6 ms·

The Ideal Startup Career Path

55 points by dwynings 17y ago

mrshoe 17y ago
Some info based on my experience in startup land: It's pretty standard for (non-executive) startup employees to receive about 0.25% equity in the company. That equity usually vests over 4 years. This is true even for very early employees. So, if your startup is acquired by Google for $20MM, which is a pretty favorable outcome, you get $50k. Considering the vesting, that's less than $13k per year. If you instead went to work for a Big Company, heaven forbid, the difference in your salary and bonus would probably more than make up for that equity. The far more common outcome, of course, is that your equity is worth nothing. The incredibly uncommon outcome is that your 0.25% is worth a million dollars or more. In almost all cases (these days, at least), the only people to win big in the startup lottery are the founders and the VCs. That said, founding a company is very risky and difficult, and there's a high probability of failure. Previous startup experience can go a long way to increase your odds of success if you ever do decide to found your own. It's much easier to learn all the hard lessons while building someone else's company. Then you can take that knowledge and swing for the fences yourself.
- akeefer 17y ago
  To expand on your last point there: if you do work for a startup, pay attention to everything, and learn from all the things that get done well and all the things that don't. There's a lot to learn and a lot to screw up. For example: Did you hire well? Did you grow the team too slowly or too quickly? Did your development process work well? Did it adapt as your product and team matured? Was the management transparent in the right ways? If the company grew, how did it handle the addition of new employees, new customers to support, and new or larger product offerings? How was your employee retention and burnout? And so on . . . There are invaluable lessons that you can really only learn by going through those things, and you can still learn them (and perhaps even be more objective about it) when you're not a founder. And if your startup isn't transparent enough that you can learn those sorts of lessons, you should consider that a major strike against it.
  - nostrademons 17y ago
    > you can still learn them (and perhaps even be more objective about it) when you're not a founder. I wonder, sometimes, how true that is. I went into the startup world for exactly that reason: I wanted to start my own company eventually, knew that I didn't have the knowledge or experience to do it immediately, so I figured I'd learn the ropes on somebody else's dime. I picked companies that would give me a lot of responsibility, and ones where I could directly observe what the founders did and why they did it. And I took careful mental notes whenever something worked well or didn't work well, and resolved to do the same thing (or not do it) when I started my own company. And then I actually did start my own company, and found that I made nearly every mistake that my old bosses had made, I just made them in new ways, and stopped making them a little quicker. I found there're three main problems with the "learn how to start your own company by working at someone else's company" school of thought: 1.) There are many more ways to fail than there are to succeed. Therefore, if you pick any random strategy out of a random company, and you don't yet know whether the company is failing or succeeding, it's probably a failing strategy. Orson Scott Card once said, "There are a million wrong ways to tell a story, and a thousand right ways." That's probably true of entrepreneurship too, just multiply the numbers by a few orders of magnitude. 2.) If you haven't yet worked at a successful company, you probably don't know how to tell the difference between a successful strategy and a failing one. A lot of the things I respected most about my past employers turned out to be mistakes. For example, one of them was big on code ownership, and seeing how hard coders worked at getting their code running, I thought it was a great way to encourage people to take pride in the code they produce. Another was building a platform for financial apps, and I thought they were geniuses for their strategic insight - after all, they get recurring revenue and their customers can't easily switch away. It was only after I tried building a platform myself that this reached the top of the list for "things startups should never do" - and given the number of YC startups that get funded with their own webapp platforms, I guess lots of other founders haven't yet learned that either. 3.) Many times mistakes don't look like mistakes, because the circumstances that surround them are different. Very occasionally, they aren't mistakes, because the circumstances that surround them are different. For example, while I was building my platform to create casual games, I thought I'd sidestep all the complexity & adoption problems my financial employer had faced, because I was purposely limiting the scope of my platform to games and wasn't trying to have it do everything. I found that no, the platform part really was the problem, and no matter how much I polished it up, that approach just didn't work.
- holygoat 17y ago
  This, in a nutshell, is why I have turned down every offer so far to leave my corp job (attained through acquisition, amusingly) for a startup. The equity offered was simply inadequate to make up for the massive increase in effort required. Plot the compensation over time, and I'm much better off now, especially considering the other things I've been able to accomplish while not being on a 90-hour week startup deathmarch.
phsr 17y ago
I work at a big corporation now, but have recently considered the idea of founding/working for a startup. The more I read into articles like this, the more I lean towards the startup world. I have job security right now (I've made myself valuable as the software guy in a hardware testing department) but my job leaves me unfulfilled. The startup world seems much more exciting and the opportunities for growth seem endless. I thought they way I would get into startups would be by founding my own, but this article highlights the benefits of working for a startup before potentially starting one
- notauser 17y ago
  I was working for a big corporate when I had a start up idea. The route I took was to jump ship to a smallish start up for as long as it would take to feel comfortable (I figured around two years, it actually took a bit longer than a year). There were several good things about doing it that way: - I got a lot closer to customers and the sales/marketing process and saw product development cycles much more akin to the kind of thing I would be doing on my own. - I met a lot of people and made some great connections. - I picked up some related skills and qualifications and contacts (on my own time) which have cut ~£1k+ off my business admin costs and made me more competent technically. - I saved up a nice healthy seed fund at the same time as moving (myself) to a city that's better for start ups. There were some negatives to go with it as well. - I burned out a little bit on the really long days, which made it hard to work in the evenings. Oddly enough that's no longer the case now I'm doing my own thing - it's too much fun. - I couldn't carry on with product development for contract reasons. It did give me time give the product a serious review and to pick up some other skills I would need though. - I lost a year's first mover advantage. It's a big market though, and a year hasn't radically changed the competitive picture. The niche I want to steal is still under-served and stuffed full of people with money. On the whole it was a good idea for me, but everyone's circumstances vary.
Harj 17y ago
For most people I know who join or start companies, the primary goal is not to get rich – it is to work on something they love i began my first startup with the sole motive of getting rich. yes i enjoyed the challenge of a startup and believed the product had potential but the overwhelming motivation was getting rich. it was only after actually doing a startup and realizing how hard it is to get rich through that path, i realized i still wanted to do another startup but that my motivations had changed. the get rich motivation isn't enough 'fuel' to make me go through the stress of another startup. the only motivation that will work now is working on something i'm truly passionate about and enjoy.
sanj 17y ago
What's missing here is the idea that you want to be able to grow with your startup over time. Being solely involved in startups -- especially since most fail -- only lets you see how an organization is run up to the size of the startup. It's the organizational equivalent of the Peter Principle. A larger organization is going to let you see more sizes (since they are typically organized as subunits) and the issues that arise in each size. As examples: 1. Do you know how to manage a team of 3? 10? 50? 2. Do you know how to hire 10 engineers (ie, after you've asked all of your friends)? 3. Do you know how to budget/spend $100k? $1M? $5M? If not, then investors may be less willing to put money into your venture. Gaining those skills, especially the first two, has you situated to more successfully manage growth. I believe that spending some time at a large, successful company can be very beneficial. Disclosure: I recently joined TripAdvisor for just this reason. And I'm hiring into my team, thereby gaining experience in 1, 2 and 3!

55 points by dwynings 17y ago

Some info based on my experience in startup land: It's pretty standard for (non-executive) startup employees to receive about 0.25% equity in the company. That equity usually vests over 4 years. This is true even for very early employees. So, if your startup is acquired by Google for $20MM, which is a pretty favorable outcome, you get $50k. Considering the vesting, that's less than $13k per year. If you instead went to work for a Big Company, heaven forbid, the difference in your salary and bonus would probably more than make up for that equity. The far more common outcome, of course, is that your equity is worth nothing. The incredibly uncommon outcome is that your 0.25% is worth a million dollars or more. In almost all cases (these days, at least), the only people to win big in the startup lottery are the founders and the VCs. That said, founding a company is very risky and difficult, and there's a high probability of failure. Previous startup experience can go a long way to increase your odds of success if you ever do decide to found your own. It's much easier to learn all the hard lessons while building someone else's company. Then you can take that knowledge and swing for the fences yourself.

akeefer 17y ago
To expand on your last point there: if you do work for a startup, pay attention to everything, and learn from all the things that get done well and all the things that don't. There's a lot to learn and a lot to screw up. For example: Did you hire well? Did you grow the team too slowly or too quickly? Did your development process work well? Did it adapt as your product and team matured? Was the management transparent in the right ways? If the company grew, how did it handle the addition of new employees, new customers to support, and new or larger product offerings? How was your employee retention and burnout? And so on . . . There are invaluable lessons that you can really only learn by going through those things, and you can still learn them (and perhaps even be more objective about it) when you're not a founder. And if your startup isn't transparent enough that you can learn those sorts of lessons, you should consider that a major strike against it.
- nostrademons 17y ago
  > you can still learn them (and perhaps even be more objective about it) when you're not a founder. I wonder, sometimes, how true that is. I went into the startup world for exactly that reason: I wanted to start my own company eventually, knew that I didn't have the knowledge or experience to do it immediately, so I figured I'd learn the ropes on somebody else's dime. I picked companies that would give me a lot of responsibility, and ones where I could directly observe what the founders did and why they did it. And I took careful mental notes whenever something worked well or didn't work well, and resolved to do the same thing (or not do it) when I started my own company. And then I actually did start my own company, and found that I made nearly every mistake that my old bosses had made, I just made them in new ways, and stopped making them a little quicker. I found there're three main problems with the "learn how to start your own company by working at someone else's company" school of thought: 1.) There are many more ways to fail than there are to succeed. Therefore, if you pick any random strategy out of a random company, and you don't yet know whether the company is failing or succeeding, it's probably a failing strategy. Orson Scott Card once said, "There are a million wrong ways to tell a story, and a thousand right ways." That's probably true of entrepreneurship too, just multiply the numbers by a few orders of magnitude. 2.) If you haven't yet worked at a successful company, you probably don't know how to tell the difference between a successful strategy and a failing one. A lot of the things I respected most about my past employers turned out to be mistakes. For example, one of them was big on code ownership, and seeing how hard coders worked at getting their code running, I thought it was a great way to encourage people to take pride in the code they produce. Another was building a platform for financial apps, and I thought they were geniuses for their strategic insight - after all, they get recurring revenue and their customers can't easily switch away. It was only after I tried building a platform myself that this reached the top of the list for "things startups should never do" - and given the number of YC startups that get funded with their own webapp platforms, I guess lots of other founders haven't yet learned that either. 3.) Many times mistakes don't look like mistakes, because the circumstances that surround them are different. Very occasionally, they aren't mistakes, because the circumstances that surround them are different. For example, while I was building my platform to create casual games, I thought I'd sidestep all the complexity & adoption problems my financial employer had faced, because I was purposely limiting the scope of my platform to games and wasn't trying to have it do everything. I found that no, the platform part really was the problem, and no matter how much I polished it up, that approach just didn't work.
holygoat 17y ago
This, in a nutshell, is why I have turned down every offer so far to leave my corp job (attained through acquisition, amusingly) for a startup. The equity offered was simply inadequate to make up for the massive increase in effort required. Plot the compensation over time, and I'm much better off now, especially considering the other things I've been able to accomplish while not being on a 90-hour week startup deathmarch.

phsr 17y ago

I work at a big corporation now, but have recently considered the idea of founding/working for a startup. The more I read into articles like this, the more I lean towards the startup world. I have job security right now (I've made myself valuable as the software guy in a hardware testing department) but my job leaves me unfulfilled. The startup world seems much more exciting and the opportunities for growth seem endless. I thought they way I would get into startups would be by founding my own, but this article highlights the benefits of working for a startup before potentially starting one

notauser 17y ago
I was working for a big corporate when I had a start up idea. The route I took was to jump ship to a smallish start up for as long as it would take to feel comfortable (I figured around two years, it actually took a bit longer than a year). There were several good things about doing it that way: - I got a lot closer to customers and the sales/marketing process and saw product development cycles much more akin to the kind of thing I would be doing on my own. - I met a lot of people and made some great connections. - I picked up some related skills and qualifications and contacts (on my own time) which have cut ~£1k+ off my business admin costs and made me more competent technically. - I saved up a nice healthy seed fund at the same time as moving (myself) to a city that's better for start ups. There were some negatives to go with it as well. - I burned out a little bit on the really long days, which made it hard to work in the evenings. Oddly enough that's no longer the case now I'm doing my own thing - it's too much fun. - I couldn't carry on with product development for contract reasons. It did give me time give the product a serious review and to pick up some other skills I would need though. - I lost a year's first mover advantage. It's a big market though, and a year hasn't radically changed the competitive picture. The niche I want to steal is still under-served and stuffed full of people with money. On the whole it was a good idea for me, but everyone's circumstances vary.

Harj 17y ago

For most people I know who join or start companies, the primary goal is not to get rich – it is to work on something they love i began my first startup with the sole motive of getting rich. yes i enjoyed the challenge of a startup and believed the product had potential but the overwhelming motivation was getting rich. it was only after actually doing a startup and realizing how hard it is to get rich through that path, i realized i still wanted to do another startup but that my motivations had changed. the get rich motivation isn't enough 'fuel' to make me go through the stress of another startup. the only motivation that will work now is working on something i'm truly passionate about and enjoy.

sanj 17y ago

What's missing here is the idea that you want to be able to grow with your startup over time. Being solely involved in startups -- especially since most fail -- only lets you see how an organization is run up to the size of the startup. It's the organizational equivalent of the Peter Principle. A larger organization is going to let you see more sizes (since they are typically organized as subunits) and the issues that arise in each size. As examples: 1. Do you know how to manage a team of 3? 10? 50? 2. Do you know how to hire 10 engineers (ie, after you've asked all of your friends)? 3. Do you know how to budget/spend $100k? $1M? $5M? If not, then investors may be less willing to put money into your venture. Gaining those skills, especially the first two, has you situated to more successfully manage growth. I believe that spending some time at a large, successful company can be very beneficial. Disclosure: I recently joined TripAdvisor for just this reason. And I'm hiring into my team, thereby gaining experience in 1, 2 and 3!