Working at a startup is overrated, both financially and emotionally • Hacker News Board

Re: Working at a startup is overrated, both financially and emotionally

#171

Post by pjbk » Sat, May 22, 2021, 3:52 PM UTC

NeverFade wrote: post #70

hn_throwaway_99 wrote: post #36

I think this is a really good article, but I think that one of the things it misses is that a huge reason the math works out so badly for startup employees is because founders and VCs take the lion's share of the gains. I mean, in my experience at startups, founders typically own around 40% of the equity. The option pool for all other employees is around 10-20%. Now, I certainly believe startup founders deserve far m…

Bingo. As a senior engineer, I get startup offers at the Staff-Principal levels, and even those grant no more than 0.1-0.5% equity at most, on top of ~$180-200k salary. That simply isn't competitive with big established companies like FAANG that offer me $400k+, far better career growth prospects, and far lower risk. For most startups, the equity will be worthless, and the whole company will either shut down or get a…

My humble recommendation: If the company has a valuation or is close to one, ask them to add the necessary money for early exercising to your signing bonus, which is usually pennies on the dollar for them. Then do it the moment you get your options converted to stock.

In that way you minimize any tax risks and at the same time you test how much the company is interested in you and values their employees.

Re: Working at a startup is overrated, both financially and emotionally

#172

Post by catillac » Sat, May 22, 2021, 3:52 PM UTC

rjzzleep wrote: post #146

bostonsre wrote: post #140

Earlier quoted context omitted.

They're not all that bad. I've worked in a horrible startup before and they absolutely forced everyone to work harder with longer hours instead of working smarter. We had a few ~12-16 hour deploys that started after a full work day where the entire engineering department was required to stay and the oncall was brutal 2 week long slogs because no effort was allowed to be put into actually fixing stuff. But on the othe…

If you're saying not all startups are bad, I completely agree with you, but we're talking about a specific kind here. I've worked at some really challenging startups where I also did overtime during deploys(I did get to charge the hours though) in which I learned a lot. AND THEN we actually worked on reducing those issues for the future. They didn't actually make that part of the job either. I could have rejected if…

You’re saying not all startups are bad, just a specific kind are bad: bad startups. Seems tautological.

Re: Working at a startup is overrated, both financially and emotionally

#173

Post by vidarh » Sat, May 22, 2021, 3:52 PM UTC

swensel wrote: post #131

rcruzeiro wrote: post #125

Earlier quoted context omitted.

It's funny how often I got rejected after saying that I am not 24/7 available and that I believe that, if someone needs to have this kind of availability, it means that something in the company is not working and needs to be fixed. The words they used in the rejections were always something like: "we feel like you are not willing to put enough skin in the game" or "everyone else sees the opportunity here is is willin…

I don't like having to be on call 24/7 either and would prefer to work on a team that has 24/7 ops, so the devs don't have to do that. However, in the case of a startup where the devs also do ops, what is the option? I don't understand the part where you said that this means something in the company is not working and needs to be fixed if devs need to be on call. What happens if something goes wrong with an environme…

The option is to compensate for it on top of extra salary to the point where you get enough volunteers for rotation, and/or hire for it.

I had a side gig that very explicitly was being hired to be the guy that gets woken up by PagerDuty. They paid me about an extra $1k/month purely for having my phone on in addition to what they paid me for the time I spent dealing with actual issues. Even then $1k/month was only enough because most of the other work I did for them was explicitly to improve site availability so I could ensure the platform was resilient enough that I rarely got woken up. In effect my hourly rate for being woken up probably translated to $2k-$3k/hour, with it sometimes going half a year between being woken up, before suddenly a bad release might cost me sleep a few nights in a row.

But having felt the stress of this on a full-time basis in the past, without that kind of compensation, I don't think it's cost-effective to have your dev team serve this role vs. having a few people on retainer to at least triage and try the obvious things. You're going to pay for it with staff that do not get proper rest (even when the phone doesn't go off it'll be there at the back of your head).

Re: Working at a startup is overrated, both financially and emotionally

#174

Post by toast0 » Sat, May 22, 2021, 3:54 PM UTC

adflux wrote: post #51

eecc wrote: post #47

Earlier quoted context omitted.

That’s what Wiener suggests in Uncanny Valley, when she describes the windfall when Microsoft bought the GitHub shares she had the option to buy during her time there. It wasn’t life-defining, plus she noticed that many other employees didn’t have enough savings to actually exercise.

Couldnt a bank front the cash to exercise the options? Not familiar with the matter but it seems like an easy thing to get a loan for

If it's to exercise at the close of a deal, the acquirer could also setup a loan too. I had options which were subject to revesting (lame, but worked out ok), and the acquirer fronted the money to exercise everything that wasn't already exercised and then took payments automatically when the chunks vested. Because of the strike prices we had, it didn't feel very risky.

Re: Working at a startup is overrated, both financially and emotionally

#175

Post by neilsharma » Sat, May 22, 2021, 3:54 PM UTC

I've been an early engineer (first 3) at a startup. I didn't stick around long enough to vest for reasons, but in hindsight, it wouldn't have been worth it financially even if I had. They eventually got acquired by a big brand name Silicon Valley company after 4-5 years for an undisclosed amount. My 0.4% plus salary wouldn't even break $200k/year in total unless the company sold for a fair amount above $100M.

Later in my career, I have had offers at seed stage companies. The compensations were marginally better than the one described above, but most still needed to 10-15x in value over 4 years just so the annualized comp would match the base annual comp at various series C/D companies I also had offers at.

Given the risk, often poor culture, rampant inexperience in leadership, and long hours, the upside is only worth it as an early employee if the company is a unicorn. And every founder says their company will be a unicorn...

After starting a few (failed) companies myself, I've come to adopt the mindset that the total equity allocated to the founding team (pre-seed + seed + maybe series A) should be around 20-25%. Everyone after should get 15-20%. In the event of a $100M exit, there should be no scenario in which the founders/investors walk away with a win financially, but the early employees do not. The early employees took the same risk and secured that win, and thus should be rewarded accordingly.

Edit: fixed grammar and re-ordered sections

Re: Working at a startup is overrated, both financially and emotionally

#176

Post by dinkleberg » Sat, May 22, 2021, 3:55 PM UTC

hashkb wrote: post #150

jhbao wrote: post #138

This article isn’t about if you should join a startup vs. a big company. It’s about if you should join a startup vs. a FAANG company, which offers outrageous compensation & benefits. From that perspective, FAANG is the obvious choice 99% of the time. The more and apt comparison would be if you should work at a startup vs. a corporate job at a HP or Qualcomm. At those type of companies, compensation is not competitive…

Does anyone consider FAANG to be startups? I'm confused by your comment.

No, what they are saying is that people present a false dilemma where your options to work are either at a FAANG or at a startup.

Most people work at non-FAANG companies. If you're going to do a write-up on relative merits of working at a startup vs a larger company things are going to lean heavily in favor of the FAANG because the overall risk to compensation is much more favorable.

But if you compare a startup to a more standard tech company then each side will have more pros and cons.

Re: Working at a startup is overrated, both financially and emotionally

#177

Post by tisFine » Sat, May 22, 2021, 3:55 PM UTC

hn_throwaway_99 wrote: post #36

I think this is a really good article, but I think that one of the things it misses is that a huge reason the math works out so badly for startup employees is because founders and VCs take the lion's share of the gains. I mean, in my experience at startups, founders typically own around 40% of the equity. The option pool for all other employees is around 10-20%. Now, I certainly believe startup founders deserve far m…

At least with the founders I’ve worked for it’s hard to agree they are owed that much more.

They fund raised. Poorly.

They offered zero direction, touted a big number as potential revenue.

They traveled ostensibly to fund raise, but usually just brought back personal stories of fun.

While we all slogged on “their” vision, which meant rearranging deck chairs to the march of some alpha non-contributor who can brown nose.

It was effectively our company with some entitled assholes name on the paperwork.

I’m guessing there’s many more founders like that, as I’ve had the “fortune” to work for 3 in the past, versus the one I work for now, who knows the problem space, has worked directly on solutions for years, and shows up everyday with new customers chomping at the bit to sign up.

So I feel confident saying: Most founders are idea people with no skills. Just a used car salesmen personality and a richer network.

Re: Working at a startup is overrated, both financially and emotionally

#178

Post by ryanSrich » Sat, May 22, 2021, 3:56 PM UTC

I’m biased because I run a startup and have only ever worked at startups. But I’d say it basically comes down to different strokes.

If you’re in it just for the money AND you have the background and interviewing skills to get a job at a FAANG then you’re better off doing that, you’ll make far more money.

For me though, there’s not many salaries that don’t end in “million” that you could pay me to work at a FAANG. Not only because I mentally couldn’t deal with the people (see Apple’s latest debacle), but because your impact is essentially meaningless. Working on some tiny little fraction of a fraction of a feature means I’d basically have to not give a shit about my job.

At that point you’re just a wage slave. A well paid one, sure.

Additionally, building a successful company is one of the most rewarding things you can do. True American capitalism is a thing of beauty. Taking an idea, building a product, and creating value. Working at a startup is a good first step in building your own.

Re: Working at a startup is overrated, both financially and emotionally

#179

Post by bdcravens » Sat, May 22, 2021, 3:56 PM UTC

hashkb wrote: post #150

jhbao wrote: post #138

This article isn’t about if you should join a startup vs. a big company. It’s about if you should join a startup vs. a FAANG company, which offers outrageous compensation & benefits. From that perspective, FAANG is the obvious choice 99% of the time. The more and apt comparison would be if you should work at a startup vs. a corporate job at a HP or Qualcomm. At those type of companies, compensation is not competitive…

Does anyone consider FAANG to be startups? I'm confused by your comment.

No, and I don't think that's the parent is suggesting that. They are saying if you are looking for a challenging, highly rewarding role, FAANG is a better fit than startups.

Re: Working at a startup is overrated, both financially and emotionally

#180

Post by PragmaticPulp » Sat, May 22, 2021, 3:57 PM UTC

jhbao wrote: post #138

This article isn’t about if you should join a startup vs. a big company. It’s about if you should join a startup vs. a FAANG company, which offers outrageous compensation & benefits. From that perspective, FAANG is the obvious choice 99% of the time. The more and apt comparison would be if you should work at a startup vs. a corporate job at a HP or Qualcomm. At those type of companies, compensation is not competitive…

I'm part of a mentoring group for recent college grads. One of our biggest challenges is that much of the conversation on HN, Twitter, Blind, and other sites assumes that FAANG admission is guaranteed.

This becomes a major struggle for juniors when they realize that there aren't any FAANG offices in their location. Many others apply to FAANG but don't receive offers, which is devastating if every HN comment, medium article, and Tweet they read revolves around getting into FAANG.

It's a strange situation to have to console junior engineers about their "paltry" $130K compensation at comfortable 9-5 jobs in low cost of living cities.

I have to remind a lot of people that the FAANG interview acceptance rate is very, very small. This idea that everyone can call up FAANg and get a $200K+ job in their city is not helpful to anyone but top candidates in a few select cities.