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Working for a startup makes less sense, unless you are into the mission

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Re: Working for a startup makes less sense, unless you are into the mission

#41

Post by pinewurst »

TAForObvReasons wrote: post #2

Early stage hires at startups have the worst of both worlds: they face the downsides (lower wages, tons of risk, expectation to work long hours) but have muted upsides (small equity grant relative to founders, not even guaranteed to be hired in an acquihire situation). It is arguably even riskier than being a founder.

I totally agree with this. I've been in two early stage startups like the OP, both high reputation. The first gained me ~US$12,000 on IPO (I put it towards a Nissan 300ZX Twin Turbo :) and the second, US$0 (ironically having that car was part of why they hired me :). Definitely a loss if one counts emotional wear. I still have dreams about being back at the 1st place and they're not good ones.

Re: Working for a startup makes less sense, unless you are into the mission

#42

Post by zapita »

acconrad wrote: post #21

As someone who was a 1st engineer of a startup that successfully exited I had what would be considered a good payout. When looking over the course of my career, however, it simply made up for the reduced salary I took for the years I worked there. It was a net-neutral outcome to be the 1st engineer at a startup that actually exited for a substantial (8-figure deal) outcome which already puts me in the minority. So no…

There is still a financial aspect though: that rapid increase in responsibility and experience most probably translated to higher income at your next jobs. And there is a compounding effect each time you change jobs, so the earlier you were in your career when you worked at a startup, the more you gain from it financially over the course of your career.

I think we have selection bias on Hacker News because many of the prominent voices here tend to have high-paying jobs at prestigious tech companies, or at least know that they could get such a job at the snap of a finger. So from that perspective, joining a startup as an early employee is less attractive. For industry insiders who want to work at a startup, it often makes more sense to just raise money and start one yourself. They can do that relatively easily because their insider status vastly increases their chances of raising seed money.

For everyone else however... that cushy Google job is not at all guaranteed, and neither is the 500k angel investor check to be a co-founder. So, although being an early employee at a startup is definitely not for everyone... From an outsider’s perspective it can be pretty damn tempting.

Re: Working for a startup makes less sense, unless you are into the mission

#43

Post by throwaway74688 »

lambdasquirrel wrote: post #26
aggronn wrote: post #14

This is knitpicky, because OP's point may still stand, but as a founder, this is what comes to mind after reading this: When I hear "work for a startup", I don't assume that means "be the 10th engineer at a company". You might make some money at that point, but you're not going to get financial independence unless there's a billion dollar IPO. By BigCo standards, 10 engineers is a tiny startup. By venture/founder sta…

Okay, and as someone who has hitherto largely worked at startups (2/3rd of my career), let me tell you the counterpoint. There is not a lot of risk from your perspective, but there is a large amount of risk for us . At a startup, you push all you can towards steering the ship in the right technical direction. For example, unlike at a BigCo, you are likely to be that person who will write the technical debt that later…

> So to "make it," you effectively have to grow into a BigCo employee anyway.

Currently at a startup that is angling for IPO and it got very corporate in a hurry. I'm finding it fascinating to experience, but it has more in common with a BigCo now without as much of the upside.

Re: Working for a startup makes less sense, unless you are into the mission

#44

Post by jerf »

gaogao wrote: post #10
coldtea wrote: post #7

Earlier quoted context omitted.

> That's more in cash AND benefits than a doctor. Does the company make wildly more money than a doctor's practice?

For my dad, a psychiatrist, running a private practice netted him around $400,000 yearly.

Psychiatry scales "poorly", being "merely" linear in input. I scare quote those words because they're only poor by software standards.

That's why software companies make the big bucks; they're just about the only businesses around that can reliably scale superlinearly in inputs. People who can help you scale superlinearly in inputs are pretty darned valuable.

Re: Working for a startup makes less sense, unless you are into the mission

#45

Post by jacobn »

Analemma_ wrote: post #27
aggronn wrote: post #14

This is knitpicky, because OP's point may still stand, but as a founder, this is what comes to mind after reading this: When I hear "work for a startup", I don't assume that means "be the 10th engineer at a company". You might make some money at that point, but you're not going to get financial independence unless there's a billion dollar IPO. By BigCo standards, 10 engineers is a tiny startup. By venture/founder sta…

> “equity is about alignment, not risk compensation” This seems like moving the goalposts to me, I have always heard the opposite: that the tradeoff of working at a startup for a reduced salary is supposed to be that you get equity to compensate. If the equity share is tiny by the time you get to engineer #10, fine, but engineer #10 should get near-market salary to compensate. Otherwise there’s no reason not to go wo…

> "You should be able to pay market, and equity is about alignment not risk compensation."

Re: Working for a startup makes less sense, unless you are into the mission

#46

Post by tabtab »

acconrad wrote: post #21

As someone who was a 1st engineer of a startup that successfully exited I had what would be considered a good payout. When looking over the course of my career, however, it simply made up for the reduced salary I took for the years I worked there. It was a net-neutral outcome to be the 1st engineer at a startup that actually exited for a substantial (8-figure deal) outcome which already puts me in the minority. So no…

Re: Not everything is about money.

Blasphemy! :-)

Re: Working for a startup makes less sense, unless you are into the mission

#48

Post by misthop »

I look at it another way - there are plenty of startups (series A, B) that pay fair industry wages along with equity. If the exit is worth nothing - no huge loss, I made what I should have. If there is a good/great exit - awesome, I pocket 1-10 years worth of salary on top of a fair salary.

Could I make more with salary+rsu at a FAANG? possibly, maybe even probably - but then I would have to work at a FAANG

Re: Working for a startup makes less sense, unless you are into the mission

#49

Post by ankit219 »

zapita wrote: post #42
acconrad wrote: post #21

As someone who was a 1st engineer of a startup that successfully exited I had what would be considered a good payout. When looking over the course of my career, however, it simply made up for the reduced salary I took for the years I worked there. It was a net-neutral outcome to be the 1st engineer at a startup that actually exited for a substantial (8-figure deal) outcome which already puts me in the minority. So no…

There is still a financial aspect though: that rapid increase in responsibility and experience most probably translated to higher income at your next jobs. And there is a compounding effect each time you change jobs, so the earlier you were in your career when you worked at a startup, the more you gain from it financially over the course of your career. I think we have selection bias on Hacker News because many of th…

Assuming he is from India, there might not be a translation to a high income job. Salaries in India frequently follow a %age increase in the last role, regardless of the position they are hiring for. There are some exceptions, like the global cos which would pay according to job, and some startups which would have salary bands, but mostly, its about how much can we increase from the last role.

Re: Working for a startup makes less sense, unless you are into the mission

#50

Post by vtange »

acconrad wrote: post #21

As someone who was a 1st engineer of a startup that successfully exited I had what would be considered a good payout. When looking over the course of my career, however, it simply made up for the reduced salary I took for the years I worked there. It was a net-neutral outcome to be the 1st engineer at a startup that actually exited for a substantial (8-figure deal) outcome which already puts me in the minority. So no…

But you could arguably get the same result working for a larger company, getting paid market rate for a 9-to-5, and putting in a few more hours at home working on open source or managing a solo side project from scratch.

You might even end up with a side project that earns you passive income in the end if you're lucky, but you had to be lucky to get a "break-even" payout from startup-life anyways as you have said.

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