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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?

#801
Pros:

* Technical skills sink or swim very quickly - you'll learn vastly more in the same period of time at a startup than you will at a big company. Or you'll fail.

* You learn to accept that failure isn't as bad as high school / college would have you believe - as long as you learn from it.

* Invaluable leadership experience very early on.

* A lot more responsibility early on - if you like to take charge and see things through it's a wonderful experience.

* Startups are usually founded by intelligent, successful, driven people - based on head count you usually work closely with them and have the opportunity to soak in that knowledge and experience.

* Connections. When you're young / early in your career a startup puts you in situations to meet people you wouldn't normally be in the same room with at a large company.

Cons:

* Equity is a joke. Liquidation preferences are always against the employee no matter how early. I'm at my second startup and anytime I hear a coworker talk about taking a pay cut because they got equity I cringe.

* The pay CAN suck, it doesn't have to. It took two tries but at my second startup (current job) I'm paid fairly. Maybe slightly less than I would be making in the same role at a large company but coming here included a promotion I was 6-12 months away from at the previous large company.

Neutral:

* Transparency. Some startups keep everyone in the dark about cash on hand, burn rates, fundrasiing, etc. Do not work for one of those startups.

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

#802
I think with most startups, even if they're successful, they don't deliver on the ownership and ROI you would expect for the time you invest.

Several years ago, I joined a Midwestern startup just before the Series A as one of the first ten employees and the first mobile FT dev. I took a pay cut to join and was explicitly promised ownership and real "skin in the game." Nine months later, when they finally devised an options pool, I found I had been granted 0.065% and left immediately. It was like they'd stolen months of my work. Today, they have over two hundred employees and are probably headed to a large equity event.

Another startup I joined raised a lot of money and paid almost market rates to some of the best developers in town. Their tech was some of the best in the city, but they pivoted and lost most of their developers when they didn't achieve product-market fit. They will probably only ever reach a tiny multiple compared to what their investors desired.

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

#803
post #481
post #212

Earlier quoted context omitted.

> $800 million dollar startups die all the time is this the case? i actually don't know that it is.

Oh yes. Jawbone $2.7 billion valuation -> 0 Beepi $560 million -> 0 Better Place $2.5 billion -> 0 Quixey $600 million -> 0 YikYak $400 million -> $3 million Fab.com $1.5 billion -> $15 million Rdio $500 million -> $75 million Here's 133 of them, most pretty big: https://www.cbinsights.com/research/biggest-startup-failures... Also got some details from: http://www.businessinsider.com/startups-that-raised-148-bill...

great list, and i even knew someone who worked at Fab. thanks.

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

#804

Earlier quoted context omitted.

> Early-stage companies should offer sufficient equity such that their employees should in expectation earn at least the same as they would at a public company. That's the joke! Nobody comes remotely close to offering enough equity that their total comp is equivalent! Imagine a company that just raised a $1M seed round on convertibles at a $6M valuation cap. Now say they offer an "extremely generous" 2% equity packag…

When you offer 10% per employee, how many employees can you actually take on??

That was part of the comment: at that point it's more like a co-founder not an employee. So: very few obviously.

Perhaps more reasonable is 1-2% per for the first 5-10 hires, then 0.5-1% for the next batch, etc.

Also I really think these should be RSUs, not options. Employees are already invested in the startup by paying a premium in the form of reduced salary and opportunity cost.

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

#805
post #683

Earlier quoted context omitted.

The most important leverage is to just say no if they won’t agree. It doesn’t matter what level or specialization or education or experience you have. The only way to win a negotiation is to just genuinely not want what the other party is offering if it doesn’t meet your criteria, and turn it down. Obviously, if you are desperate for a job due to other factors, you may be literally unable to turn down a suboptimal of…

I get it. But what you are describing is quite optimistic/idealistic. Most companies will say "no thanks" and move on to the next candidate in their list. There are much smaller things that companies treat as deal breakers, let alone asking for a private office. The dynamics of it just doesn't work if there is a open office plan with 20 people working in it, then there's one lone snowflake demanding their own office.…

> "Most companies will say "no thanks" and move on to the next candidate in their list."

I don't see why this makes any part of it idealistic or how it is connected.

I view it as pragmatic.

Consider an employer who feels so entitled to workers that just take whatever unproductive office space they give that they would just say, "no thanks" to a qualified candidate and move on. Never mind the fact that in many domains, it's extremely hard to find good engineers, and 'just moving on to the next candidate' is not really a thing. Beyond that, this employer would be telling me how entitled they believe they are, and inflexible about a top-down mandated open floor plan design.

It's not idealism to want to avoid that sort of employer, it's just pragmatism. Like I mentioned, unless you're in dire straits and you have to compromise to take a job right away, then just say no. In other situations, you can by definition afford to just search longer and longer until an employer meets these standards.

I agree it would require patience for a very long job search, but I don't agree that it is optimistic or idealistic. Rather, it's pragmatic and being patient to reject all the bad employers who won't care about your ergonomic health is important and worthwhile, even at the cost of a slow job search where you turn people down for failing to provide private offices.

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

#806

The basic problem right now is that adding capital dilutes labor, but adding labor doesn't dilute capital. I think this is one of the biggest problems the blockchain can solve by driving down the costs of double entry accounting by at least an order of magnitude.

This is super interesting but I don't quite understand it.. Can you explain how adding capital dilutes labor? Also, how does blockchain make it cheaper to do double entry accounting?

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

#807
post #804

Earlier quoted context omitted.

When you offer 10% per employee, how many employees can you actually take on??

That was part of the comment: at that point it's more like a co-founder not an employee. So: very few obviously. Perhaps more reasonable is 1-2% per for the first 5-10 hires, then 0.5-1% for the next batch, etc. Also I really think these should be RSUs, not options. Employees are already invested in the startup by paying a premium in the form of reduced salary and opportunity cost.

If you give them Restricted Stock, though, they have to pay tax on whatever the 409(a) value is -- which is what the strike price would have been with options.

You can give them a signing bonus to cover the tax, but at this point it's easier and actually better for the employee to give them the cash separately and say "you can use it to exercise if you like".

Really the difference between options and Restricted Stock is measurable in dollars, so might as well just give people the dollars.

(Note that Restricted Stock is not quite the same thing as Restricted Stock Units (RSUs)... RSUs are for later stage companies. But the principles are similar.)

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

#808

Earlier quoted context omitted.

If its worth 100 million it isnt a startup.

Hm? Plenty of startups have current valuation over $100m. However, I just chose this number because it is nice and round so the math is obvious.

Then I would argue that they aren't startups, they are fully formed businesses.

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

#810
post #663

Earlier quoted context omitted.

I don't quite understand. On the one hand you're saying that early employees should "demand market comp" and on the other you're saying that equity basically doesn't matter (and if you feel this way, it doesn't really make any sense to be joining a startup anyway). Are you conflating "compensation" with "salary"? "Market comp" for a good engineer with several years of experience in the Bay Area is something like 250k…

250-350k is low for Google and FB. It's more like 400-500k if you are senior, 500-700k if you are staff. This is including RSUs

I always feel like every developer on HN is making like $200k-$400K without blinking, maybe that's true. Just for a perspective on these numbers, the top 1% of income in CA is $450K - https://www.reddit.com/r/dataisbeautiful/comments/8qhh3x/ann...
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