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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

#341

Post by halsom »

atoav wrote: post #271
planet-and-halo wrote: post #231

Earlier quoted context omitted.

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.

And what is true for the factory is also true for a film set. The thing many dont realize is: If you have a good plan and follow it, you will very often have more freedom to try out new things than when your planning is chaotic or non-existent — because then literally every step is made out of fear, out of panic, to avoid pain or because other decisions froced you into something. I say this because startups would arg…

Your discounting of the budget factor among many others is brave. Many hardworking directors with high expectations have very different priorities, some which are simply big distractions from producing a quality production. This “be relaxed and chill to make a good film” idea is delusional, but its not necessarily wrong as much as it is just nonsense. And the ability to merely plan and execute plans, regardless how good they are, depends tremendously and straightforwardly on budget.

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

#342

Post by analyst74 »

SilurianWenlock wrote: post #294
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…

Why do HP and Qualcomm want to offshore but FAANGs dont?

The job of an outsourced position and senior+ IC role in top tech firms are fundamentally different. You can't survive just be churning through ticket backlogs. Sometimes you are expect to come up with initiatives, gather support and resources, deliver said initiatives that have a measurable impact to a global company without much guidance or help from your boss; at higher IC tracks, the kind of initiatives you lead can have meaningful impact to a whole sector.

These expectations, in a more traditional company, is normally reserved for positions much higher up in the org chart.

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

#343

Post by ferdowsi »

zebnyc wrote: post #290

Unrelated, but does anyone know what happens to employee options if there is an exit before the employee's start date?

Depends if the employee has signed an options agreement and those options have been approved by the board.

At a recent gig I started up a few weeks before an exit. My options had not yet officially been granted by the board. My company granted my equity but they didn't have to.

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

#344

Post by dang »

This article is responding to the romantic version of the startup story that was popular 10-15 years ago, in the early heyday of YC and HN. In that sense it is 10 years out of date.

There has been since at least one major wave, which was characterized by disillusionment and cynicism about startups ("just buy a lottery ticket", "startup equity isn't worth the paper it's printed on", etc.). This became standard fare on HN and until recently was probably the dominant view.

That has become old hat in its own right—you can tell that such a wave is in its later stages when the comments become predictable, and then compensate for that by getting snarkier. When information gets worn out through repetition, comments have to add in extra spice to get interesting again—though not necessarily the good form of 'interesting'.

It's too soon to tell but I think we might be at the beginning of another wave now—a more balanced weighing of pros and cons. Many comments in this thread are good examples of that.

There's another dynamic too, which I've not yet seen anyone comment on: these waves are staggered geographically. This became obvious to me when looking at the geography of HN comments (judging by IP geolocation). These waves don't get started and then subside in lockstep all over the world—rather, they exist in different stages in different locations. It took years for the romantic story to make its way to certain locations, and those places are now in the early stages of the cynical wave. Other parts of the world are still in the crest of the romantic phase. This creates unfortunate misunderstandings where someone in one of those areas posts an enthusiastic startup story, of the kind that was popular on HN in say 2008, and then gets blasted with flames by people in locations where the cynical wave is strong.

I hope I'm guessing correctly that the next wave is more balanced and nuanced, because I think we need to look beyond "startups: yay or nay" to asking when they make sense, when they don't, and what changes the ecosystem could make to make them make more sense...if that makes sense.

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

#345

Post by NeverFade »

comp_throw7 wrote: post #292
NeverFade wrote: post #159

Earlier quoted context omitted.

> Now... if you exercise the option, that is a different story. You exercise if you leave, and startup IPOs can take many years, and most startups don't have a compelling options package for you after the first 4 years anyway. So a senior engineer who got their full 4 year equity and wants to leave, which is the most typical scenario, will indeed have to exercise and get hit by the tax bill.

You don't _have_ to exercise if you leave. That part is totally optional - in fact, the company will probably be quite happy for you to leave without exercising.

...in which case I just worked for 4 years for less than half the total compensation I'd receive in Big Tech.

If the plan is to completely give up on my equity, why work at a startup at all?

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

#346

Post by x0x0 »

Eridrus wrote: post #339
achillesheels wrote: post #307

Earlier quoted context omitted.

Why should leaders and team builders be more “equitable” than what is transactionally afforded by their diligent appreciation of their assets? How is the utility of money not best suited for those who created something from nothing versus those who entered into the tent after it was pitched? Aren’t there gradients of personal ambition being demonstrated between the two parties? If so, wouldn’t society be abler if the…

We're in a thread talking about how equity compensation at startups is generally not sufficient to overcome the pay cut that folks would take from working at a top tier tech company, so even if you come at this from a purely transactional perspective, you may want to be less stingy with equity. You can do whatever you want of course, but I think people should ask themselves if trying to hold onto all the returns is h…

> equity compensation at startups is generally not sufficient to overcome the pay cut

... so don't take the job. Everything will naturally sort itself out -- a startup will increase their grants, hire different people, or not hire and fail. :shrug:

This thread sure looks like it's full of people who can't get that well paid job at google, are taking jobs at less demanding employers out of necessity, and are mad about it. Otherwise, we're living through one of the absolutely hottest markets for engineering talent we've ever seen, so getting a new job is always an option if you're worth the money.

As for founder vs employee risk... certainly at my company, every employee except for the founders walked into a six figure cash comp, fully paid health insurance, and a runway that's never fallen below 12 months.

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

#347

Post by NeverFade »

throwaway78123 wrote: post #278
NeverFade wrote: post #159

Earlier quoted context omitted.

> Now... if you exercise the option, that is a different story. You exercise if you leave, and startup IPOs can take many years, and most startups don't have a compelling options package for you after the first 4 years anyway. So a senior engineer who got their full 4 year equity and wants to leave, which is the most typical scenario, will indeed have to exercise and get hit by the tax bill.

You only be hit by a tax bill if you chose to exercise the option, which only make sense if the stock is worth more than the strike. If you are "given" something that is worth more than $1, the IRS will want a piece of it. If you worked at a startup (not a small business), the most likely outcomes after 4 years is either 1) Company went bust, 2) Company grew. The option protects you from the not having to pay anythin…

> If you worked at a startup (not a small business), the most likely outcomes after 4 years is either 1) Company went bust, 2) Company grew.

Right, so the bottom line is this:

After 4 years working at the startup, unless it already went bust, you will typically want to exercise, and then you'll get hit by a big tax bill for purchasing a security which is still very likely to end up at zero.

It's a risk no matter how you look at it. Unless you happen to work at a startup that became a unicorn, which is very rare, you will end up paying good money for something that may be entirely worthless.

So in the best case scenario, you take a risk for an upside that may put your comp around the same level as what you'd get for simply working for FAANG. Worst case, you pay a big tax bill that drops your comp even farther below what your friends at FAANG are making, which is already going to be twice or more to begin with.

Surely you see the problem here, especially for risk-averse engineers.

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

#348

Post by JoeAltmaier »

jt2190 wrote: post #326
JoeAltmaier wrote: post #187

Earlier quoted context omitted.

Everybody involved is taking some fraction of that risk. "No raises until we're profitable", "Here's stock to make up for the lower pay", "Lets cut benefits again to increase our runway" are all tall tales that essentially squeeze cash out of employees with empty promises. When there's no way it will every even make up for the sacrifices of the employees, all those demands are empty noises. Just a way to fool folks i…

> Everybody involved is taking some fraction of that risk. I think that by "that risk" you're talking about "the overall increased risk of investing in a new company". I deliberately use the word investing because that's how employees should think about their participation in a startup: They're usually giving up something now... salary, extra work hours... in exchange for some possible upside in the future, often in…

It's been repeated again and again, that the supposed equity bait is almost never worth it. Its just a story to string folks along. Since the 2000's, the VCs and founders have learned to squeeze almost every drop out of any equity event, leaving crumbs for everyone else. It's disingenuous to repeat the con story as if that explains everything.

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

#349

Post by zepto »

Grimm1 wrote: post #340
zepto wrote: post #215

Earlier quoted context omitted.

> I feel like you have to push back against things instead of just going with it. In a bad startup you typically can’t ‘push back’ meaningfully. If the management doesn’t understand how to treat people well, people pushing back won’t educate them, and employees have to get work done to justify their presence rather than fighting battles all the time.

In that case, you leave. If you're a decent engineer you'll find work in a few weeks and any other startup will be happy to have you. Unfortunately for non engineers I understand that may be more difficult and for those starting out too. So matter of perspective definitely since engineers aren't the only employees at a startup, but I would hope with due dilligence that is caught while you're interviewing.

> In that case, you leave.

Depending on how long it takes you to get to this point, it could have cost you a great deal in lost opportunity and benefits.

The fact that you can get another job is irrelevant to that.

Which is the point of this overall thread - you could easily have been better off at an established company.

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