Zynga executives were especially concerned with not creating a "Google chef" scenario.
That reference relates to Google's 2004 IPO when one of the company's chefs, who was hired in the firm's early days, walked away with $20 million worth of stock after the shares went public.
This really bothers me. It presumes that a chef cannot be a significant contributor to the success of a company. As someone who was there in Google's early days I can tell you from firsthand experience that this is not true. If someone at Zynga actually did say this on the record, they owe Charlie Ayers an apology.
Working at a startup is hard. The hours are long, the stress can be brutal, and there is no guarantee of success. In fact, the odds for a raw startup (which is what Google was when Charlie joined) are very much against you. I have no idea what Google's deal with Charlie was, but typically you take a pay cut for a shot at the brass ring. Charlie didn't make $20M for cooking, he made $20M for taking the risk that the company he was joining would fail and that he could end up five years older, unemployed, and with nothing to show for his trouble.
But it is not Zynga's failure to grasp this basic fact of startup economics that bothers me, it is their singling out of Charlie in particular because he's a chef. As someone who was there in the early days I can tell you that Charlie Ayers contributed more to Google's success that I did, and I was a senior software engineer.
The unfortunate fact of the matter is that people get hungry, and when they do their productivity drops. As a company you have three options: make your employees deal with it themselves (bring sack lunches or go out), provide some basic but uninspiring food (stock the break room with snacks, have the odd pizza delivered), or you can, as Google did, provide them with really good food.
The latter option costs more, but it pays dividends. When the best restaurant in town is the company cafeteria it liberates your employees from having to worry about where their next meal is coming from (literally) and lets them focus on their work. For software engineering in particular, where getting into an uninterrupted mental "flow" is crucial to productivity, free quality food is a huge lever.
Providing quality food to an ever-growing roster of hungry engineers is not an easy task. Charlie and his staff worked harder on a light day than I ever did (or probably ever will). If you doubt me, take a job in a restaurant kitchen some time. Not only that, but the stakes are higher than most people realize. Feeding a few hundred people in a professional setting is not just taking the process of preparing a home-cooked meal and multiplying. If a software engineer screws up, the site goes down. But if a chef screws up, people get sick. In extreme cases, they die.
If I were to point out that no one ever got sick from eating Charlie's food most people would consider than to be damning with faint praise, but that is just a testament to how well Charlie did his job. Not only did he keep us well feed and free from salmonella, he inspired us. When I said that the best restaurant in town was Google's cafeteria that was no exaggeration. Charlies food was outstanding, day in and day out. (It still is. If you're in the Bay Area, do yourself a favor and have a meal at his restaurant.)
But Charlie's contribution to Google's early success went even well beyond that. Charlie was a friend and a cheerleader. Everyone at Google got to know him because everyone went through the lunch line, and Charlie was always there making sure everything was ship-shape. And Charlie got to know us, got to know our individual tastes and preferences, and bent over backwards to accommodate them, but never at the cost of compromising on his principles of making his offerings healthy and sustainable, principles he still adheres to. Being fed by Charlie was a privilege. It was inspiring. It was cool. It kept us going.
Don't tell me Charlie deserved his payday any less than the rest of us.
[UPDATE:] Found a link to the WSJ article that isn't behind a paywall. Just to be clear, I am not taking a position on Zynga's policy. I think renegotiating the compensation of underperforming employees could be a defensible practice (albeit fraught with all manner of peril). What I take issue with is citing Charlie in defense of such a policy. Here's the relevant passage:
Built into that arrangement [stock options] is the chance that ... some very early employees will end up with bigger windfalls than latecomers who contribute more to the company. Many in Silicon Valley cite an early-hired Google Inc. cook whose stock was worth $20 million after the firm's 2004 IPO.
Zynga attempted to avoid such pitfalls. In meetings last year, Zynga executives said they didn't want a "Google chef" situation, said a person with knowledge of the discussions.
So apparently it's not just Zynga casting Charlie as the poster child for the early employee who got more than he deserved. I do not doubt that some early employees end up not pulling their weight. But Charlie Ayers was not one of them.
Thanks for posting this...
I've always believed in judging people by the way they treat the receptionist, the janitor, and the waitress/chef/etc.
At the end of the day, its important to reflect that Zynga is no Google. Not even close. I wouldn't work for them, nor will I buy any stock in their IPO.
Pincus should be ashamed of himself. What an ass. Not only is Zynga no Google, he's barely got a functioning company. 95% YOY drop in profits. wtf. its hard not to root for this guy to lose.
It's not because he's a chef. It's because he's a chef at a technology company. One might also reasonably wonder if the guy who made the first website for a phenomenally successful restaurant group really deserved that kind of a payday.
Also, let's take another look at the supposed numbers. Note that I don't know if Charlie ended up with $20 million or not, but he was employee 53 and left in 2005, less than a year after the IPO. At the time of the IPO, Google's market cap was $30 billion. It peaked during that year at around $90 billion.
So, if his options were at $20 million the day of the IPO, his options would've been a whopping .067% of the company, or .00067 ownership. If they were worth $20 million at the peak of his tenure at Google, it would've been .00022 or .022% of the company.
That actually strikes me as pretty low for an employee 53. If Charlie did clear $20 million, it was because Google got so big (and as noted, he was hardly a minor factor in its success), not because he was given a ridiculous percentage amount of options.
Pincus has violated the basic tenant of start up economics and, thus made start ups vastly more risky for people to join. In short he's just ups the cost of hiring at start ups by 10-15%.
All this to save a few percentage points in his IPO. I've always been a Zynga fan, have friends that work there, but I can't help but hope this asshole move impacts their IPO and hiring capability negatively from here on out.
You're right. It's pretty arrogant to say a chef is any less deserving than the software engineers simply because of his job title.
Pincus, I knew Charlie. Charlie was my neighbor. And Pincus, you're no Charlie.
Pincus is an asshole, plain and simple. Why doesn't he give up some of his options, I'm sure he's got plenty more than any other employees. Isn't this the same guy that told his developers to copy and steal from competitors*. How can you expect anything buy unethical moves from this guy?
In my opinion, and others, this company is super overrated, and over-hyped. I'm not even sure if they contribute anything positive to the society, except "waste of time".
I've seen that Zynga sign for years, wondering what it would be like to work there. Now I know, and it didn't cost me a cent, or my self-respect, or my stock options.
Thanks for the tip on Charlie's restaurant; I'd call that very worth checking out.
I interviewed with Zynga in April earlier this year. Might I have doged a bullet by not being job-offered by them?
Great post. Zynga employees are getting a good look at the character of the people they are working for.
hear, hear! Surely another Charlie is exactly what you should want when startup up. If you can be in a position where an early (and damn important) member can leave with $20m in stock, then isn't that a pretty good state of affairs.
This whole episode and the way it's been put across makes me so angry. It feels like at the minute we just have example after example reinforcing the idea that you have to be an asshole to be a success, and that's a thoroughly depressing thought.
People often underestimate the importance of people who have great skills outside their area of expertise, e.g someone who contributes to team spirit and motivation in a technical team.
I think it's an example of attribution bias extending outside an individual's 'self' to include the 'greater self' of people who are similar to you. I'm willing to bet the Zynga execs have an overly optimistic view on their own contribution to the company's success.
@Anonymous: "you have to be an asshole to be a success"
You can be a success without depriving others (by being "an as***le") of their success. Many people fail to grasp that.
Unfortunately, success is orthogonal to ethics.
"But if a chef screws up, people get sick. In extreme cases, they die."
Of course, the cook had every right to sell his stocks and leave. Who cares about wether he deserved it or not.
Sweet Post, I always feel that each employee of a company should be treated equally! Each employee is as important as the next one!
Not all employees are equal. We don't need to devolve into mushy-mushy, convoluted arguments to justify the "Google chef".
One sentence in the post is all that is needed: "he made $20M for taking the risk that the company he was joining would fail and that he could end up five years older, unemployed, and with nothing to show for his trouble"
He made a bet. It paid out. You don't tell a casino patron that you are going to take some winnings back because other players entered the game later and may end up feeling bad about it.
I am glad someone had the guts to say this. Zynga saying the chef was worthless exposes many things wrong with that company.
All employees are not equal, nor are they massively unequal like the Zynga execs think. The aim is balance, or maybe a normal distribution.
I love the Google chef, and being the main cook for my own startup, I can say that as he said: "A company is as good as the food it serves its employees, because they are their most valuable asset."
Charlie rocked. One of the favorite Google T-shirts I have is the signed Chef Charlie shirt.
I'm just laughing at Zynga. Charlie started the same week I did and he made every day I was at Google better. I looked forward to coming to work early and to staying late in part because the food was always incredible. I'm pretty sure everyone else felt the same way and given a choice between sacrificing a random engineer or Charlie, the votes would have been to keep the chef (hell, we had two founders, we probably could have gotten by with one). If that's how they view their corporate culture, I wish them the best of luck when competitors start prowling around the gates looking to pick off their superstars after they go public. They're gonna need it.
Great article. Charlie's place is now on my list to go to next time I'm in the Bay.
Awesome post, Zynga for all intents and purposes appears to be a very, very shoddy company. And totally agree that Charlie took a risk, and the risk paid off. A chef is a pretty skilled job, too!
This is so American, on so many levels. If you are American, and reading this, it may be like describing water to a fish: the murk a fish swims in is the way water always is, and the murk is invisible.
The contributions that people notice most are those that seem to have most helped the organization achieve success. Very often, the fact that people do not recognize a contribution is because it is a support role, and also in an area in which they are incompetent.
Now one of the marker of Americans is that they over-rate their competence: around 70% of the totally incompetent claim that they perform very well, when independent objective assessments of their competence show the exact opposite. And in these studies, the other things that marks the incompetent is their inability to perceive true competence in others. (By the way, the studies show that this is a North American phenomenon: when these studies are performed in Asia, the results are the opposite: the incompetent recognize their true skill level, and competence in others.)
The contribution that a chef can make, or the cheerful behavior of social and caring service people to empower those people in the organization who are perceived as the true movers and shakers, is immeasurable! I know some very smart people. Incidentally, I have built one national company (in Australia) and one international company (in America), ,and had the pleasure of having world-beating talent to help me.
And the one thing that echoes in my head is that they tell me that, given the chance, they want to work with me again, because of the wonderful camaraderie and sense of fun they were surrounded by, and the astonishing things we achieved together. And the people who were in there earliest, providing the underpinnings of the environment, were the most appreciated.
Now go ask an early Google employee who got a golden payday whether he begrudges the chef. He will be the first to tell you that he deserved every penny!
The Zynga article reeks of social injustice. I suspect this has its roots in the way America lives in social isolation, living in four-wheeled coffins, being ministered to by radio and iPod, not other people. And the fact that the society has been taken over by weaselly bankers and lawyers, who know the cost of everything, and the value of nothing.
I guess Pincus hasn't read Doug's book "i'm feeling lucky." I've been reading it this week and it's clear that Charlie played a significant role in the culture of Google.
We can't avoid these kind of incidents. Who knows when the people are leaving the company.But we can cautiously issue stock option to the new hiring.We can learn lot form Google incident.
Nice article. Thanks. Just one little spelling error:
"Not only did he keep us well feed and free from salmonella..."
Should be fed.
If we want to start deciding who is worth more, well, I've been in two startups and many companies over the past 25 years as a software developer and I suggest most middle managers and quite a few executives make 10 to 100 times what their contributions are worth to the success of the company.
But the real point is about what equity means. Anyone providing angel capital to a startup will tell you that those who provide the money are the ones taking the biggest risk and deserve the greatest share of the success.
When I work for stock options instead of salary, I'm actually investing the equivalent in my salary I would have made elsewhere into the company. That makes me a capital investor. That made Charlie a capital investor. That's equity baby, that's ownership. And because I'm risking my money, I deserve adequate payback for the risk despite what some donk thinks a chef's contribution is worth. These guys should look in the mirror when questioning the value of someone's contribution.
Thank YOU! I'm a former Google cook, and I've recently taken a job as the executive chef at a start-up. When I read the Zynga article, I was highly dissapointed by the disrespect and under-valuation of how chefs help build these companies. I'm striving to create a corporate food program that will rival or top Google's: knowing full well that my food is a benefit to our staff AND a powerful recruiting and retention tool. I'm just as passionate and driven as the other entrepreneurs I work with. I have some equity in my company, and it motivates me to make my kitchen and dining room as impressive and innovative as the rest of our business. If all goes well, and we hit it big, I expect the same rewards as the other folks who joined the same time I did and built this company with me.
Great post. I have to say that, for me, hearing about the food at Google is really the only thing that ever made it sound like a cool place to work.
Glad to see some respect for both cooks and for team players who share in the risk.
Excellent post but let's not carried away putting Google on a pedestel - remember, the Yellow-Badge employees don't even get to ride the bus.
Pincus made a really bad move here. Since he has violated traditional startup-going-IPO behavior, new employees (esp execs) looking to work there will demand higher pay, bigger stock packages, and larger golden parachutes since they know that Zynga isn't a company which follows the traditional startup behavior of rewarding its employees with the options they are initially granted.
Post a Comment