Actually, my observation over the last 20 years of being a venture investor, bigco acquirer and startup CEO (including at a unicorn) is that the risk-adjusted $ compensation is the same at a startup and at bigco. Startups just have more beta in the comp. You learn a lot more at a startup and hence it's the experience you want if you hope to do your own startup. If you just care about short-term $ then absolutely stay at bigco. If you want experiences unavailable at bigcos and are willing to take the chance of making less, but also the chance of making 10X+ more, do startups.
Working for a startup makes less sense
141–150 of 392 posts
Re: Working for a startup makes less sense
#142> And, to be clear, I’m not saying that one should or should not place money or perks above everything
Why not?
The whole premise of venture capitalism is that money is an appropriate common denominator for what is valuable in the world, that the best way to change the world is through establishing a legal entity whose goal is to make money, that once you have lots of money the best thing you can do is to put that money to further use instead of directly engaging your own technical skills.
Why do we tell potential employees at startups "money isn't everything" but potential founders "you'll make more money this way" and potential funders "please, sir, some money"?
The startup ecosystem is a way for venture capitalists to get richer, and to incentivize the people who can directly help them get richer. Evidently it's not enough - so maybe they should incentivize the people who help them indirectly get richer. If money isn't everything, don't join a startup or a big company, go to grad school, where you can actually work on whatever you want. Or go work for a big company for several years and retire, or find a half-time consulting gig, or something.
Re: Working for a startup makes less sense
#143Earlier quoted context omitted.
I've had kind of the opposite experience. At the startup we were really sluggish it was hard to learn anything because we were jumping into any possible business opportunity before even thinking about ROI because money was always tight. 80% of the time was wasted supporting clients and fixing bugs that were due to the fact that the product was shipped too early. I think the biggest difference is money. A well funded…
The difference is whether you see learning to do meaningful things on a shoestring budget to be itself a useful skill. Boeing won't care if you save the project $5k by spending a week of your time coming up with a clever workaround. The week was more important than the $5k. Same for a high level role generally. But not getting work done for a week because your boss won't approve a $500 purchase... that would be frust…
> Boeing won't care if you save the project $5k by spending a week of your time coming up with a clever workaround.
I'm confused what you're getting at here. $5k/week is $260k/y (or a bit less counting vacations and holidays) and the fully-loaded cost of an engineer at a startup is typically more than that. Then consider how high opportunity costs typically are at startups, and I expect most startups would view your spending a week to avoid a one-time $5k expense to be a bad tradeoff.
Re: Working for a startup makes less sense
#144I've had a related discussion with a few VCs in recent months. Some kinds of startups are effectively impossible to build given current structural constraints on financing them, creating an adverse selection for startups that fit the classic model rather than startups with the highest expected ROI. Broadly speaking, engineers will work at a discount to market-clearing wages of maybe 20% if they really like the startu…
> Some kinds of startups are effectively impossible to build given current structural constraints on financing them There are a lot of things that are impossible to raise money for, that are possible to bootstrap. If you're willing to work on something for 5 or 6 years without getting paid, there are lots of opportunities that open up that have high barrier to entry because they essentially can't be copied by venture…
If you'd like to share, I'm interested in the types.....
Re: Working for a startup makes less sense
#145Earlier quoted context omitted.
>watching them get squeezed by big tech companies offering sky high comp fills me with glee. Enjoy your new life as a corporate drone! Note to the salty drones in the comments below: I started a business that was passively profitable for years and now pretty much just work on what interests me
But it's not your whole life because we're living longer and it's enough money to retire earlier. Suck up the drone life, retire early and spend 50 years with no boss, no customers, just tooling away on whatever you please.
I find big companies to be incredibly frustrating. It is so hard to get anything done. As a result I have gravitated towards startups. I know I have made less money but I love the daily feeling of having an impact.
I think startups are great for junior employees because you learn so much so quickly. Eventually if you want to be successful in startups you need to start your own startup. The payout on 25% ownership at $10M or $20M is not bad and lots more companies can buy that sized company than a billion dollar one.
Re: Working for a startup makes less sense
#146Strongly agree with this. I just did about seven weeks of interviewing in NYC for senior iOS roles, at both startups and big tech companies. To be frank, it was a total shitshow. Especially on the startup side. Here’s some of the bullshit I faced interviewing at early stage companies before accepting an offer literally 2.5x as high as the (multiple) offers that startups made. 1. Shitty equity: one startup wanted me t…
> Fuck being an employee for a startup so they can bleed you dry. Could not agree more, and this is my stance which I will happily share with anyone who cares to listen. I was first employee (and only engineer) at a startup which dangled 'equity' in front of me but didn't deliver. Contract was so full of gotchas that the path to me seeing some sort of actual payoff was astronomically unlikely. 90 day exercise windows…
Liquidation preferences for investors putting actual cash into a business exist for a reason. Suppose I have a company idea, maybe an early prototype and manage to raise $2MM at $10MM post-money valuation. The investors have a 20% stake for their investment.
If I decide the next day, “Nah, it’s not going to work; let’s close the company and distribute the assets to the shareholders,” it would be manifestly unfair for the 80% shareholders to take $1.6MM of the $2MM in the bank and give the VCs back the $400K that represents their 20% stake in the bank account.
Liquidation preferences ensure that the first $2MM that comes out goes to them.
Re: Working for a startup makes less sense
#147Strongly agree with this. I just did about seven weeks of interviewing in NYC for senior iOS roles, at both startups and big tech companies. To be frank, it was a total shitshow. Especially on the startup side. Here’s some of the bullshit I faced interviewing at early stage companies before accepting an offer literally 2.5x as high as the (multiple) offers that startups made. 1. Shitty equity: one startup wanted me t…
The startups should have a higher bar for hiring. A bad senior hire is much harder for a startup to absorb.
Re: Working for a startup makes less sense
#148Strongly agree with this. I just did about seven weeks of interviewing in NYC for senior iOS roles, at both startups and big tech companies. To be frank, it was a total shitshow. Especially on the startup side. Here’s some of the bullshit I faced interviewing at early stage companies before accepting an offer literally 2.5x as high as the (multiple) offers that startups made. 1. Shitty equity: one startup wanted me t…
Well, if the only thing you care about is compensation and work/life balance then of course, you should never work at a startup. There can be benefits though, arguably better personal development, a broader view of the entire tech stack, and potentially more personal satisfaction. Of course, if the difference is 2.5x then it's a no brainer.. I wouldn't take more than a 20-30% cut to work at a startup. One thing I abs…
> There can be benefits though, arguably better personal development, a broader view of the entire tech stack, and potentially more personal satisfaction.
There's also:
1. Shitty bosses (this and the following can be found in any kind of company)
2. Being promised one thing and then being screwed over later. How many companies have screwed over their employees of stock options or those holding existing stock?
3. Terrible tech stack / less personal satisfaction -- especially if the startup hires lousy people and value code production over smarts.
4. Management defined engineering -- when managers make important technical decisions instead of engineers. ("We've signed up for service X, please integrate with them regardless of your thoughts on the matter").
Re: Working for a startup makes less sense
#149I feel like it is hard for people to say what they truly love before they have at least $1M in their bank account. If you have FU money, your view on working at a FAANG vs building a startup can change. You will find it easier to know what you truly LOVE.
I'm glad all the great artists, musicians, writers, theorists, scientists, teachers, and inventors throughout history didn't read this post.
Re: Working for a startup makes less sense
#150Earlier quoted context omitted.
Rough numbers, but I'm thinking roughly $200k, $230k, $260k. It's an order of magnitude estimate, take that for what it's worth. If the new grad is instead investing $300k, the calculus remains about the same.
I think it's fair to say that someone who can get that sort of job right out of college probably should. However, I'm not sure that the vast majority of engineers can do that.
When I started at Google my first three full years were $213k, $233k, $287k (https://www.jefftk.com/money). Some of this was stock growth (which is not guaranteed and I was lucky there) but I think this sort of pay is reasonably typical for people who are considering a FAANG offer.