In my experience, focusing on non-financial aspects of a job/startup is a better orientation. Is the startup working on something that fires you up? That makes the world better? Will you get to work with interesting, kind people? Will you build new skills you want to have? Then sounds like an awesome opportunity to me!
Sure, there is a financial haircut in salary but most startups pay enough to live on. If your focus is the experience you get there, then even if the startup doesn't become a unicorn it will have been a worthwhile experience and you can leverage it into the next thing you do. You'll also have a sense once you're there if things are going in the right direction or not. Leave if things feel exploitative, obviously, but I wouldn't say joining a mission-driven startup is a bad idea. On the contrary, I can't imagine joining a company that isn't mission-driven.
As someone who has founded a couple of companies and worked in the startup ecosystem my whole career, here are my two cents:
● Money. Startup equity is like a lottery ticket. I agree with the author that the chances of your startup equity ever turning into a life-changing amount of money are slim. In most cases, you'll be better off economically taking a corporate job, saving and investing. However, most people aren't exclusively (or even primarily) motivated to work by money.
● Meaning. Workers want to feel like their work is having a positive impact on the world, and you're more likely to find that in a startup.
● Mastery. One of the complaints of a typical corporate job is that it's boring. One of the most compelling reasons to work at a startup is that you're constantly pushed to learn and grow. When we're learning and growing, we actually enjoy work more—even though it's harder.
● Autonomy. Autonomy is the ability to execute your work in the way that you see fit without your boss micromanaging you. Honestly, this one is a coin toss. I find that autonomy can vary within any organization, depending on your direct manager. There are micromanagers in startups just like there are in the corporate world.
● Team. One of the most tangible impacts on fulfillment at work is whether you like the people you work with. The cool thing is that great people are at all types of companies. But, in my experience, if you're the type of person that finds enough meaning, mastery and/or autonomy that you're willing to take the economic risk to work at a startup, then you'll probably find a like-minded tribe of people there.
Considering I was fired unjustly this week from a growing company I was pouring my everything into I would say don’t work for a startup. But...I disagree with the statement that mission driven companies often end up exploitative. I think leaders that manipulate end up exploitative but the employees who are drawn to mission driven companies tend to be more creative problem solvers and empathetic.
I have a lot of feelings about building value based businesses and I hope I can help more of these start ups and small businesses incorporate better business practices so they don’t exploit their employees.
In my career as a consultant and employee, I have worked for over a dozen start-ups, so I don't ascribe to the mantra of "Don't work at a start-up." First of all, I have never "taken a haircut" on salary to work for a start-up, and no one ever should. If the start-up isn't well funded enough to pay prevailing wages then that start-up isn't worth your consideration. None of the start-ups I've worked for have (yet) been successful, which reinforces that one should never count on equity to make up for uncompensated effort and hard work. I have thoroughly enjoyed working at all the start-ups in my past because the nature of start-ups is that you are attempting to do something that has never been done before, which I have found to be exciting, challenging, extremely frustrating, and at the same time incredibly rewarding. I have gained experience that I never would have had the opportunity to if I had been working for a main-stream company. My recommendation is to join a start-up if you are motivated to figure out how to do things independently and love to be challenged. However, if you like to be comfortable and be mentored on how to do your job, work for a main-stream company.
All companies can trace their roots back to a startup. The best startups run ahead of the bigger corps, and as a result often offer more opportunities to work at the leading edge, and when they’re growing rapidly, the chance to take on bigger challenges sooner in your career. At what point in a company’s lifecycle you should sign on depends a great deal on whether that kind of environment is attractive to you, your own personal tolerance for and ability to take risk, and where you’ll be if the thing does fail. As large companies also suffer setbacks, that last question really applies across the board. If you’ll be stronger and more capable regardless of the outcome, you love the people and the work, and can afford to take the risk, go for it.
I have great experience working at start-ups--if you love flexibility, creativity and the ability to bob and weave in your career -- there's nothing like it! But you have to have a very high tolerance for ambiguity! In fact, my tech career has all been startups.
What follows is based on my personal experience with 4 startups--the first, like many, went bankrupt; the second was bought out; the third was sold to Roche; and the fourth is a work in progress. I have also worked in a global company with 60k+ employees.
Should you work in a start-up? Maybe. I think that the answer depends on 4 factors, the first relates to what it is that drives you and the other 3 have to do with the startup: (1) do you believe in the technology--is the technology differentiated and protected and is there an attractive market? (2) do you believe in the leadership--is this their first company, is there clear focus/mission, are they really good at what they do? (3) how much runway do they have--are they adequately financed and could they raise more capital if needed?
Now the personal factor. Startups have more risk tolerance, faster decision making, and faster advancement for talented people. If you like building things from scratch rather than just running things, a start-up environment can give you this opportunity. In terms of employment security I ask "what's that?". Middle management is a graveyard in both large and small companies.
So, should you work in a startup? That depends on you and the start-up...
Startups are masterclasses for learning about yourself, organizational dynamics, and an industry. Compensation very low on my list of why I've worked for startups for 25 years. My times that I have bounced back to large companies have taught me that the ratio of learning tasks/BS tasks is way higher in startups.
I've been fired, companies shut down, and some just hit a growth ceiling. Never earned a dime from stock options, but did have founders gift me a nice 529 plan for my daughter when I left (for budgetary reasons) six months before they were acquired at a high multiple.
Yes, there have been culture issues, but I've also been blessed by working for folks who want to improve themselves as much as they want to grow a company. There are fewer places to hide in a startup, so a focus on personal growth (intellectual, emotional, physical) seems to be more common than with big companies.
So in the end, options are lottery tickets and toxic cultures can be avoided and/or improved. I hope my experiences are shared by a majority, not a minority.
I’ve never made much if any money from working at, leading, or investing at startups. My advice to that friend is pick career opportunities based on who you get to work with, and how the organization gets it work done (culture and values). Minimum financial and benefit requirements can’t be ignored, but hopes of getting rich or valuable equity are best left for the powerball lottery.
This article brought to mind 19th century Scottish writer Andrew Lang’s trenchant critique of people who misuse data: "He uses statistics as a drunken man uses lampposts... for support rather than illumination."
The author’s voluntarily admission of his hypocrisy--he works in a VC-backed startup--doesn’t acquit him of this unsavory sleight of hand: presenting reductive and globally presumptive declarations about complex situations and decisions as offering readers a “clear-eyed view of tradeoffs.”
But I see one important point in his drivel: leadership matters. In the startup world, volatility and insecurity go with the territory. How leaders respond to and navigate the startup journey is everything. This is frequently the pivotal but invisible fatal flaw for founder-entrepreneurs who, talent and ambition notwithstanding, often have zero experience or guidance in being a leader.
The success, failure, or struggle of people in leadership positions, who carry tremendous influence and responsibility, link to their capacities and limitations in recognizing and effectively navigating their own psychological and emotional stresses and anxieties. In organizations and in the knowledge economy, leaders must bring and use their whole selves; the capacity to leverage one’s own multifaceted, complex character and personality, and to fulfill the demands and expectations of high-performing roles, elevates insight and management of self to a reasonable imperative.
I'm a serial social entrepreneur and have also had senior roles at a number of tech startups. Whether someone should work at a startup depends on a number of factors that depend both on the individual - someone who is happy with risk, and wants to be pushed into areas they might not qualify for will have a different experience than someone wanting solidity and predictability - and on the startup - is it focusing on something you care about, or just sharing cat videos.
In general I'd look for startups comes from solving a problem noone else is rather than where a success is not being the one "unicorn" that wins - take a 10% chance of being a success over a 1% chance of being a unicorn any day. Mostly because if you roll a 10% dice every few years then there is a good chance of success, but as an employee (rather than a fund) you can never roll hte 1% dice enough times.
This of course is the problem with most VC startups and funds - they've moved so far upstream that they are leaving viable companies on the table in favor of chasing mythical unicorns.
Given the impact focus, I'd suggest the calculation is very different in impact startups - its more about what is my chance of solving a really important problem, than of making a big windfall, and for me personally that is worth the risk. Though of course the biggest risk is not whether you can solve the problem, but on whether you can convince the impact investors to give you the money to have a go at it.
So what does define a start up, I work for a company that’s been around for nearly a decade yet still doesn’t have a product on the market, but is backed by venture capital and has start up mentality. They pay competitively with hopefully what will be a nice stock bundle someday. Also I am learning constantly as well as bringing my cumulative life work experience to the table and work with energetic interesting people. So there by disagree with the statement and feel that the right start up company can give you the full package.
Working for a startup? It depends. The article references unicorns and many startups fail as referenced and don’t become unicorns. I live in Columbia, MO and home to Veterans United, Equipment Share, and Newsy. Newsy was acquired but the other two companies focused on culture from the start. I taught business students and we talked about working for a startup. My own experience working with students that worked for startups was “danger, ask culture questions.” There were experiences shared of founders with brilliant visions and absolutely horrible leadership/people management skills. I’m also an HR professional. So, ask questions, realize there’s a good chance you’ll work many hours and perhaps a bit of chaos. I’m not ever going to have the resources to be a VC. I encourage startups to have a vision for the people/culture as well as the vision for the business. Perhaps there would be better retention of people and less failed businesses? Who knows? It was an interesting read!
I was discussing exactly this with a long term friend (while queuing to see The Boss). I was sharing my recent experience joining a star up and he came to the conclusion that sure it was a better option for me. I agreed.
I worked for two startups. The first went bankrupt after I was there 3 months - it was my first job right out of school and I didn't have much trouble getting another one. I made lifelong friends (including one of the founders), had fun, and don't regret it at all.
At the 2nd, in 1997, the policy was _not_ to put in long hours as a matter of course - to work normal workweeks - but there would be the occasional weekend when it would be all-hands-on-deck to meet a customer deadline. That was fine, and actually what I was used to coming from a consulting company (BBN, now part of Raytheon).
I was employee #18, so I had high hopes of being independently wealthy. The founder sat me down one day and explained that was extremely unlikely - instead I would probably get a decent payout, but it wouldn't be millions. And he was right. When the company was acquired I received enough money to buy a nice new car, but it wasn't life-changing.
I really wanted to get into educational technology, and when I got a chance to join an ed-tech startup I was really interested. But when the founder outlined the work I'd be doing and the timeline, I grew wary. Told him that while I was fine with the occasional long weekend, and even longer work-weeks like 45 or 50 hours/week, I wasn't going to put in 80-90 hour weeks for long periods of time - and that's what it looked like it would be if I joined.
He thanked me for being upfront about it and we decided to part ways.
So do join a startup if it excites you - but set your expectations up front. And don't join just because you might get rich.
Startups early in your career can be amazing for work experience and skill development. You get exposure to more than you get when working for a large company. At the same time you may get little to zero mentorship and development. I don’t regret my startup gigs but always knew it was about experience over money at the time.
A quick poll of friends about “have you ever received some form of stock or equity payout from a startup?” And the most anyone had made was $2000 :)
In my experience, focusing on non-financial aspects of a job/startup is a better orientation. Is the startup working on something that fires you up? That makes the world better? Will you get to work with interesting, kind people? Will you build new skills you want to have? Then sounds like an awesome opportunity to me!
Sure, there is a financial haircut in salary but most startups pay enough to live on. If your focus is the experience you get there, then even if the startup doesn't become a unicorn it will have been a worthwhile experience and you can leverage it into the next thing you do. You'll also have a sense once you're there if things are going in the right direction or not. Leave if things feel exploitative, obviously, but I wouldn't say joining a mission-driven startup is a bad idea. On the contrary, I can't imagine joining a company that isn't mission-driven.
As someone who has founded a couple of companies and worked in the startup ecosystem my whole career, here are my two cents:
● Money. Startup equity is like a lottery ticket. I agree with the author that the chances of your startup equity ever turning into a life-changing amount of money are slim. In most cases, you'll be better off economically taking a corporate job, saving and investing. However, most people aren't exclusively (or even primarily) motivated to work by money.
● Meaning. Workers want to feel like their work is having a positive impact on the world, and you're more likely to find that in a startup.
● Mastery. One of the complaints of a typical corporate job is that it's boring. One of the most compelling reasons to work at a startup is that you're constantly pushed to learn and grow. When we're learning and growing, we actually enjoy work more—even though it's harder.
● Autonomy. Autonomy is the ability to execute your work in the way that you see fit without your boss micromanaging you. Honestly, this one is a coin toss. I find that autonomy can vary within any organization, depending on your direct manager. There are micromanagers in startups just like there are in the corporate world.
● Team. One of the most tangible impacts on fulfillment at work is whether you like the people you work with. The cool thing is that great people are at all types of companies. But, in my experience, if you're the type of person that finds enough meaning, mastery and/or autonomy that you're willing to take the economic risk to work at a startup, then you'll probably find a like-minded tribe of people there.
Considering I was fired unjustly this week from a growing company I was pouring my everything into I would say don’t work for a startup. But...I disagree with the statement that mission driven companies often end up exploitative. I think leaders that manipulate end up exploitative but the employees who are drawn to mission driven companies tend to be more creative problem solvers and empathetic.
I have a lot of feelings about building value based businesses and I hope I can help more of these start ups and small businesses incorporate better business practices so they don’t exploit their employees.
In my career as a consultant and employee, I have worked for over a dozen start-ups, so I don't ascribe to the mantra of "Don't work at a start-up." First of all, I have never "taken a haircut" on salary to work for a start-up, and no one ever should. If the start-up isn't well funded enough to pay prevailing wages then that start-up isn't worth your consideration. None of the start-ups I've worked for have (yet) been successful, which reinforces that one should never count on equity to make up for uncompensated effort and hard work. I have thoroughly enjoyed working at all the start-ups in my past because the nature of start-ups is that you are attempting to do something that has never been done before, which I have found to be exciting, challenging, extremely frustrating, and at the same time incredibly rewarding. I have gained experience that I never would have had the opportunity to if I had been working for a main-stream company. My recommendation is to join a start-up if you are motivated to figure out how to do things independently and love to be challenged. However, if you like to be comfortable and be mentored on how to do your job, work for a main-stream company.
All companies can trace their roots back to a startup. The best startups run ahead of the bigger corps, and as a result often offer more opportunities to work at the leading edge, and when they’re growing rapidly, the chance to take on bigger challenges sooner in your career. At what point in a company’s lifecycle you should sign on depends a great deal on whether that kind of environment is attractive to you, your own personal tolerance for and ability to take risk, and where you’ll be if the thing does fail. As large companies also suffer setbacks, that last question really applies across the board. If you’ll be stronger and more capable regardless of the outcome, you love the people and the work, and can afford to take the risk, go for it.
I have great experience working at start-ups--if you love flexibility, creativity and the ability to bob and weave in your career -- there's nothing like it! But you have to have a very high tolerance for ambiguity! In fact, my tech career has all been startups.
What follows is based on my personal experience with 4 startups--the first, like many, went bankrupt; the second was bought out; the third was sold to Roche; and the fourth is a work in progress. I have also worked in a global company with 60k+ employees.
Should you work in a start-up? Maybe. I think that the answer depends on 4 factors, the first relates to what it is that drives you and the other 3 have to do with the startup: (1) do you believe in the technology--is the technology differentiated and protected and is there an attractive market? (2) do you believe in the leadership--is this their first company, is there clear focus/mission, are they really good at what they do? (3) how much runway do they have--are they adequately financed and could they raise more capital if needed?
Now the personal factor. Startups have more risk tolerance, faster decision making, and faster advancement for talented people. If you like building things from scratch rather than just running things, a start-up environment can give you this opportunity. In terms of employment security I ask "what's that?". Middle management is a graveyard in both large and small companies.
So, should you work in a startup? That depends on you and the start-up...
Startups are masterclasses for learning about yourself, organizational dynamics, and an industry. Compensation very low on my list of why I've worked for startups for 25 years. My times that I have bounced back to large companies have taught me that the ratio of learning tasks/BS tasks is way higher in startups.
I've been fired, companies shut down, and some just hit a growth ceiling. Never earned a dime from stock options, but did have founders gift me a nice 529 plan for my daughter when I left (for budgetary reasons) six months before they were acquired at a high multiple.
Yes, there have been culture issues, but I've also been blessed by working for folks who want to improve themselves as much as they want to grow a company. There are fewer places to hide in a startup, so a focus on personal growth (intellectual, emotional, physical) seems to be more common than with big companies.
So in the end, options are lottery tickets and toxic cultures can be avoided and/or improved. I hope my experiences are shared by a majority, not a minority.
I’ve never made much if any money from working at, leading, or investing at startups. My advice to that friend is pick career opportunities based on who you get to work with, and how the organization gets it work done (culture and values). Minimum financial and benefit requirements can’t be ignored, but hopes of getting rich or valuable equity are best left for the powerball lottery.
This article brought to mind 19th century Scottish writer Andrew Lang’s trenchant critique of people who misuse data: "He uses statistics as a drunken man uses lampposts... for support rather than illumination."
The author’s voluntarily admission of his hypocrisy--he works in a VC-backed startup--doesn’t acquit him of this unsavory sleight of hand: presenting reductive and globally presumptive declarations about complex situations and decisions as offering readers a “clear-eyed view of tradeoffs.”
But I see one important point in his drivel: leadership matters. In the startup world, volatility and insecurity go with the territory. How leaders respond to and navigate the startup journey is everything. This is frequently the pivotal but invisible fatal flaw for founder-entrepreneurs who, talent and ambition notwithstanding, often have zero experience or guidance in being a leader.
The success, failure, or struggle of people in leadership positions, who carry tremendous influence and responsibility, link to their capacities and limitations in recognizing and effectively navigating their own psychological and emotional stresses and anxieties. In organizations and in the knowledge economy, leaders must bring and use their whole selves; the capacity to leverage one’s own multifaceted, complex character and personality, and to fulfill the demands and expectations of high-performing roles, elevates insight and management of self to a reasonable imperative.
I'm a serial social entrepreneur and have also had senior roles at a number of tech startups. Whether someone should work at a startup depends on a number of factors that depend both on the individual - someone who is happy with risk, and wants to be pushed into areas they might not qualify for will have a different experience than someone wanting solidity and predictability - and on the startup - is it focusing on something you care about, or just sharing cat videos.
In general I'd look for startups comes from solving a problem noone else is rather than where a success is not being the one "unicorn" that wins - take a 10% chance of being a success over a 1% chance of being a unicorn any day. Mostly because if you roll a 10% dice every few years then there is a good chance of success, but as an employee (rather than a fund) you can never roll hte 1% dice enough times.
This of course is the problem with most VC startups and funds - they've moved so far upstream that they are leaving viable companies on the table in favor of chasing mythical unicorns.
Given the impact focus, I'd suggest the calculation is very different in impact startups - its more about what is my chance of solving a really important problem, than of making a big windfall, and for me personally that is worth the risk. Though of course the biggest risk is not whether you can solve the problem, but on whether you can convince the impact investors to give you the money to have a go at it.
So what does define a start up, I work for a company that’s been around for nearly a decade yet still doesn’t have a product on the market, but is backed by venture capital and has start up mentality. They pay competitively with hopefully what will be a nice stock bundle someday. Also I am learning constantly as well as bringing my cumulative life work experience to the table and work with energetic interesting people. So there by disagree with the statement and feel that the right start up company can give you the full package.
Working for a startup? It depends. The article references unicorns and many startups fail as referenced and don’t become unicorns. I live in Columbia, MO and home to Veterans United, Equipment Share, and Newsy. Newsy was acquired but the other two companies focused on culture from the start. I taught business students and we talked about working for a startup. My own experience working with students that worked for startups was “danger, ask culture questions.” There were experiences shared of founders with brilliant visions and absolutely horrible leadership/people management skills. I’m also an HR professional. So, ask questions, realize there’s a good chance you’ll work many hours and perhaps a bit of chaos. I’m not ever going to have the resources to be a VC. I encourage startups to have a vision for the people/culture as well as the vision for the business. Perhaps there would be better retention of people and less failed businesses? Who knows? It was an interesting read!
I was discussing exactly this with a long term friend (while queuing to see The Boss). I was sharing my recent experience joining a star up and he came to the conclusion that sure it was a better option for me. I agreed.
I worked for two startups. The first went bankrupt after I was there 3 months - it was my first job right out of school and I didn't have much trouble getting another one. I made lifelong friends (including one of the founders), had fun, and don't regret it at all.
At the 2nd, in 1997, the policy was _not_ to put in long hours as a matter of course - to work normal workweeks - but there would be the occasional weekend when it would be all-hands-on-deck to meet a customer deadline. That was fine, and actually what I was used to coming from a consulting company (BBN, now part of Raytheon).
I was employee #18, so I had high hopes of being independently wealthy. The founder sat me down one day and explained that was extremely unlikely - instead I would probably get a decent payout, but it wouldn't be millions. And he was right. When the company was acquired I received enough money to buy a nice new car, but it wasn't life-changing.
I really wanted to get into educational technology, and when I got a chance to join an ed-tech startup I was really interested. But when the founder outlined the work I'd be doing and the timeline, I grew wary. Told him that while I was fine with the occasional long weekend, and even longer work-weeks like 45 or 50 hours/week, I wasn't going to put in 80-90 hour weeks for long periods of time - and that's what it looked like it would be if I joined.
He thanked me for being upfront about it and we decided to part ways.
So do join a startup if it excites you - but set your expectations up front. And don't join just because you might get rich.
Startups early in your career can be amazing for work experience and skill development. You get exposure to more than you get when working for a large company. At the same time you may get little to zero mentorship and development. I don’t regret my startup gigs but always knew it was about experience over money at the time.
A quick poll of friends about “have you ever received some form of stock or equity payout from a startup?” And the most anyone had made was $2000 :)