I’ve worked in tech for well over a decade now. Because of this I get questions all the time from friends, random LinkedIn connections and sometimes other people’s kids about career path and whether startup experience is valuable for the old (or young!) resume. I’m always in favor of tech unless you’re pursuing a professional degree or have a passion like writing or music that you have to get out of your system. If any of the latter, I recommend having a side hustle or day job but that’s a topic for another post.
All millennials should work in tech if they can manage it. Once you’re in it’s an oh so sweet and thrilling experience. It could also be extremely lucrative if you win big. I’m going to detail the pros of working in a startup this post so I can refer people here rather than explaining over a cup of coffee or a meal (not that I don’t love free things, time is the most valuable commodity to me now). Most of you are familiar with the cons of startup life so I’ll save it for another post.
Pros of Startup Life
I’m going to keep the pros section very general. It’s important to note that most people I talk to assume all startups are the same. That’s crazy talk. If you think about it, that’s like saying all non-startup jobs or companies are the same. Got it? Okay, cool.
Reasons I think you should work at a startup:
- Learning – Your contributions or lack thereof are extremely visible so you’re forced to learn and perform. There’s no better environment to learn than a startup because there’s literally nowhere to hide. Startups run lean so there’s no opportunity for exuberance or waste and you’re going to be a hyper efficient machine whether you like it or not. Every dollar and every hour is focused on activities that will (hopefully) drive the business toward success. Early in your career everyone is susceptible to influences within the workplace whether by your direct supervisor or a company culture. If your startup manager is relentless about prioritizing efficiency + impact and your work culture promotes a powerful work-hard-work-smart mantra so commonplace in startups, you’re going to learn that style and operate very differently than an employee at a big company. You’ll also be involved or have the ability to contribute to most areas of the business.
- Growth – In the startup world you grow up faster. By the time you’re on your second or third startup you’ll have seen countless botched product launches, hundreds of frustrated user emails, multiple failed fundraising efforts and tons of poor management decisions. You’ll also develop a nose for BS and learn not to drink the koolaid. That sounds horrible, right? It’s actually the opposite. By learning from these experiences in a compressed timeline you’re going to grow super quickly. Because startups are all about moving fast, breaking things and continuous testing, you’re in a constant mode of accelerated growth. Every mistake your startup survives will make you that much stronger. There’s also probably no one to double-check your work as everyone’s busy wearing multiple hats so you’re on your own. You’ll learn to be detail-oriented where it counts because there’s no safety net. It’s for these reasons that I refer to startups as a hyperbaric time chamber for your career; you’ll grow faster than you’re ready to so embrace the pain!
- Data & Transparency – Remember how I mentioned there’s nowhere to hide? The good news is this goes both ways. You’re going to know how your startup is performing at all times. There are rarely any surprise layoffs because startup founders are incentivized to be transparent about the company’s performance. If things are going well they’ll want to validate to you that you were right to take a chance on a small company with a big mission. If things are going badly, your CEO is going to let you know so you work harder to help the company catch up. You’ll never get this level of transparency at a big company. The best part is you can directly correlate your company’s tactics to overall results, providing a valuable feedback loop you won’t get at bigger companies. In a larger organization, there’s so much activity and noise that it’ll be hard to understand what’s driving results.
- Access – I’d be willing to bet most of you reading this wouldn’t be able to send an email to the C-suite of your company or casually drop by their office to sit down and trade ideas for 30 minutes. One of the best perks of startup life is your unrestricted access to all members of your leadership team. You’ll be able to interface directly with the individuals who are developing product, brokering deals and securing financing for your company. If you were selective about joining the right founders it’s going to pay off big and for a long time. Access is a severely underrated aspect of working in this type of environment and I encourage everyone who has the ability to make use of office hours to do so religiously. If for no other reason your executive team will know who you are and this type of visibility is a treasured commodity in larger businesses for a reason.
- Relationships & Networking – Startup superstars go on to work for super star companies. Your time in the trenches with your startup peers is the ultimate opportunity to showcase your talent, capacity for growth and ability to work effectively as part of a nimble team. Did I just sound like a startup job posting? Startups are generally smaller so you’ll have a chance to connect with lots of interesting people to the benefit of your career later on. Chances are your next job will come from a peer who leaves for greener pastures and takes you along or starts their own company. The potential to build career-spanning relationships are unlimited. You’ll also have an opportunity to meet with VCs, attorneys and other power players so take advantage of networking opportunities you won’t get anywhere else.
- Exit Potential & Equity – I’m going to lay something out for you early: meaningful tech exits are difficult and rare. The allure of a unicorn exit and joining a new class of 20-something year old tech millionaires is powerful but you have to understand for every exit you read about there are hundreds of soul-crushing failures you’ll never hear about. That said having an opportunity to exit with a startup is better than have no opportunity at all with a larger corporation. If you’re a seasoned startup veteran the world is your oyster and equity vastly outweighs salary compensation. But if you’re younger and less experienced you should use the startup journey as a way to learn about equity ownership and dilution for future opportunities. Arming yourself with this knowledge will help you negotiate a better overall compensation package that thoroughly accounts for all scenarios. I’m an optimist though so I hope you do find employment at an amazing startup that gets acquired or goes IPO someday. It does happen, so why not to you? Being able to evaluate a company’s true exit potential should help you sift through the noise and select companies that truly have a chance to succeed.
Know the Life Stage of the Startup
So you’ve been reading my thoughts on startup life for millennials and you’re eager to join tech, right? Not so fast. It’s important you distinguish between early and late stage startups to select the best possible option for you in this specific moment of your career. An early stage startup is typically two programmer type dudes working in a coworking space or spare bedroom looking for administrative help or maybe some marketing support. This is probably not the right place to launch your startup career. In addition to long hours, low pay and no benefits, you’re at risk for failure at any moment. But what if they’re onto the next big thing? If they are indeed the next Larry and Sergey you can always join after some traction or funding milestones have been achieved. There’s no harm in staying in touch and keeping the door open but I wouldn’t want your first startup experience to end in disaster.
Late stage startups have probably found their product market fit and are looking to scale growth. You’d probably be much more comfortable working here as they’d still have the startup DNA with the benefit of significant funding and probably the press to help boost your resume. You’re not going to cash in big when they finally IPO but the experience of such a victory will motivate you and provide you with the pedigree to find an even better startup down the road. It’s a terrific experience, I promise you!
Not All Startups Are Created Equal
As an impressionable millennial who wanted to believe in the best in people and companies, it was difficult for me to effectively evaluate startups early on in my career. Fortunately I’ve learned to distinguish between good and bad over the years. Good startups have some combination of strong product + strong leadership. Average startups (read: most) have one of the two. Poor startups have neither, but they do have koolaid exit dreams in abundance. Developing a framework gives you a better chance at landing at a good startup and vastly improves your chances of a beneficial experience. Think about it this way. If you were a VC would you invest your time and money into this company? Use this same framework for yourself. VCs have honed their investment thesis around strict metrics and criteria through years of experience across hundreds of companies. And you should too. In fact, since VCs have unlimited money and you don’t have as much it’s even more important you conduct your diligence because you have more to lose. The startup you choose will be your primary source of income and take up a significant amount of your time and emotional energy at this specific moment in your life.
My Own Experiences
I joined my first startup during the height of the Great Recession. At the time, I was working (slaving) away at an investment bank and analyzing sell-side acquisitions while being trained by some of the brightest minds in the world. I did not feel I belonged. Then the recession hit and I decided (read: was forced) to take a job with a fin-tech startup when my company laid off most of the staff. I realized at that time that big companies aren’t as safe as they appear. Although the pay cut hurt I eventually got back to my original banking compensation and then some. Even better I realized that startups can be safe and even grow during recessions because their revenues are generally less tied to the greater market. They’re serving a core market that hopefully can’t live without the startup’s product.
Following that experience I joined a flourishing but unstructured startup and made even more as an early employee. Early startup successes are a big reason I was able to purchase a home in expensive Los Angeles. I haven’t looked back since. While I went at times without a 401k or health benefits I’m grateful that these moments were short. I was young and healthy so I was able to bear the risk. And all the wonderful and terrible things I wrote about were present at every startup.
My experience is not your experience. But I want you to understand that startups are not what you might think if you’ve never had the opportunity to work in one. You can be well compensated, mitigate risk and improve your chances of an exit if you learn to evaluate opportunities correctly. Maybe next time I’ll write more about how to land your first startup job! I wish you great success in all your endeavors!
I am here for you if you ever need guidance or want to discuss your personal situation or have an interest in startups. Feel free to comment or reach out to me directly and I promise I will get back to you!