Money as MacGuffin
Money can change things. Playing the Tech Lottery Game. World's smallest violin.
We all work for money. But no one talks about money. It’s pretty much a black box. And people are curious about startups and money. So I thought I’d start.
First, some context. Over my work life I’ve pretty much always worked for technology companies. My first desk job was writing about the stock market for an online portal in the late 1990s (kids: ask your parents). Then I worked for three companies adapting their business to the Internet in different industries: travel and human relationships and advertising. My job in all three was to help these companies deal with the changes coming from the Internet and to help them capitalize on new opportunities.
I founded and ran my own startup and tried to make it work for 6 years. That didn’t take off and left me with some very valuable lessons and some annoying personal debts. Perhaps even in equal measures. So I worked in software to put my lessons to use and pay off my personal debts.
I’m taking you down this memory lane to say that I’ve always been pretty lucky to be pretty well paid, but that my pay was never typical. I had a salary and I had variable compensation (mostly stock options). I understood that the salary was to take care of daily expenses and the variable compensation was like lottery tickets — maybe highly valuable, far more likely worth nothing.
So I only really knew that two-part model of getting paid: salary plus options. And as I learned, especially with my own startup, the real upside could only happen in a place that really took off. When that lottery ticket got you a seat at a company that became a rocket ship. Let’s call this model of compensation the Tech Lottery Game.
Money Questions I’ll Avoid
The first thing that some people wonder but never get around to asking: How much money did we make from Slack?
Well, shoot, friend. That’s not something I’m going to spell out for you here. Sure we’re close after all these chapters, but we’re not that close. Sorry! It’s private to me and my family.
And really, what am I going to say? There’s no upside.
If it’s an amount you think is too much for someone to have, I might then be a rich and greedy asshole who should be doing more with their overweighted resources. And I probably should! If it’s less than you imagined I had earned, then maybe you think I should have done better. What a shmuck! Maybe you would have. And you probably would!
So maybe skip the rest of this chapter if a simple answer is all you were seeking. Math is just one way of describing the world, after all.
But if you’re still reading, here’s an invitation to think beyond the simple answer of a number because I think there’s so many more interesting topics around money to dig into, like playing the game.
Playing the Tech Lottery Game
You know the funny thing? At first, I didn’t realize that my work compensation was odd. It was the only model I knew: salary and options. Maybe some annual bonus mixed in. But that was it.
And I was pretty clueless about how to play to the Tech Lottery Game. I certainly didn’t rigorously analyze what companies might become rocket ships. I didn’t have any 5-factor ratings matrices. I took what I got.
But like any game, the more I played, the better I had a chance to get. And after I did my own startup, I inched along the gradient towards more mercenary, away from more missionary.
I started to think of the places I could work through the lens of the Tech Lottery Game. I had been trained to do so. That lens said, basically: make sure the cash situation all works and keeps everything going while really staying focused on the bigger picture, longer term value — options and ownership. That was the source of big value. And, since I was competitive and liked to win, and that was how the game got played, that’s how I started to play.
And I’m not alone. Pretty much everyone who works in tech is playing this game in SF, whether they admit it or not. Many fewer are playing it in a smaller place like Vancouver. It’s conservative and on the margin. Your parents and peers aren’t impressed by options. SF has way more reps at the game, a more mature understanding of payoffs and, as a result, a much more risk tolerant culture. Plus there are just way more options to compare.
So then the key question to play the game well becomes: what companies will be rocket ships?
When Slack came along, even if my first introduction was far before its first product in market and any success at all, I recognized it was a different proposition. How? The team, first of all. Their talent and capabilities and cohesion. Then their track record.
It was so different from what I’d experienced elsewhere it felt like I had almost been playing the wrong game. It was deeply different and that was why I was so keen to belong. Not for the money. For the chance to play the game at the highest level. I recognized the truth to the well-trod quote from Eric Schmidt to Sheryl Sandberg: “If you’re offered a seat on a rocket ship, don’t ask what seat. Just get on.”
But beyond picking the winners, what else can you look for to set yourself up to play well? Top teammates is #1. Another strong signal is top investors and an ability to raise money (or not need to raise money) that aligns with the company trajectory.
Then, what does the capitalization table look like? That’s the real code for the ownership of the company. I’m no expert on cap tables but I know a bit. Lift the hood on that spreadsheet and you can see so much. Here’s what I might watch for if I was looking.
How many shares are there in the company? This will tell you what percentage of ownership your share options are proportionally.
Who holds the shares? This will depend on the stage of maturity of the company. With maturity, the shares will tend to move from the company treasury to its stakeholders — mostly investors and employees.
What are the liquidation preferences? This is how any sale of the company pays out its stakeholders, and the order of that process.
In general, I’d look for a simple and clean cap table that I could easily understand. One class of shares is far better as a employee to multiple classes or preferred shares whose holders get paid first. Any rachet or bonus / penalization clauses can be red flags.
Basically, what you’re seeing in the cap table and in the share structure are a reflection of power and control of the company. When a company needs investors’ money, those investors can force concessions on the company. When a company can choose its investors, it can make a much better deal for itself and its employees.
But your mileage may vary with all of this. You might know way more than me. You might not care at all about this. You might be well versed on vesting schedules and insider restrictions and tag-along, drag-along rights. Let me know if I got anything wrong here!
In 2020, I held stock in two companies that got acquired. Slack got acquired by Salesforce and Mobify (the company I worked at prior to Slack) got acquired by Salesforce. And though the acquirer of both companies was the same, the outcome was not. Slack was a $27.7-billion company with a clean cap table. Mobify was a snarl of a cap table with various liquidation preferences, squabbling shareholders and a few lawsuits.
And while that comparative experience certainly drove home for me how a similar outcome can have very different results, it’s a very limited sample size. What I’ve covered above are some basics I found helpful in the handful of places I’ve worked. The Tech Lottery Game is very complex. As an employee you may also play it a few times in your career.
Others in the game will have played dozens or hundreds of times. They will know the game very well. They will be deeply invested in the rules of the game.
Expect that the lawyers and bankers and investors and entrepreneurs will all know the game better than you. Find good folks you can trust and use their expertise to learn as much as you can. I hope that being knowledgeable about some basics of the game help you. They helped me.
World’s Smallest Violin
All the questions above, the requirement to understand the Tech Lottery Game and beyond, these are champagne problems, a terrific expression I learned from Bob Frati years before Taylor Swift sang about them. I’ll certainly take them and I’m certainly incredibly lucky to have them.
But you want to know something strange?
Growing up I always imagined I’d be someone who made a lot of money. I don’t know why, but I did. I didn’t know how I’d make any money (astronaut! hockey player!), but the idea held a powerful attraction for me, and I had no doubt it would come true.
My dad sold life insurance and my mom was a nurse. We were very middle class, in the suburbs, with a yard that backed onto a field. I had no reason to believe it, but I remember well a sense of certainty that I’d never had to worry about money at some stage in my life.
Maybe ever kid believes this?
Now many people are millionaires. I don’t mean this glibly. I mean it literally. In estimates, Wikipedia tells me there are 2,291,000 millionaires just in Canada. There are 24,480,000 millionaires in the US and 56-million globally. But those numbers are the easy part of talking about money.
The hardest part is still trying to answer the question of what makes a meaningful and fulfilling life. Money doesn’t answer that question for you. But it can provide the time, freedom and perspective to push on different options: family life, volunteering, community service, helping people, learning and travelling.
And most importantly, for me it has meant more chance to work on the relationships I have with people I care about. That’s by far the biggest luxury.
Money as MacGuffin
In fiction, a MacGuffin (sometimes McGuffin) is an object, device, or event that is necessary to the plot and the motivation of the characters, but insignificant, unimportant, or irrelevant in itself. The term was originated by Angus MacPhail for film, adopted by Alfred Hitchcock, and later extended to a similar device in other fiction.
In technology startups money is the MacGuffin. It’s the thing we’re each meant to be on our individual quests to achieve. It’s our dragon-guarded treasure hoard. It’s the pot of gold at the end of the rainbow. It’s our holy grail.
Except. It’s not.
Sure, you may know you’re playing the Tech Lottery Game and it may definitely influence your decisions. But when you’re immersed in the quest, it’s not the point of the quest. And it’s not the payoff for the quest once you’ve reached the goal.
Do you believe that?
Maybe. Maybe you believe me. Maybe you don’t. Maybe I should be suspicious of myself and these assertions. It’s all pretty self serving to preserve my sense of being a normal Joe.
But as clearly as I can recall, in my experience at Slack and before, I never felt like I was on a quest seeking money. Yes, we were playing the Tech Lottery Game. Money could be a payoff for the risk of joining a startup, for our long hours and hard work and going above and beyond to try to make the thing take off like a rocket ship. We even stepped out of the day-to-day at times and it seemed like money could be in our future. It felt like a gauzy dream to glimpse on occasion. But it never acted as the motivator for any of those days.
The best motivator for the day-to-day work proved to be people — mostly teammates and customers. I wanted to do my best work for inspiring teammates who I saw also doing their best. I wanted to help our customers understand and then achieve the promise of what our product could do for them. I wanted to put my name on every job I did.
Showing up and doing our best, each day, made the work wonderful and worth doing. I’m not original in saying this. David Foster Wallace puts it this way in The Pale King:
Gentlemen, welcome to the world of reality—there is no audience. No one to applaud, to admire. No one to see you. Do you understand? Here is the truth—actual heroism receives no ovation, entertains no one. No one queues up to see it. No one is interested. True heroism is minutes, hours, weeks, year upon year of the quiet, precise, judicious exercise of probity and care—with no one there to see and cheer. This is the world.
I’m just lucky enough to have found a place that valued this approach, teammates who believed in it and a collection of people that put it into practice for my 7 years there (and beyond). I got to play the game at the highest levels.
We got paid and many of us did very well — far better than we had anticipated or expected at any stage of the journey. It was both a job and it was more. As I reflect on it all the words I return to are: What a lucky life.
But it’s over now. Like this story. That’s it. I hope you’ve enjoyed it. I hope it’s entertained you and given you new perspective. Maybe even one or two things you can find useful for your own life.
It’s been my pleasure to think about it and write it and narrate it. Thank you for coming along for the ride.
— JS, March 18, 2026
PS: Here’s my final request of your time. If you haven’t yet, please take 1 minute and tell me what you’d like to see next from A Slack Story. Thank you!