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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

#241

Post by dhab »

I agree that there is some learning experience, but I am not sure how valuable that is. My experience working at a startup has been a learning experience on how not to do things (tech) and how wrong management feels - but I actually find that a universal experience within all companies - only in a startup it's more amplified. Theoretically, it might be valuable to know how not to do things, but that's only a small slice in an infinity of options. For the how to actually do things, I think anyone involved in trying to figure that out too - and feel like luck plays a big part.

My thought on this is, life-style business rather funded startup might be better in coming close to big company pay and independence - although myself, I haven't tried that.

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

#242

Post by mharroun »

I feel the need to defend the startup life... so here goes:

I have spent 12 years in the startup space, with an origin in software engineering... so far I have learned:

- how to be an amazing engineer

- how to be a above average IT/Ops/Devops Engineer

- how to build/manage/run QA teams

- how to be a successful project manager

- how to me a successful product manager

- how to manage and work with designers

- how to deal with managing culture within a company

- how to lead and grow product and engineering department from the ground up

- you can get paid VERY well if your skilled

- once your prove yourself you can effect the direction and culture of the entire company (i pull 250+k in cash on top of equity)

My latest position is a CTO of a startup that went from seed to series A in less then a year and triple their valuation, while turning down other CTO offer's from billion dollar valuation startups, and other "head of engineering" like roles from well knows startups... plus manager/director level roles at some of the FAANG companies.

I would of never have learn what I have learned or have grown as quickly as I did if I took a job at a standard "stay in your lane" corporation.

I also get to work on a social mission I truly believe in, and help define, build, and grow the next generation of startup engineers.

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

#243

Post by USNetizen »

NateDad wrote: post #115
USNetizen wrote: post #78

I'm not sure I understand what the real dilemma is here of working for a startup. Being employee #15 is not the same as being in the first 5 hired. You don't take the same risks (or even do the same type of work), so there is obviously less reward when it's time to exit. If you want to get rich, the best way to do it is to start a company yourself - but it sounds like the author didn't want to go that route after try…

I think the author understands exactly what they're talking about, and they're not talking about being employee #1-3. Most people, when they hear "work at a startup", they're talking about being employee #10-30. Not 1-3. There are, clearly, 1/10th as many of the latter, and they're almost all looking for much more skilled people than employees #10-30. I figure this advice is for people who are newer in their careers.…

Then why does he says it's not worth it? You don't get rich being a later employee - I thought that was common knowledge. He's not getting rich, so he thinks working at startups aren't worth it. That's what I get out of this. He didn't take the same risks, so, yeah, he wouldn't get rich - that's my point.

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

#244

Post by pbecotte »

misthop wrote: post #48

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

Fair industry wages INCLUDE the RSU's / Bonuses at larger companies... and is often more then your base salary. You can't say that it is a fair salary PLUS equity unless the fair salary is comparable to BigCo Total Comp.

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

#245

Post by pbecotte »

seem_2211 wrote: post #24
CryoLogic wrote: post #4

The comp packages at big tech companies are becoming insane. In Seattle it's not unreasonable for a senior software engineer with some good connections to be making 200-250k. With that comes life insurance, health insurance for your whole family, disability insurance, etc. That's more in cash AND benefits than a doctor.

I think the question needs to be asked: will this last for the next 25-30 years? I really hope so, but unlike being a doctor, it's a lot more uncertain than we'd like it to be.

So long as there are things that can be done with software that are more profitable then what it costs to hire an engineer there will continue to be upward pressure on engineer salaries. Anecdotally, there are SO MANY things that could be done better with software and the potential upside on those things is SO HIGH, I don't think we are anywhere near that breaking point.

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

#246

Post by pbecotte »

smallgovt wrote: post #58
scarmig wrote: post #36

Earlier quoted context omitted.

High variance investments are typically supposed to be a minority of your portfolio. Startups force you into investing an outsized amount into them. That's not even touching on how the actual value and variance is unknown, and how startups prey on what amount to unsophisticated investors (the workers taking equity).

I agree with all your points, especially that many startups 'prey' on employees who don't really understand how startup economics work. This is why I think it's important to distill general rules of thumb like the one I suggested. This will give employees a realistic perspective when evaluating startup offers. For example, let's say your typical pre-series A 1st engineer hire gets $150K + 1% vested over 4 years. Inst…

Halving it for dilution is not actually enough. Remember that the valuation that an investor is paying is what the investment is worth _to them_. Any investment is worth more as part of a well diversified portfolio. As an employee, you lack that diversification. Even worse, the investors get significant protections built into their investment... preferred shares, board seats, dilution protections.

I would be surprised if the true value (if that were possible to calculate) weren't closer to 1/10th the valuation that investors bought in at.

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

#247

Post by pbecotte »

tresante wrote: post #173

This 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 t…

Having been one yourself very recently, you must be aware that every founder is "crushing it" right up until the put up that blog post about how it didn't work out, right?

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

#248

Post by dawhizkid »

Speaking from experience, it's not worth it even if you are on a mission.

We're in a world where the incumbents have more resources and the talent to execute on big ideas. There's no reason why you need to choose between mission-driven and 1/3 the salary anymore. You can probably achieve bigger things at a big company these days.

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

#249

Post by BenMorganIO »

finnh wrote: post #133
everdev wrote: post #79

Earlier quoted context omitted.

> 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. This is such an important point for people to know when they're joining startups. You're basically investing in the startup. If you're going to be an investor it's good to know what your alternative investments are. If you put $50k in the sto…

8% return on average is abnormally high. But, on the other hand - the chance of retaining even 1% of a startup that exits for >50M is very small. By the time of an exit, almost no engineers will have anywhere near that equity.

Depends on what you're looking at for ETFs and mutual funds, but I think 8%, with a lot of work, CSVs, and tracking performance can be obtained. I know 12% is doable with a lot of work.

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

#250

Post by joshuamorton »

docker_up wrote: post #119

I was employee 40, and approximately 15th engineer of a YC startup where the founders made roughly $50M each, and I made just under $80,000. During this time, had I gone to work at a FANG, I would have probably made a few million dollars just from being a senior software engineer. I have another friend who has been at 3 startups during this time and deeply regrets leaving his FANG job because he also missed out on mi…

>$80,000

This is approximately less than my annual stock grant will be this year at Google, just as a point of comparison. I'm not yet a "Senior" Engineer, just a mid level one.

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