As a former startup and FANG employee, I absolutely agree that working at a startup AS AN EMPLOYEE is not financially beneficial. The only ways to really make money as a non-founder employee at a startup is by being lucky enough to be at a Google/FB/Uber type exit for billions (not millions), or coming in as senior leadership (VP/CxO type role) AFTER the startup has gone through its growing pains, determined product market fit, and is seeing good traction. This is honestly as it should be - as an employee you are taking far less risk than founders (and to be fair, than most investors as well), so you shouldn't expect a massive windfall. As some people have commented, reason the cost benefit is out of whack is mainly due to recently inflated salaries (over the last few years) that came about as the result of FB/Google poaching wars, so this is a relatively recent development, and who knows how long it may last.
Working for a startup makes less sense, unless you are into the mission
171–180 of 269 posts
Re: Working for a startup makes less sense, unless you are into the mission
#172Honest question: Why does every blog post that talks about working with a startup, always pick Facebook and Google for the comparison? Both these companies are extreme outliers (probably in the history of business!). Their outsized pay comes from their outsized profits, which comes from selling your data. I find it very ironic, that these very same people who diss startups love dissing Google and FB as being evil, bu…
^Thanks for the comments. As I said there is a spectrum of startups. You have to make your own judgement - especially if you're joining 3-5 person startups without any funding. But that said the median Valley-based Series A/B/C startup would probably offer a competitive package or atleast they'll be upfront about it and not waste your time.
On a side note - any tom, dick and harry can create a angel.co profile. I would discount 90% of them there. Basic due diligence - crunchable, SEC filings (on funding), any press articles, digging into founders' linkedin profiles should help you separate the wheat from the chaff.
Re: Working for a startup makes less sense, unless you are into the mission
#173This is something I'm pondering a lot these days. I am the co-founder of a startup that I'm in the process of winding down. We had some success but ultimately never gained sustainable market traction in a very hard to penetrate market.
Having bootstrapped the company to revenue and kept things very lean and with costs and employee salaries funded initially through personal savings and a little bit of debt, I didn't take a dime of salary for myself in over 3 years.
I always told myself the experience would be incredibly valuable regardless of what ultimately happened, knowing the chances of success were slim but opting to go for it anyway, because how else was real change effected? Yes, I've definitely learned a lot, would do things very differently a second time round and have gotten some experiences (good and bad) that I wouldn't otherwise have had, but I'm finding it hard to see much upside in the past 3 years right now. I see my colleagues doing well in their careers and seemingly every other startup founder I've met, crushing it, although I have also seen a few failures over time.
I've tried to sell what's left of the company but have had little interest. I've applied to jobs in the Bay Area but it's clear hiring managers don't know quite what box to put me in and would rather go with the brand name and "safer" candidates. Yes I'm being a little selective in where I want to work, but it's hard not to stick to your ideals after standing by them for the past 3 years.
Hopefully it'll all be part of a glorious master plan that becomes apparent in decades to come but at this point who knows! It's definitely given me a better appreciation for the risks that entrepreneurs (including early employees) take and a greater respect for those who do go out and grow something that truly makes the world a better place.
Re: Working for a startup makes less sense, unless you are into the mission
#174Earlier quoted context omitted.
Thanks for some reasonable(?) numbers. I too often see people here and other places positing that mid-level developers easily net $500k a few years out of college. I've no doubt that some at FAANG companies make that, but those seem very much at the high end. "Total comp" vs "total cost" are different numbers as well - stock, 401k, etc all can add to the final numbers too, but $200-$250k seems a lot more in line with…
I've been told I'm pretty close to top of market in Austin at ~225
That's a great negotiation strategy for a company that doesn't want to pay more. That isn't top of market in Austin.
Re: Working for a startup makes less sense, unless you are into the mission
#175As 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…
I totally agree. The money was bad really really bad and so was dealing with the some of the owners.
But what I learnt in full stack development even though it was just C# and SQL help a lot!
Re: Working for a startup makes less sense, unless you are into the mission
#176The 'actual conversations' section bugs me, he wrote about having his request to use Kotlin rejected, and even though I'm a coder that loves trying new tech, I think it is usually both a very bad decision and investment to either mix languages just for cool points or rewrite your codebase because there's a new hype language. The queue problem sounds more sensible, but it could also be a case of over engineering. Over…
This attitude comes through in other posts, too, e.g. [1] where he says "AMAZON DOES NOT EXPERIMENT ... Facebook contributed React; Google gave us TensorFlow, Kubernetes, and lot more ... But Amazon doesn't give a fuck". But at the PRODUCT level, Amazon seems extremely experimental. E.g. they kind of invented the "cloud computing" space.
Re: Working for a startup makes less sense, unless you are into the mission
#177One thing that gets glossed over a lot with startups is that often times the technical skill level is really low. If you are a young engineer and you are hoping to learn technical skills, be very very careful about which startup you join because you might end up at one where nobody actually has any idea what they are doing. And if you yourself are in the learning phase of your career, you might not have the experienc…
> At least one very important benefit of joining a big, reputable company is that the technical skill level will be good, the career coaching will be good and they probably will even have some sort of education pipeline set up for younger engineers to learn.
This hasn't been my experience, at all. The worst code I have work on has been at the biggest, most prestigious tech company that has employed me.
And the best learning environment was at a startup that could only afford bootcamp grads.
Re: Working for a startup makes less sense, unless you are into the mission
#178Earlier quoted context omitted.
This number makes complete sense. I was a 'key employee' once upon a time - in a startup that had just raised f&f, and I received a FULL 2% (unheard of for Canada). Fast forward through the (usual) reality of 6 rounds of dilution, and my 2% was worth less than 0.02%. If the startup went from a $2M valuation to $200M (as it did) then my take would have been $40K. Do with that what you will.
It sounds like your startup was unfortunately an outlier with respect to the level of dilution experienced. 99% dilution over 6 rounds is far from 'usual reality'. More common is 20% dilution per round.
It was also an outlier, in the sense that it had a valuable exit.
You've only got one lifetime to pull the equity slot machine, hoping that the reels come up all sixes.
Re: Working for a startup makes less sense, unless you are into the mission
#179Earlier 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.
Don't doctors in the US have massive malpractice insurance to pay? I heard it was 6 figures. Got family who are docs there.
Re: Working for a startup makes less sense, unless you are into the mission
#180Earlier quoted context omitted.
I've been told I'm pretty close to top of market in Austin at ~225
That's a great negotiation strategy for a company that doesn't want to pay more. That isn't top of market in Austin.
Okay, but to be fair I said "close to" and the person that told me that was not offering me a job.