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Ask HN: Pros and cons of working at a startup in 2018?

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Re: Ask HN: Pros and cons of working at a startup in 2018?

#211

Post by drb91 »

driverdan wrote: post #102
drb91 wrote: post #81

Earlier quoted context omitted.

Just to state the obvious, there are things to optimize for other than compensation (like happiness); ~$100k/year provides a comfortable life and saving opportunity in many (most?) parts of the country.

Very few YC startups allow remote work and a large percentage are in expensive areas like the bay.

This is true! However, there are still many quality startups elsewhere.

I’ll admit I would not choose to join one if they were to force me to live in SF and not give me a competitive salary.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#212

Post by swyx »

joshe wrote: post #138

This is such a great area to work on. The equity side is pretty rough. Founders are very sensitive about disclosing important information about company performance. They are sensitive about disclosing the cap table. Some will share info with investors that they don't share with employees. And they are sometimes trying to pitch optimistically and leaving out items that don't fit the narrative. So you end up with a ver…

> $800 million dollar startups die all the time

is this the case? i actually don't know that it is.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#213

Post by neeleshs »

ocdtrekkie wrote: post #22

Having not worked in the Valley or a startup, I can say the biggest con to me is a lack of stability. You can get a job at BigCo or even MediumSizedButBeenAroundTwoDecadesCo and be reasonably sure you'll still have a job... as long as you want to work there. But with a startup, either they run out of money and you lose your job, they pivot and don't need you and you lose your job, or they get acquired and you very li…

Yes, this works, and there are tons of companies that do it, referred to as "bodyshoppers".

Re: Ask HN: Pros and cons of working at a startup in 2018?

#214

Post by mathgeek »

ryandrake wrote: post #57
nieksand wrote: post #2

Just a few cons.... The big players have drastically pushed up developer comp. The "maybe" money that might come from a best-case startup exit isn't holding up well against the RSUs of the big players. I have friends pushing total comp north of 400K / year at the usual suspect companies. Over a five-year-span-till-liquidity your "maybe" money is competing against a near-guaranteed $2M in comp. Equity grants for early…

Take that view with a huge grain of salt. Nobody is denying that someone, somewhere is making $400k as a software engineer, but we are talking outlier employees at outlier companies. You’re not getting this as a medium level rank and file engineer, or at a non-FAANG company. This whole “software engineers make $400k” trope seems to have taken on a life of its own. Every time salary comes up here, these guys come out…

> these guys come out of the woodwork to tell you that their brother’s girlfriend’s roommate makes $400k at Facebook

Reminds me of grade school, when "my uncle who works at Sega" always had let their loving nephew/niece play that game that wasn't out yet.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#215

Post by expertentipp »

swimorsinka wrote: post #12
nieksand wrote: post #2

Just a few cons.... The big players have drastically pushed up developer comp. The "maybe" money that might come from a best-case startup exit isn't holding up well against the RSUs of the big players. I have friends pushing total comp north of 400K / year at the usual suspect companies. Over a five-year-span-till-liquidity your "maybe" money is competing against a near-guaranteed $2M in comp. Equity grants for early…

+1 to this. 10 years ago you couldn't make 400K at Google, Facebook, Microsoft, etc. Now you can. Startups made a lot more sense when your opportunity cost was 50-150K per year.

> 10 years ago you couldn't make 400K at Google, Facebook, Microsoft, etc. Now you can.

> when your opportunity cost was 50-150K per year.

That's why Google, Facebook, Microsoft, Amazon, etc are not attractive at all in Europe.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#216

Post by mariusz331 »

I'd like to recommend something: discourage 1-year cliffs in vesting schedules. I recently joined a BigCo where your stock vests monthly as soon as you start. I felt comfortable accepting that offer because I knew I could quit without leaving money on the table if I hated it.

Before BigCo, I was at a YC startup for 8 months that I disliked working at, but felt that I needed to hit the 1-year mark for the equity. That startup was generous enough to ignore my cliff when I told them how I felt, but I don't think most companies would do this.

I think moving cliffs to 3 or 6 months would make startup opportunities much more interesting to job-seekers.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#217

Post by cortesoft »

ryanSrich wrote: post #202
cortesoft wrote: post #196

Earlier quoted context omitted.

Huh, I really had the opposite feeling when I went to work for a big company instead of a startup. Both startups I worked for never had serious traction and both shut down as failed. We worked so hard to create really cool products, but there just was not the demand for what we made. Cool software with no users. Now, I work for a huge company. My work gets deployed to tens of thousands of servers, and I know that peo…

> Both startups I worked for never had serious traction and both shut down as failed I think this is the big difference. When you're working for a startup that literally can't keep up with demand (such as the one I work for now), it's an entirely different animal.

Right, but in reality more startups are like the ones I worked for than like the one you work for. Most startups fail.

Although, given that both of our stories are just anecdotes, the advice might come down to "Work for a good company that does valuable things that make a difference to people"...

Re: Ask HN: Pros and cons of working at a startup in 2018?

#218

Post by inimino »

shamino wrote: post #8
nieksand wrote: post #2

Just a few cons.... The big players have drastically pushed up developer comp. The "maybe" money that might come from a best-case startup exit isn't holding up well against the RSUs of the big players. I have friends pushing total comp north of 400K / year at the usual suspect companies. Over a five-year-span-till-liquidity your "maybe" money is competing against a near-guaranteed $2M in comp. Equity grants for early…

This. I joined a moderately successful startup (good acquisition where founders made > $1 m) and the rewards were not worth the risks as an early employee. Also, the RSUs are low risk, high rewards at the "usual suspects". Unless you love working on a small team with more autonomy, but without comfortable resources and losing sleep over whether your company will be there next week, I just don't see the attraction of…

> Why do founders get over 10x early employees?

Because founders take at least 100x the risk of an early employee, and 100x the personal risk and commitment.

Founders generally aren't getting paid (at least until revenue or significant funding comes through) and they have 100x the impact that an early employee does on the success of the company. If an early employee doesn't work out, the founders just replace that person. If the founders aren't working out, the company fails. If an early employee isn't working out and the founders don't replace that person, and the company fails, that is again the founder's fault.

Early startup employees have higher risk and generally more stress than at established companies, and if the market was rational, they would be compensated more, in cash, to offset this risk and stress.

Equity is not the solution, for many reasons. The biggest reason is that the founders will always value the equity higher than early employees. If not, they should not have founded the company.

It sometimes makes sense for founders to sell some of that early equity to VCs (anyone who has buckets of cash and wants more risk/reward exposure) who can afford to hedge by investing in lots of early stage companies, only one of which needs to be a winner. Once the VCs put the money in, it makes sense for founders to hire people at market rates.

VCs should be people who are swimming in cash, and therefore looking for a high rate of return, and with a high tolerance for risk in the amounts that they are going to invest. Early employees in general do not meet any of these criteria.

For early employees to accept equity in place of a market-clearing salary is then just a mistake. We see engineers settling for half the salary they could have at an established company, plus lottery tickets. This is absolutely crazy. Early engineers in the vast majority of cases should not be going anywhere near the kinds of crazy risk that pouring half your salary into a long-shot investment represents. Especially when the salary that you are left with is tied up in that same risky venture.

The reasonable position for early employees is to insist on not also being early investors. Raising money is the founders' responsibility, they should go out and do that, and early employees should demand the same salary they could get at an established company.

The argument that equity compensation aligns incentives makes sense for co-founders and for executives. It almost never makes sense for early technical hires who can easily be replaced.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#219

Post by snowmaker »

roguecoder wrote: post #172
mathattack wrote: post #110

Pros: - More autonomy - Less administrative overhead - More executive interaction - Higher percentage of superstar colleagues - Work is more fun - More breadth of opportunity and interaction Cons that YC can help with: - Less formal training - Less formal mentoring - When things go South, the cuts are worse and you have less notice (The above can be mitigated by offering training and mentoring for the entire communit…

One idea to reduce volatility in financial outcomes: offer equity in the YC fund itself in addition to the equity in individual companies. That would also give employees an incentive to support other employees in the cohort.

We've looked into that. It's hard to make the math work - when you slice up YC's equity into that many pieces, each piece becomes very small.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#220

Post by sjg007 »

dbuxton wrote: post #148
toomuchtodo wrote: post #4

Earlier quoted context omitted.

Entirely accurate. At a startup, I expect to make ~$100k/year, have mediocre insurance and work life balance, and underwhelming equity ( Unless you’re a founder, I actively steer colleagues away from working at a startup. The sense of accomplishment, impact, or whatever the feel good term is, isn’t worth shorting yourself on significant comp for years (while founders and funds are getting almost all the upside). Edit…

US healthcare is clearly a huge barrier to older employees joining startups. At my company we have a great selection of healthcare that's fairly affordable both for employees and the company. I think it's as good or better than any packages I've seen from big brand-name enterprises. However, as a European founder, I was shocked by the complexity and effort that went into the comparison shopping necessary to get anyth…

This is true but the logical implication then is why are there not more startups in Europe/Canada where healthcare is "free"..
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