I took the $300k - Boundary

Every so often this blog post makes the rounds on hacker news. I was lucky enough to have been there at the time. I made a different decision back then, and I figured that it would be illuminating to compare my perspective to Tom’s and give some more details about what it was like.

Powerset was always very high profile in the tech press. Accordingly, news of the acquisition broke in TechCrunch before most of the company knew. The article came with a number attached so we could work out a rough idea of what our stock would be worth. The Powerset stock was basically new car money for the rank and file.  Rumors were flying around that there would be a bonus of some sort, but we did not really know what it would be until MS made the actual offers. On bonus day they called us each into a conference room 1 by 1. When I went in it my manager was there along with a Microsoft HR representative. I was given an employment agreement that laid out all the particulars: salary, retention bonus and the payout breakdown, benefits, and new stock grants. I was informed that the package take it or leave it; they were not going to negotiate with us individually.

Tom was right about one thing: they certainly have the process down to a science. Salary was kept very close to what it was at Powerset. Which is to say that it was well below market rate. The retention bonus was one of three different levels, the $300k package was the largest on offer to non-managers. Crucially, the payout breakdown was 30, 50, 20, meaning that Microsoft will probably get a 20% discount on your bonus if you were planning on leaving. Tom was the only person who, at the time, was moonlighting at his own startup. There was a mini-boom of companies that came out of Powerset around the fall of 2007: Serious Business, Crowdflower and of course GitHub. Tom was the only one who kept at his day job while bootstrapping. It was either late July or early August of 2008 when the bonus offers came in. GitHub was already fairly well established and showing great traction: the rails project had moved onto the platform in April of 2008. In that light I can’t imagine it being a difficult decision for him.

For myself and the rest of the Powersetters it was a rather easy decision as well. Most of us had thrown everything we had at Powerset and didn’t have anything else going on. For a number of us, the bonus was a life raft against personal debts racked up while living in San Francisco at a below market salary. So most of us took the deal and went about our business. The timing turned out really well for the Powerset acquisition: September of 2008 marked the crash of the housing market and the bankruptcy of Lehman Brothers. In the bay area it also meant that funding for new startups was all but non-existent and startups that didn’t have significant revenue or traction would find investment on good terms very hard to come by. Honestly, it could not have worked out better for us.

So, I did my time at Microsoft. Eventually I started working on Boundary, which was called fast_ip at the time, on nights and weekends. The plan I had worked out was to quit the day after the second year bonus came in and support my family off of the funds for a number of months while getting a prototype and ultimately funding together for Boundary. Because of that bonus, Boundary didn’t have to take a seed round. We had the latitude necessary to tackle the hard problems with processing the torrential amount of data that a modern network produces, while not being beholden to an investor’s timetable during the early research phases of the business.

After we had a prototype of our technology up and running we met John Vrionis of Lightspeed through contacts in the NoSQL community. He had the vision to see where we were going and the effect that our technology and approach could have on the APM market. The rest, as they say, is history.