pursuit of beautiful quality, and still maintain contact with it.
I would say the sharks are even more naive about this (maybe?), and it’s on the founder to discover this for their self and to protect it. Like, it’s definitely not a childish thing, but a transition to adulthood to understand and take responsibility for the spirit of their company.
One must be ruthless about that.
I’m not really sure what I’m trying to say. Maybe that the ruthlessness of the sharks is what is needed, but not in service of the sharks’ usual goal of maximum ROI. One must be ruthless in ensuring they keep their eye on whatever X they originally set out to create.
The developer of Minecraft did this. Later, he eventually sold it to Microsoft for like $2 Billion, if I recall correctly.
I mean generally I think it’s cause the people who start these more creative focused companies like video games have a bunch of things they want to do but can’t because of money. But when they get lots of money suddenly they’re able to do all these cool ideas and hire the staff to make them happy. Then just naturally as companies get bigger they become harder to manage and the CEO who probably was just wanting to do creative stuff now is managing stuff instead so a new CEO comes in and that’s when things start to become more profit focused and start to go bad. Or just when the original owners get greedy and take it public to try and make even more money.
Even if they gave every employee a ¥10,000,000 bonus, they would still have ~95% of the money left over.
Okay so make it ¥200,000,000
Then all of the employees would retire and the company falls apart.
10 million yen is only 60k usd, that’s a big bonus but not nearly as staggering as your comment implies.
That more money than the average Japanese person makes in a year, as a bonus. That’s a lot of money.
I’m not familiar, is it a private company or are there public shareholders?
Windfalls like this cannot be taking lightly and need to be approached strategically. It depends heavily on tax laws and employee finances overall.
Some common got rich quick concerns off the top of my head: Could accidentally knock people into a higher tax bracket and ruin their finances long term for short term gain. Could accidentally give someone collateral to take out a massive loan they cannot afford long term. Could make someone in a low income area a target before they have a chance to move out. Could accidentally get double taxed by doing the payout incorrectly because they’re not practiced with handling this much money. Could overinvest it all back into the company and burn too brightly negating all their success. Doing nothing and simply using it as cash reserves is better than making a foolish mistake and ruining it for themselves.
These are all ludicrous.
This makes zero sense. Read up on how tax brackets actually work. Hitting higher tax brackets doesn’t mean your existing income is taxed at the higher rate. No “ruining.”
Wtf is this paternalistic BS. They could buy drugs or guns too!! 😱
Nah. Pay people.
“Paying people more would be irresponsible of us. The poors would be burdened with the responsibility of having too much money! It would destroy them!”
It often does, seen it firsthand. Hell, I doubled my income and benefits from last job to current. Did not manage it well, wasn’t prepared, fucked up my credit (though I always pay on time!), never learned about dealing with money.
Also, are you suggesting a Japanese company of software devs are “poors”?! Don’t even know how to reply…
This whole thread cements my view that lemmings are a bunch of teens and 20-somethings that have little real-world experience and are angry at what their generation is waking up to. (And you SHOULD be angry. But FFS, take a deep breath, take a wider, longer view.)
Yes dear, everyone that disagrees with you is just an angry child. 🙄
Posting US tax code like it’s the only country in the world and using it as a basis to say something about a Japanese company could be construed as ludicrous, could it not?
And you choose drugs or guns for your example? Again, JAPAN.
Japanese bonuses are heavily taxed and highest salary periods can have big implications on how much one has to pay into the national pension system. The way taxes are paid in arrears can also very easily put people in difficult positions if they aren’t financially responsible and happen to suddenly lose their jobs.
Still doesn’t matter if something is “heavily taxed” because regardless of how much tax, you’ll never own more in taxes than you made. So if you got a 10,000 bonus and it was heavily taxed at 60 percent, you don’t somehow have to pay like 15,000 in taxes or something on it. You pay 60% of 10,000, leaving you with 4,000 left over. This is typically done before you even see the money, if not ensure that you keep funds aside to pay for the tax.
Also looking briefly at Japan, it appears that their income tax is a bracket based system similar to the US. So again, even if you go up a bracket, you’ll never own more taxes than you make. Honestly, people need to stop thinking in brackets when it comes to taxes, all you need to worry about is your “effective tax rate.” That’s it, you don’t need to worry that your income pushed you into a 29% tax bracket or whatever. All that matters is your effective tax rate is 24.2% or whatever. You’ll never own more money because you “moved” into a higher bracket, because that’s not how that works.
You said own twice when I believe you meant owe. Otherwise right on.
No tax system in the world taxes all your income after you reach a higher tax bracket. It’s always “all the money above X amount is taxed higher”. Even if that would somehow be the case, they got so much cash, you don’t even realize how insignificant any type of tax is. They are set for life. They have like a 3 person gaming studio.
It doesn’t matter if they tax bonuses 99% , you are still gaining net income
…you can’t ruin finances by knocking some one into a different tax bracket. This statement alone proves you don’t understand how tax brackets work
In the us, there are very rare cases where someone’s income straddles the line between benefits with a higher value than the increased income. This is not one of those cases, and it effectively only applies to people are below the poverty line and gain only a few hundred dollars in income.
Imagine being so brainwashed by your Robber Baron overlords that you literally think: More money = less money. Sad.
It often works that way. Look at lottery winners and NFL players who end up broke as fuck overnight.
Anecdote: Knew a guy who scored a cool $1,000,000 off the VA for a testicular cancer misdiagnosis. Somehow blew every penny in 12-months, lost it all, ended up worse off. And promptly died.
This’ll trip everyone up. Paying more does not lead to better outcomes. Y’all should love it. If you read between the lines, there’s a lot of Linux culture in there. Explains much of what I’ve seen IRL.
https://www.youtube.com/watch?v=u6XAPnuFjJc&t=1s
“Lottery Winners and NFL Players” You mean it works that way often for the 1% of the 1%? Wtf are you even saying? Are you a bot or is chatGPT writing this for you? You don’t think that paying more to the 80% of Americans that live PAYCHECK TO PAYCHECK is going to be a good thing for them? Do you really think that not fearing homelessness is actually gonna make them sadder? Lol.
I hope you’re trolling and not really so sadly blind to the reality world you live in.
This is probably the most ridiculous comment I’ll read on Lemmy all year and it’s only March. Wow.
Bro said the most wrong thing I’ve seen all week and won’t respond.
What if you have too much money and you become a target?
Well that’s on you for letting people know about if.
This isn’t a lottery amount of money from the bonus. They aren’t going to be targeted for their bonus that’s in the bank. Plus the og comment didn’t mention this, making it still a wrong take.
Shame is a powerful motivator for behavior change. It’s also a shame we don’t use it anymore and instead hide behind computer screens.
Woah, do you actually believe earning more means you’ll be taxed cruelly? Actually, you are only taxed more on the income FROM that bracket. Not all income the same
Lmfao
Could end up calibrating someone’s “earning potential” super high for the sake of calculating child support.
But couldn’t most of these be avoided by structuring the bonus as some sort of annuity?
OK y’all, fine, OP’s higher tax bracket take is off target. But if you’re suggesting sudden and massive wealth increases for these employees? Yeah, that’s kinda fraught.
https://old.reddit.com/r/AskReddit/comments/24vo34/whats_the_happiest_5word_sentence_you_could_hear/chb38xf/
OP makes some discussion worthy points. And I agree, sit on the reserves as cash and think on it. Meanwhile, nothing leads me to believe Pocketpair isn’t doling out fat bonus stacks. They’re private, they’re not advertising compensation and it’s none of your business.
I work for a software dev in America, we get fat bonuses every year, on top of what’s guaranteed, because we keep making more than anticipated.
On top of that, imagine having “developed Palworld” on your resume. Jesus. Golden ticket there.
tl;dr: Most small companies and individuals are not prepared for this sort of success. Sudden influxes of cash must be navigated carefully.