Want to Work in a Startup? Some Reality Check (No! Not by Guy Kawasaki)
Although the title of this article is somewhat similar to (stolen actually) that of the unofficial guide for start-ups, the content is entirely different in terms of the segment for which this article is written. While the former (the original) is meant for start-ups and the people behind those start-ups (as in the founders only please), this article is meant for people joining start-ups. And while the former is a roughly 474 pager, this guide is a compact 1 pager only. It’s a brief checklist of points one needs to think about before making the decision to join a startup. While these are all my views, and I know it might offend a few people and there will be exceptions to these thoughts, these are nevertheless the realities that I have realized over time working in a startup.
I want to work in a startup
This is actually not a question in itself, but it leads to the bigger question of “Why”. If you haven’t given a clear thought to the “Why” part then there’s a high probability that you won’t last in the startup for more than the time you’ve spent thinking about the “Why”. With the term “startup” becoming a common buzzword and a “hep” thing to talk about, and with all the success stories of “Google”, “Yahoo”, “eBay”, “skype”, etc, it is not hard to get carried away with emotions and decide that this “X” startup is the one I want to be part of.
That’s where people end, and go ahead with their decision. But, beyond that are the important points that you need to consider. The following 4 points are what you need to think about before making your decision:
Working for a Startup - Enjoy the Parade!
1. What is the domain of the startup, and how well do you think it is placed to be a strong contender in the near future. For e.g, a new startup for social networking is not what you want to get into right now. On the other hand, a startup in the Business modelling and optimization domain is definitely a hot one right now (partly because of the optimization needs during recession, and mostly because there are not many players in this domain right now). Try to see the bigger picture and consider the whole business and not just your role. Also consider the amount of time you are most likely to spend in the startup, and evaluate as to what the market (for your company) will be like by then.
2. What is your own career growth in the company, and where do you see your career moving in the next 2-4 years. Is the start-ups’ vision aligned to your career growth and interests or not. A time of 2 years is all you get in a startup to do or die. Probably even 1 year. If the startup does not build something substantial by that time, then the chances of going big reduce exponentially, and which needless to say hampers your career as well. So, have a timeframe of 2 years in mind, and have a clear thought as to what you ought to be doing after 2 years, and what all do you need to do in those 2 years. It will be of great help to you and to the startup you join, both.
3. What is your stake in the company, and how and when can you realize them. Generally, all the start-ups have a low compensation package and a good equity package. It is always good to know your stake in the company in terms of percentage, rather than in number of shares / ESOPS. Also, it is good to know beforehand as to what is the ultimate end of your ESOPS. Remember that cash is king, and your ESOPS are nothing but a way to that cash later than sooner. So, if you cannot sell back your shares to the company after your vesting period (just in case you are not as interested in continuing any further or for some other reason see that your company is not going anywhere), and just have to wait to get your cash till the company gets acquired or has an IPO, then just move on to the next startup.
4. Be prepared for a culture shock. Whether you are straight out from college having dreamt of a workplace like you’ve seen in movies, or from a big IT giant where you have got used to that super-cool CCD in the cafeteria, you are bound to get a huge culture shock in the startup. Right from your workplace to your work hours, you will have to put in and get used to not having all that you need / wanted. A small workplace (usually a small apartment), no cool place (nor money) to have lunch (go out and eat at the nearby shanti-sagar everyday), work hours that leave you no time for yourself (8 – 9, 5 days a week), and no family-day or other such events regularly. What you will get definitely though, are people and knowledge – tons of knowledge about each and everything of business / startup.
If you have thought clearly about the above mentioned 4 points, it signifies that you are smart and know the value of money (3rd point), have a holistic approach of viewing business (point 1), are professional and plan for the future (2nd point), and you are prepared mentally to work in a startup (point 4). All these are essentially the points that start-ups look for in a potential employee, and also that one should think about before joining any startup.
Highly Recommended Read: Five points to ponder before joining a startup
Superficial stuff….
“For e.g, a new startup for social networking is not what you want to get into right now. On the other hand, a startup in the Business modelling and optimization domain is definitely a hot one right now (partly because of the optimization needs during recession, and mostly because there are not many players in this domain right now).”
“Superficial Stuff” ??!!..
?“For e.g, a new startup for social networking is not what you want to get into right now. On the other hand, a startup in the Business modelling and optimization domain is definitely a hot one right now (partly because of the optimization needs during recession, and mostly because there are not many players in this domain right now).”
I disagree with that piece of advise around the domain, and that being the first thing you look at. Twitter is in the social networking space & happened not a long time back. There are a bunch of smaller companies which have done well thanks to platformization of soc. networks like Rockyou, slide, zynga, – they are all in the soc. networking space & are doing well. weRead[1] & chakpak are 2 others from India which are doing well too.
In general, I feel, the domain is a much smaller factor than say the people who are building the startup. It can serve as a guide, but innovation happens in well-established domains too – gmail & ipod are classics and in some ways Zoho falls in that category too.
[1] – I help build weread.
First of all, the credibility of the article rests on the track record of the author with respect to startups. So, everyone is better served if the author discloses that.
Secondly, point # 3 is highly misguided and misguiding. The very purpose of equity is to incent employees to take the startup to a stage of massive cash infusion from outside (IPO or acquisition). Before that stage, startups are NOT in a position to BUY back vested options. Ironically, the author says “Cash is king” but forgets to apply the same principle to the startup itself!!.
#4 is the only thing that’s stopping me from working in a startup.
BTW, The link in the end is faulty, please correct it.
May be stupid, misleading, crappy, no track record,,etc etc. .but one fact remains the same,,,these articles serves no purpose. These are written for time pass material for its reader and feel good for the writer,,,blah blah
The point about career growth is a good, and often overlooked point in these type of discussions. Your marketability post-startup is going to be closely tied with the overall success of the venture. The point: choose wisely.
Another resource to check out is an article I wrote a few weeks ago titled: Thinking of Joining a Startup, Then Think Like a Venture Capitalist. Once you have internalized the decision makes sense for you, this is a guide to making sure you are asking the right questions.
http://darthcapitalist.com/2009/07/thinking-of-joining-a-startup-then-think-like-a-venture-capitalist/