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Why you should, and shouldn’t, join a startup

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Re: Why you should, and shouldn’t, join a startup

#41

Post by bradlys »

I get that this is a just a PR piece to attract new talent but I think you're selling a startup short still.

Learning is hardly a thing at startups. So many people are incredibly junior and know nothing about the industry or tech to begin with. (I mean, who else would take such low pay?) Yes, you can get to get pushed into unqualified roles and learn from it - depending on who you are. But that's really only at the cost of others - you're maximizing for one person and not the group. So it's really a startup is a system that maximizes the happiness of only a few individuals - which we already know with how stock gets treated. (Founders frequently being the only ones who get rich no matter how early on an employee you are) e.g. Wow, X got promoted to be the team lead/manager. X is definitely not qualified and, in fact, makes the most productive members of the team more unhappy by being a manager now. This only happened because the rest of management is desperate, broke, and can't afford anyone who is a good manager. People under X will leave the company. I've seen it happen a lot at startups and it results in crazy churn. Same with more technical decisions. Seeing people promoted to Senior/Staff who have are barely better than their junior counterparts (just more arrogance). A lot of folks recognize dumpster fires when they see it and bounce. They're is also so little growth opportunity once those positions are taken unless you're on a rocket ship.

In terms of learning tech: A lot of tech is also outdated at startups compared to big N. There are large enterprise companies that are using even older tech but there's no reason to join those as they pay on the same scale as startups (And your job security is no better than at a startup). Scaling problems only exist once you've hit rocket ship status (so who cares about anything) - whereas they're everywhere at a big company. There are startups that are trying to use the latest and greatest and do interesting things but the number I interview with who are using outdated tech seems worse than any Big N I've interviewed with. Big N seems to be way more cutting edge (because they can afford it in terms of resources and know it attracts talent). Upgrading tech at a startup only happens when the company finds out no one at $Y salary with Z options will join the company until the company updates their stack. It's not like they can really afford it anyway. The company is so focused on churning out features and pivoting wildly to extract any bit of $$$ that they can out of the market while they find their cash cow (cash cow being actual profit $$$ or just magic numbers that can increase their next round of funding).

Anyway, back to my point about selling a startup short, I think the only reason I'd truly consider startups is being able to choose the people you work with and the problems you solve (although that could change easily once the company finds out it needs to pivot - again). There was nothing about that here and it's obvious from reading the article that it's all about that but it's not brought up. You chose to work with your brother and all these folks. You don't get these choices at a big company. You're mostly thrown together and just deal with it.

Re: Why you should, and shouldn’t, join a startup

#42

Post by nostrademons »

kodablah wrote: post #24

> If you’re seriously considering both options — a traditional company and a startup — here are some points to consider. There are so many definitions of "startup", but given the common one of "VC funded trying to get big", I'd say there's a third company type between these two I dub a "starting-up". It's an early traditional company that's in the black but is not poised to go through the roof or become bloated with…

I worked for one of those for a couple years that had started as a "startup" when I did my internships with them but had morphed into "slow-growing lifestyle business" by the time I left.

I'd argue that you get most of the downsides of both with few of the upsides. You don't actually get stability with this setup; you're a couple of customer cancellations away from layoffs at any time. There is no career advancement. You pretty much don't have a shot at getting rich. It doesn't get you much of a resume boost (other than being employed) or much cred at parties. The workload is still fairly high, though not as insane as a fast grower.

The one thing it does have is that your learning rate will still be fairly high, and you have a sense of independence & responsibility that's akin to what a startup would give you. For the time period I was there (first year out of college), that perhaps was just what I needed. I wouldn't recommend making a career out of it, though.

Re: Why you should, and shouldn’t, join a startup

#43

Post by paulie_a »

colechristensen wrote: post #22

>But when you compare it to the defined structure of an established company, it just doesn’t compare. Big companies have employee onboarding, management training, goal setting they’ve been doing for years — all of the things that give people guidance and mentorship on what they need to do to be successful. Goal setting, training, onboarding... these are processes, process doesn't make good management. The problems wi…

A good manager is also actively coaching their employees too. Training is important, but there is a distinct difference between the two.

Re: Why you should, and shouldn’t, join a startup

#44

Post by kodablah »

nostrademons wrote: post #42
kodablah wrote: post #24

> If you’re seriously considering both options — a traditional company and a startup — here are some points to consider. There are so many definitions of "startup", but given the common one of "VC funded trying to get big", I'd say there's a third company type between these two I dub a "starting-up". It's an early traditional company that's in the black but is not poised to go through the roof or become bloated with…

I worked for one of those for a couple years that had started as a "startup" when I did my internships with them but had morphed into "slow-growing lifestyle business" by the time I left. I'd argue that you get most of the downsides of both with few of the upsides. You don't actually get stability with this setup; you're a couple of customer cancellations away from layoffs at any time. There is no career advancement.…

> You pretty much don't have a shot at getting rich

I agree with most of your points except this one as it's very situational. Maybe not as an intern, but having real albeit small equity in one of these tiny things can be negotiated, and they can get sold. Unlikely, sure, but the possibility is there.

But in general it's about what you're optimizing for. You're points are right for optimizing for intra-company career advancement, resume material, or party cred. But if you have other pursuits, especially with side projects, kids, or just general comfort it can be a good choice.

Re: Why you should, and shouldn’t, join a startup

#45

Post by shanghaiaway »

lkrubner wrote: post #40

I hope I won't bore people if I repeat a point that I've made before: far more startups die of suicide than homicide. The tendency to self-sabotage, among entrepreneurs, is surprisingly strong. And I’m hardly the only one who has noticed this odd fact. The great business guru Peter Drucker made the point repeatedly. In his 1985 book Innovation and Entrepreneurship, Drucker includes a long chapter on the tendency of e…

Excellent writing. I've been working on an essay on the same topic but my experience is not as rich as yours. Bought your book.

Re: Why you should, and shouldn’t, join a startup

#47

Post by swaggyBoatswain »

lkrubner wrote: post #40

I hope I won't bore people if I repeat a point that I've made before: far more startups die of suicide than homicide. The tendency to self-sabotage, among entrepreneurs, is surprisingly strong. And I’m hardly the only one who has noticed this odd fact. The great business guru Peter Drucker made the point repeatedly. In his 1985 book Innovation and Entrepreneurship, Drucker includes a long chapter on the tendency of e…

“The Universe is fundamentally electromagnetic yet non-sentient, and we are sentient but only partly electromagnetic; the Internet is the ultimate harnessing of sentience to the fundamental forces of the Universe. Therefore our software will put you, our customer, in the driver’s seat of real-time conscious human evolution.”

Great writeup. Also those 2 sentences remind me of https://www.reddit.com/r/iamverysmart/. Simple is better

Re: Why you should, and shouldn’t, join a startup

#48

Post by rjeli »

mpodlasin wrote: post #29

It's funny how my experience is exactly reverse. Since I joined startup I learn much less, since we can't afford experimentation and there are no other front end devs here, so I don't get a chance to learn backend stuff, since someone has to do front end part. I also hoped to learn some business stuff, but most of it happens behind closed doors between founders and investors while you code boring crud application.

> most of it happens behind closed doors between founders and investors

Lack of transparency is bad. If you care about it, leave. Find a founder who doesn't think they're better than you.

Re: Why you should, and shouldn’t, join a startup

#49

Post by _II__II_ »

mpodlasin wrote: post #29

It's funny how my experience is exactly reverse. Since I joined startup I learn much less, since we can't afford experimentation and there are no other front end devs here, so I don't get a chance to learn backend stuff, since someone has to do front end part. I also hoped to learn some business stuff, but most of it happens behind closed doors between founders and investors while you code boring crud application.

I couldn't agree more, I've just left a start up for a traditional company purely because here I have opportunities to learn. It comes down to the culture of the company a little bit, for example this place likes it's devs to do R&D/experimentation to scope out opportunities to add value to the business. The point remains though that such a thing just wasn't possible at the startup I was at, there wasn't time.

Re: Why you should, and shouldn’t, join a startup

#50

Post by nostrademons »

kodablah wrote: post #44
nostrademons wrote: post #42

Earlier quoted context omitted.

I worked for one of those for a couple years that had started as a "startup" when I did my internships with them but had morphed into "slow-growing lifestyle business" by the time I left. I'd argue that you get most of the downsides of both with few of the upsides. You don't actually get stability with this setup; you're a couple of customer cancellations away from layoffs at any time. There is no career advancement.…

> You pretty much don't have a shot at getting rich I agree with most of your points except this one as it's very situational. Maybe not as an intern, but having real albeit small equity in one of these tiny things can be negotiated, and they can get sold. Unlikely, sure, but the possibility is there. But in general it's about what you're optimizing for. You're points are right for optimizing for intra-company career…

My point is that companies that are slow-growing are rarely sold, and when they are, they usually aren't sold for much. The eye-popping valuations for companies like Whatsapp, Instagram, and YouTube were all based on growth, and on strategic fit with the acquirer. When an acquirer wants you for these reasons, there are large time pressures and asymmetries of information you can leverage to extract a lot more money than the financials would dictate. (Whatsapp, for example, sold for something like 1000x revenues.)

Small slow-growing companies almost always sell based on financials, and typically for lower multiples than an equivalent large public company would (because their revenue is more concentrated in a few customers and so they're more exposed to revenue risk). I've heard 2.5x revenues or 15x profits as numbers commonly batted around; above this and there's virtually no reason to buy the company vs. invest in public stocks or apartment buildings. On a typical 10-person company that makes a profit of about $300K on revenues of about $2M, this comes out to a sale price of roughly $5M by both valuation measures. Own 1% equity (this is generous, and would usually indicate employee #1 or 2) of a $5M acquisition and you get $50K, which is probably a lot less than the salary you forego over a few years by not joining a big company.

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