Working at a startup is overrated, both financially and emotionally

The conditional chance of picking a successful company to join is way higher than 2%, or whatever the median success rate of all startups is. In particular, I think really intellectually curious, ambitious, hard-working people can, for the most part, identify each other. This is really different from reading about valuations or what other people think in the news, which leads to a lot more noise. If you meet a bunch of people at the company, you can assess the their caliber for yourself.

While it's not a perfect predictor of success, it's at least the case that such people are usually working on cool, worthy projects. Based on this, it's possible to get conviction on a group before their likely success becomes common knowledge—granted it's getting harder to do this because of how much money is floating around.

To put it another way, there are a handful of companies out there right now at Series A/Series B with a dense accumulation of talent. It's probably a reasonable bet to try and join them before they hit unicorn valuations, when room for growth is smaller. And in these cases, you could be #10-#40 at a relatively de-risked company and have a really great outcome.

On the flip side, if you even remotely enjoy learning and autonomy, working at Google/Apple/Amazon/etc is probably a great way to set yourself up for existential frustration. It's not even a great financial proposition. Even at $500k/yr, it's 20 years—a whole working life—to make it to $10m, the hypothetical number from the article. Even if your first startup doesn't make it after 2-3 years, you can try again a few times and still come out ahead. This is a classic pg argument—I can't remember which essay—but the point of a startup is to compress decades of working life.

Caveat: I happened to join a startup whose success changed my life both financially and in terms of career trajectory. I'm very biased. But this is also why I feel passionately that this article's advice is bad.

I’ve worked the whole gamut from FAANG to 1st employee (and founder of a side project startup) and I just don’t know how they compete anymore.

We need innovation and new companies.

But for my own side project I can’t imagine hiring someone. I either are hiring if we become wildly successful or we just get acquired with our founding team and still make an outsized outcome.

It’s a grim outlook for startups but we need them

One thing I think people miss is that founding a startup, or working at an early-stage startup, belongs to a class of financially irrational aspirations that includes other things like rock-star, novelist, actor, and professional athlete. For all these careers, the financial rewards are distributed according to a power law. A few superstars take a massively disproportionate share of rewards while the expected ROI is negative across all aspirants.

I stress "financial" rewards because for many of these pursuits there are intangible rewards that make it worth it even for the "losers". I spent most of my 20s playing in rock bands and legitimately trying, and failing, to "make it". During that time I had a day job, so I was working constantly either at the band or at my day job, and really not doing much else. I wouldn't trade that time in my life for anything, despite the fact that it cost me money both out-of-pocket and in opportunity cost, and only perhaps a few hundred people now remember my band. On the other hand, I had no family to support during that time, and I was willing to live a low-rent bohemian lifestyle.

Early-stage startups are probably the same: the camaraderie, the esprit-de-corps, and the joy of building things are the reward.

It's important to enter into these risky pursuits with your eyes open and understand that the most important rewards you receive won't be financial. If those intangibles aren't important to you, or if the base level of financial security you need is higher than that of a bohemian lifestyle, then you should look for something else.