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Working at a startup is overrated, both financially and emotionally

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

#251

Post by vinay_ys »

robomartin wrote: post #222
vinay_ys wrote: post #155

Earlier quoted context omitted.

If you are the second employee (first engineer) at a tech startup with a solo founder company, most likely you can get more than this. Nobody will give you more than what they have to unless you educate yourself and negotiate on your own behalf. You are taking the same risks as the founder and you being there is directly helping the founder raise funds and hire other engineers. Don't under-value yourself. Your previo…

> You are taking the same risks as the founder Not even close. You can quit and go get another job any second of any day with zero consequences. You have zero financial responsibility or obligations to the investors. You have zero responsibilities and obligations to clients/customers. You have zero obligations to financial institutions (banks, loans). You have zero or little reputation on the line in the industry bei…

> Don’t work for less than you are worth.

The OP's question was about how to do that and my entire response was to that question.

> Assume options are worthless.

That's bad advise for senior engineers with relevant experience. No startup I know can afford to offer cash compensation that matches the cash+stock comp from previous employment. Startup stocks have value – you just have to get better at figuring out its risk adjusted value and consider it for that worth.

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

#252

Post by derekdahmer »

wgyn wrote: post #242

This is compellingly well-written but wrong, in my opinion. There's been a steady trickle of articles on the top of Hacker News that make essentially the same argument: your odds of choosing a successful startup are miniscule (2% in this one). I think this does people considering startups a disservice. The conditional chance of picking a successful company to join is way higher than 2%, or whatever the median success…

> Even at $500k/yr, it's 20 years—a whole working life—to make it to $10m

Just one nitpick here, FAANG companies have 2-5x’d in the last five years so with $250k of equity in this example would have had an actual comp of $750k-1.5m/year which would leave you set-for-life rich in just 5-10 years no matter which one you chose.

If you have access to a FAANG job and are optimizing for expected return you have to ask yourself - is it more likely this billion dollar company doubles in value or a seed stage startup that you have 0.5% of becomes a billion dollar company?

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

#253

Post by jimmont »

planet-and-halo wrote: post #231
atoav wrote: post #218

Earlier quoted context omitted.

> 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 crazy thing is, they think they can just throw manhours at bad planning and somehow make it work. You can literally plan well, have a good life and still come out ahead of these chaotic organizations that make everybody run in circles out of pure panic. I have seen this so often in fi…

I read a book by a consultant who said he could immediately gauge how well a factory was operating by looking at how relaxed the average workers were. The most efficient factories almost looked like nothing was happening, because they had a smooth and efficient process and knew how to calmly handle emergencies.

if you can share the title/author of the book please do, I've seen this pattern in work as well

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

#254

Post by jdhdhdush7363 »

nt2h9uh238h wrote: post #151

Startups are the most efficient organisations in the economy. Because you have to get shit done and can't fuck around. A lot of people love to fuck around and do "fake work". Only output and impact matter. Hard work is "hard", and at startups you can't hide "not working". It sounds pedantic but that's quite the reality, a lot of people just don't know what "work" feels like, and don't want to do it.

Lol! It is possible to work hard but expend time and effort in the wrong things. Startups, especially if founding teams fo not have deep industry experience, spend a lot of time reinventing the wheel and rediscovering various footguns because they often cannot afford experienced professionals who know better. So there is quite a bit of wasted motion at startups.

Working hard != working smart

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

#255

Post by [deleted] »

hellcow wrote: post #83
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…

> what founders risk in terms of opportunity costs and lower wages is usually only slightly more than very early stage employees Maybe this is different for others, but my co-founder and I spent 2 years bootstrapping before we got our first customer. We gave up 2 years of wages and consumed our savings to do this with no assurance of success, and even after that first customer it was another full year before we had a…

[deleted]

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

#256

Post by [deleted] »

rjzzleep wrote: post #101
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…

From my own household/wife I have a person who's worked her ass off for a hugely incompetent CEO who has a majority stake. When I say ass off I mean 12-14 hours a day even on weekends. A promise of unlimited holidays and then coercing all employees to work during government mandated holidays and now he's trying to scam her out of her less than 1% options by coercing her to write a maternity leave policy that would ma…

[deleted]

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

#257

Post by fastball »

grogenaut wrote: post #241
fastball wrote: post #145

Earlier quoted context omitted.

Really depends on the job market though. If the startup goes belly up but you were making good money in the interim and you can quickly find a new job, it's not much risk. A founder who eats in to savings and goes unpaid for two years is on an entirely different level of risk profile. But yes, if your primary concern is job security, in general you should not be working for a startup, regardless of how many points yo…

I'm not arguing that it isn't more risky for the founder. I'm saying that the payoff potential that remains esp when you look at the pool of startups, is almost never worth it compared to a job at a bigco, even at the top end. Eg this is me explaining why I wouldn't work at a startup as I shoulder more risk and very very low chance at a payoff better than I could get at a bigco, and worse case you spend 5 more years…

I think the key thing missing from your analysis is that some (most?) people aren't optimizing their careers for minimal risk and maximal pay. There are a great many other factors at play.

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

#258

Post by taurath »

softwaredoug wrote: post #193

10+ years ago part of the allure of tech startups was they really “got” what made technologists jobs fulfilling. Back then companies had management that had no idea how to build high quality software. There was lots of waterfall like process and TPS report style bureacracy. Fast forward to the present. FAANG companies dominate the economy. They pay well, offer upside in actual stock, AND most crucially: they do a bet…

The current stereotype among my circle in FAANG is that they move slowly and you’re more likely to be working on something dreadfully boring and also have few opportunities to branch out. That’s what keeps a lot of people going to startups though I agree with the OP the financial and work life arrangement gets less and less ideal.

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

#259

Post by NationalPark »

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…

Most tech startups seem to model their hiring practices and organization around FAANG companies (technical screens, OKRs, Agile, reliability teams, etc.) so I think the comparison is actually more interesting if you leave out the "normal" jobs. Since a lot of the skills are transferrable, you're more likely to have the option of either rather than one or the other.
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