7 ms·
As someone who was a 1st engineer of a startup that successfully exited I had what would be considered a good payout. When looking over the course of my career,
by acconrad 8y ago
As someone who was a 1st engineer of a startup that successfully exited I had what would be considered a good payout. When looking over the course of my career, however, it simply made up for the reduced salary I took for the years I worked there. It was a net-neutral outcome to be the 1st engineer at a startup that actually exited for a substantial (8-figure deal) outcome which already puts me in the minority.
So no, its not worth it and hasn't been worth it for some time (I was there nearly a decade ago)...
...financially.
However, what was worth it was the experience I gained. Being the 1st non-founder engineer means you own a whole stack or specialty and you have no one to lean on. You have to figure everything out. Doing so propelled my career immeasurably. Without that experience I'd still likely be a very mediocre engineer. As much as it wasn't a good financial decision it was a great decision in terms of upping my skills, becoming a harder worker, and building a network with VCs and the local engineering community.
I had already worked at the Big 4 prior to switching and I didn't thrive in that environment. The startup ecosystem provided me the opportunity to work hard, network, build skills, and give me the tools & learnings on how to start my own business.
Not everything is about money.
- zapita 8y agoThere is still a financial aspect though: that rapid increase in responsibility and experience most probably translated to higher income at your next jobs. And there is a compounding effect each time you change jobs, so the earlier you were in your career when you worked at a startup, the more you gain from it financially over the course of your career. I think we have selection bias on Hacker News because many of the prominent voices here tend to have high-paying jobs at prestigious tech companies, or at least know that they could get such a job at the snap of a finger. So from that perspective, joining a startup as an early employee is less attractive. For industry insiders who want to work at a startup, it often makes more sense to just raise money and start one yourself. They can do that relatively easily because their insider status vastly increases their chances of raising seed money. For everyone else however... that cushy Google job is not at all guaranteed, and neither is the 500k angel investor check to be a co-founder. So, although being an early employee at a startup is definitely not for everyone... From an outsider’s perspective it can be pretty damn tempting.
- ankit219 8y agoAssuming he is from India, there might not be a translation to a high income job. Salaries in India frequently follow a %age increase in the last role, regardless of the position they are hiring for. There are some exceptions, like the global cos which would pay according to job, and some startups which would have salary bands, but mostly, its about how much can we increase from the last role.
- dahfizz 8y ago> Assuming he is from India, That's kind of a weird assumption to make.
- ankit219 8y agoBased on this. > However, to me, it’s dubious how many startup successes, especially in India, have been great for, say, 20th to 50th engineer at those companies. Swiggys, Olas and Paytms of the country are infamous for not giving good (or any, these days) equity to engineers. I wasnt sure, hence stated the assumption. Did not want it to come across as a prejudice. Apologies if it did.
- yitianjian 8y agoThe article talks specifically about Indian startups, so I think it's a fair assumption
- xondono 8y agoThis. I do hardware (sch/pcb) design in spain, I’m in a lead position in a small company. When I look at what I’ve built, I have experience with technologies that most of my college mates are still mystified with (e.g. DDR4 or x64 architecture). Most electronics in europe are industrial/power electronics, and most engineers spend their days doing what amounts to paperwork. In contrast I’ve had to ship new designs on a biweekly basis to keep things afloat, I’ve had to set up databases to keep track of our parts (something most hardware engineers don’t even understand), I’ve had to write reliable python scripts since our build process depended on it... the list goes on. From my experience interacting with US engineers, you don’t even realize how little some “Engineers” in the old continent actually know.
- tabtab 8y agoRe: Not everything is about money. Blasphemy! :-)
- vtange 8y agoBut you could arguably get the same result working for a larger company, getting paid market rate for a 9-to-5, and putting in a few more hours at home working on open source or managing a solo side project from scratch. You might even end up with a side project that earns you passive income in the end if you're lucky, but you had to be lucky to get a "break-even" payout from startup-life anyways as you have said.
- kelnos 8y agoI don't agree that an open source project an stand in for the specific type of experience you can get working at a startup. Source: while taking a stint in engineering project/product management, I was a core developer on a popular open source project for 5 years.
- fizwhiz 8y agoWhat's the Big 4 in this context? Generally that term applies to accounting firms (PWC, E&Y etc.)
- rekwah 8y agoGoogle, Amazon, Facebook, or Apple. https://en.wikipedia.org/wiki/Big_Four_tech_companies https://en.wikipedia.org/wiki/Big_Four_tech_companies
- isimluk 8y agoibm, microsoft, dell, hp
- deleted 8y ago[deleted]
- orky56 8y agoUsually FAANG pre-Netflix
- subscope 8y agoApple, Amazon, Facebook, Google.
- CalChris 8y agoThat used to be The Big 8 and people knew of them as The Big 8, even me. I think that The Big 4 is used now with a tinge of irony. Arthur Andersen. Coopers and Lybrand. Deloitte Haskins and Sells. Ernst and Whinney. Peat Marwick Mitchell. Price Waterhouse. Touche Ross. Arthur Young.
- Kinnard 8y agoRate-of-learning: the most valuable startup compensation: https://kyletibbitts.com/rate-of-learning-the-most-valuable-startup-compensation-56dddc17fa42 https://kyletibbitts.com/rate-of-learning-the-most-valuable-... https://news.ycombinator.com/item?id=13575706 https://news.ycombinator.com/item?id=13575706
- everdev 8y ago> I had what would be considered a good payout. When looking over the course of my career, however, it simply made up for the reduced salary I took for the years I worked there. This is such an important point for people to know when they're joining startups. You're basically investing in the startup. If you're going to be an investor it's good to know what your alternative investments are. If you put $50k in the stock market every year for 5 years @ avg. 8% return, your have ~$400k. Over 10 years it's ~$900k. At 1% equity (after dilution) you'll need a ~40-90M exit to reach those goals. Given that your taxable event will be bigger, it's probably more like a $60-120M exit to break even if you're considering a $50k/year pay cut in return for equity. Both the market and startups have risks. But if the upside of investing in a startup won't reasonably beat the market then you're essentially taking a pay cut.
- kenneth 8y agoAn exit would usually be considered long-term capital gains under the tax code, which luckily tops out at 20% (+ state income tax)
- ojn 8y agoOnly if you joined early enough that doing early exercise of stock options is financially viable.
- hedora 8y agoIn CA the max marginal rates are close to 40% for long term capital gains and 51% for short term / income tax.
- sk5t 8y agoIf you exit by cashless exercise of options, it's (usually) then blasted by the full effect of wage/income tax.
- maxxxxx 8y ago“If you put $50k in the stock market every year for 5 years @ avg. 8% return, your have ~$400k. Over 10 years it's ~$900k.” That’s not always the case. Stock market returns are not guaranteed. If you start in the wrong decade you may be losing money.
- alexcnwy 8y agoexperience earned IS a financial investment because it increases your future earning power. whether the increase in the expected present value of your future earnings justifies the present-day lower salary is a question of magnitudes and probabilities
- ChuckMcM 8y agoNot everything is about money. +100 to this sentiment. It has never made sense to work at a startup to "get rich" it has always made sense (and will continue to make sense) to work at a startup in order to expand your personal skill set and to take on different challenges. In the Bay Area, and I recognize that this may be completely different elsewhere, when you work at a startup it is often difficult to "hide" if you are under performing, and it is easier to "shine" when you put in the extra effort. It is also generally a place where engineers can try on more marketing roles and vice versa. Moving from "management" to "individual contributor" is often more fluid, and the variety of technologies you are exposed too can be quite diverse. Start ups are generally less 'snobbish' about which college you graduated from or even if you graduated from college, concerned more with results and less with appearance. Turn over (people coming and going) is generally higher so you end up knowing people at more companies which builds a "network" when you decide you want to work somewhere else. For new engineers I typically advise them to find 'mid-stride' startups, generally something that as locked down a Series A or Series B round so there is "real money" and they can generally make a near market rate base salary. And I advise them to go in with the attitude that they are using the startup to expand their skill set and increase their exposure to various roles. Generally its a great way to launch into your second (or third) job.
- sanderjd 8y agoFWIW: I kind of feel the opposite. Or at least I think the experience is a real trade-off. The skills I gained as a first employee at a startup were more along the lines of business and marketing. The engineering skills required were pretty trivial: manage a small Heroku setup, write early backend and frontend app boilerplate, spin up an initial db schema, integrate CSS from a contract designer, work on email templates, set up analytics, etc. Most startups never get big enough to start hitting the really tough challenges. On the other side of the coin, when I joined a big four company, I was immediately dropped onto a team with the challenges that come with huge scale and have grown more from that experience. I may have a skewed perspective because I already learned most of the skills I exercised as a first employee by being an early member of a team at an established small company, but I think even so the point stands; I was able to grow similarly with a bit more pay and a lot more stability without being at a startup. You're right about meeting investors though, but I'd argue that having a network of investors is not (or at least should not be) a requirement to be a software professional.
- autotune 8y agoThe more interesting skills someone learns when implementing Heroku is when they learn it doesn't scale and the challenges in migrating off of it.
- davidjnelson 8y agohaha! sadly true. I really wish they had the equivalent of aurora serverless.
- autotune 8y agoEven if they did whichever startups that end up using it would have to get a few more funding rounds :)
- davidjnelson 8y agoYou mean heroku because of the excessive cost of over-provisioning their db plans to support traffic spikes with new products?
- malignsoul 8y agoI totally agree. The money was bad really really bad and so was dealing with the some of the owners. But what I learnt in full stack development even though it was just C# and SQL help a lot!
- golemiprague 8y agoYou got to add also the networking effect, when you work for a startup you tend to meet more people from other companies whether other startups or higher up people in regular companies that interact with your startup. That helped me a lot during my career. I have worked in all kind of environments and still prefer the startup environment even as an employee but usually I try to get there early enough to have some substantial shares. The only difference is that when I was young I couldn't care less about hours and now I pick startups where the culture is not so crazy in terms of working hours. It is just much more fun and flexible than a big company and I am willing to take the salary cut for the lifestyle. I spend much more my time with my kids than most people I know who are working for big corporates.
- loriverkutya 8y agoAnd what about life-work balance? Because not everything is about work.