The real problem Zynga has created is summed up nicely is this comment from the OP's blog:
"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%."
I suspect long-term it will be much more than that. Whatever the reality behind the scenes, Zynga has created a new startup narrative to replace the "Google Chef" narrative that was precisely the story that made it possible to hire premium talent willing to risk a few years and hard work on the chance of a big payout. Zynga has quickly and fairly decisively dealt a near death-blow to that idea.
Between Zynga and the stories coming out of the Skype acquisition a few months ago, I expect startups will find it increasingly difficult to trade stock options in lieu of compensation early on.
Unless and until some legal device is created to re-establish that trust, I expect we'll be looking back on this incident in years to come as the moment when startups lost one of the essential strategies to hiring top talent early. Everyone will be skittish over this for quite some time.
"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%."
I suspect long-term it will be much more than that. Whatever the reality behind the scenes, Zynga has created a new startup narrative to replace the "Google Chef" narrative that was precisely the story that made it possible to hire premium talent willing to risk a few years and hard work on the chance of a big payout. Zynga has quickly and fairly decisively dealt a near death-blow to that idea.
Between Zynga and the stories coming out of the Skype acquisition a few months ago, I expect startups will find it increasingly difficult to trade stock options in lieu of compensation early on.
Unless and until some legal device is created to re-establish that trust, I expect we'll be looking back on this incident in years to come as the moment when startups lost one of the essential strategies to hiring top talent early. Everyone will be skittish over this for quite some time.