I'm continually surprised that this needs to be repeated, almost biweekly here on HN.
As someone advanced in my career, I enjoy startup life for the startup life. As a noob out of college, I very, very highly recommend startup life as you will never be so risk tolerant again in your life, and you can't get the experience any other way. You can afford to fail and then move on to a bigco if you want stability. Also, you will form bonds and make friends that won't happen at a bigco.
Someone should put together a spreadsheet showing the value of a 1% equity stake at seed and series A for YC companies that have had an exit. (It's not hard.) I guess airbnb hasn't had an exit yet, but we can just use $40bn as a reasonable number.
All the online dilution calculators are targeted to founders, so they can model and make raise decisions at each round. For us, it's a very easy depreciation calculation. Anyway 1% post-A results in .52% post-E using a calculator I found easily that has reasonable defaults for each round. That $200MM of airbnb, really astounding. Do consider it took 13 years to get there. OTOH your 1% would have been good after only 4 years.
Let's say you limit your startup job search to just YC companies. Now you just need to factor in the number of YC companies, the number of employees at Series A and earlier, your likelihood to get 1% (unlikely to impossible), and your likelihood of landing in a successful startup.
YC could make this type of calculator online for anyone but that would discourage employment. Someone here can easily produce it.
Please don't make the mistake of thinking you can pick the winner and therefore your likelihood of success is multiplied. You can't. Even YC (and all other incubators) can't, that's why they spray the money around.
I heard this about university, and here it is again about startups.
Counter-anecdote from me: I never made any long-lasting connections at college, and I never made any long-lasting connections at a startup, either. (And I've worked at ~10 of them.)
Instead, my only real adult friendships have come from either working at bigcos, or from extra-curriculars (e.g. social hobbies, sharing creative works and then meeting people who liked them, etc.)
If you want money, go to big companies, your reward is likely to be much more bigger and stable.
He couldn’t retire young, but I’m pretty sure he owned his house and could send his kids to whatever school he wanted.
This is just one too of mind data point.
It is a valid point, though. Working for a low wage at any company is a fundamentally different story than an above average wage at a bootstrapped success that can afford to pay good salaries.
Don't get me wrong, I feel for these companies. They are in a bind. There is no way they can pay salaries competitive with big corporations, and they've made a (wise, IMO) decision to avoid funding and grow organically, which precludes them from compensating through a seat at the exit table. Personally I think the solution for companies like this is employee ownership and dividends. This seems to align incentives properly. I don't see this being done much (at all?) though, which makes me wonder whether there are ugly pitfalls I'm unfamiliar with.
They don't return huge amounts of money, but they are not going to disappear overnight as they have the market cornered on one or two very small niches (eg: the entire worldwide demand for the product they offer is $0.5-5mil). In my experience, a lifestyle businesses has found a problem that a dozen or two midsized companies have and precisely solves it or produces a low volume customizable product.
Basically the goal of the company is to keep the owners comfortable rather than play the unicorn lottery.
Why are those the only two options? What happened to "grow organically into a megacorp over 20-30 years"?
It is possible to start lifestyle then transition to regular or be a blend (eg: currently lifestyle, but keeping a eye out to grow). Sparkfun is a example of this where the founder hired someone to be CEO so they can actually have time to do the stuff they love.
Poor? Really? We make a great living, none of us are poor. We are very well off and you don't need a winning lotto ticket to grow your wealth outside of your salary.
Assuming "we" are all engineers. There's no reference to role in the article or comment you're replying to, so I don't think that can be assumed. There are plenty of low wage jobs at startups.
If the frame of reference is "anyone" then I still don't get the argument. What percentage of jobs out there are lottery tickets? A tiny, tiny fraction. So what's the advice from the GP; everyone should try to work in some unicorn startup in hopes of getting rich?
Rich is where your money makes you enough money to a point where you need not work to maintain your lifestyle (but can choose to).
> Lacking sufficient money to live at a standard considered comfortable or normal in a society.
Said no one ever. That's almost insulting to people who have actual financial problems.
If you are underpaid, yes. But that may not always be the case.
As you grow older, your ability to be productive decreases to the point where 'doing work' is impossible. It's no surprise, then, that most people who sit on their deathbed value friends/family over work. However, this doesn't mean 'doing more work' and 'being productive' isn't a respectable and equally fulfilling value to friends/family when you are young.
Yet, this generic piece of wisdom is often used to diminish ppl who value productivity over all else. I'm not saying one is better than the other, but aren't we getting a slightly biased perspective when we mimic values after old people? Values morph over your life, and the values that are best suited for old age aren't necessarily best suited for young age.
Some of us have to work to afford time with family and friends, or even to afford family and friends at all.
There are between 3-4 million developers in the US. Assuming 30,000 of these $300k jobs (not likely), that's 1%.
> I would argue that the skill level required in its employees for a startup to not go out of business is at least as high as that at these top companies.
Most startup jobs are just another React or Rails or Node job. You're not going to get a $300k job doing that kind of work.
By politics I mean that they have worked within the company to attain that salary, taken the right management positions, kissed the right butts, or maybe just got in early enough and at the right time.
Very few open positions are going to be filled with a starting salary of $300k.
1) Are willing and able to work in SF/Seattle/NYC.
2) Have a degree from a decent university (preferably in CS) and about 3-6 plus years of experience.
3) You spend a lot of time prepping for coding interviews (i.e reading https://careercup.com, etc)
See:
Those numbers and levels are pretty accurate albeit a little low based on my experience living in the Bay Area.
The problem is that 300k actually doesn't go that far when you factor in rent/mortgage and the concept of starting a family in those cities.
Cost of living isn't ideal, but $350k is far more than me and my family (wife and two kids) need to live on. I've been donating 50% for several years, and we still are fine.
(Cost of living details: https://www.jefftk.com/p/spending-update-2018 The big things are ~$50k on taxes, ~$33k on housing, and ~$20k on childcare.)
4) Manage to not be a semi-random false negative
There's still the issue mentioned in your GP that there are not that many of those jobs out there to begin with. Also, there are more people who want them then there are slots.
Note that I agree about not needing to get political to get these roles. I just disagree about how easy it is to obtain them.
Just getting a visa to work in the USA like I had to do is hard and disqualifies most of the planet (~7.7 billion) people.
Getting into a decent, internationally recognized university is also difficult and likely filters out a huge number of people.
I know several people with 5+yrs of exp making $300k+ per year easily at several companies (not just at FANG).
Caveat: all these people are good at what they do, come from good schools, and have good backgrounds.
This is the real reason startups can't compete in the talent market today. The companies operating at scale can afford to pay high liquid comps for the best talent.
With hundreds of thousands of candidates vying for them, and more qualified than there are slots available.
> More importantly though, I would argue that the skill level required in its employees for a startup to not go out of business is at least as high as that at these top companies.
I disagree with this one. First off, the skills required to help a small, rapidly-growing company be successful are very different than the skills required to help make a similarly-sized project within a large company successful. Second, I think most startups overestimate the quality of the people they need to successfully execute, partly due to the first point, partly due to not understanding the actual business risks, and partly due to overestimating the difficulty due to an inflated sense of self-importance WRT the company.
EDIT: downvote if you want :) you all have unrealistic expectations thanks to HN.
I mean, that can be debatable imo. It's an oversimplification.
To think of it simply; Does spending less time with your family now, mean more time in 2 years? Are the now years more valuable than the 2+ years? Is there a risk of 2 years becoming 10? More time now is great, but what if you're worrying about money constantly? etc
There's a ton of decisions that go into big life decisions. Time with family, even if family is everything in your view, is not the only input. Time is meaningless without context.
But one thing is certain. Your children will grow old and move out, you parents and grandparents will pass on. Life is short and death and taxes are your only guarantees.
We need to move beyond this old fashioned idea of shareholder primacy, there are more important things to consider than just clawing at an equity stake and optimizing to increase the value of that stake at the expense of everything else.
Working at a bootstrapped company is not going to earn you an exit worth more than a Ford Focus unless you have a non-trivial equity stake.
I'd much rather be told that six-figures is a sure thing for basically eternity than know one day I could lose my job without warning, but hey maybe we'll (read: the founders) will become billionaires / millionaires.
Playing the startup lottery is a dumb prospect for short-sighted 20-year olds. Absolutely nothing wrong with joining a startup (I love them and plan on working at them for the foreseeable future), but you have to go in with the hedge that it might go to zero unless they plan on avoiding unsustainable VC-funded growth by finding sustainable profit
High and stable income put into investments and savings then leaving and founding your own bootstrapped company is the way to go. I'd much rather know I can sustainably increase my income over time than knowing I'll have to hit it big to not be in debt or lose someone's money.
VC is a fool's game. You have to be crazy enough to think you'll win, which is great for those huge wins but not so great for the losers who will have dumped 5 years and their sweat and tears to make $0 or have lost money.
You can lose your job anywhere without much warning. The trick is don’t depend on your job for your long term livelihood. Instead, depend on a marketable set of skills and a network that can help you land another job quickly.
1. Going in to work and doing the best job I can.
2. Making sure my skillset is marketable and keeping my resume continuously updated
3. Keeping in touch with my local network of recruiters.
In 20+ years, it’s never taken me more than a month to get a job and once, I left a contract (long story) with nothing lined up, met a recruiter for lunch on Monday and had a job offer with a what was then a Fortune 10 company by Thursday[1].
If I worked for myself, I would be constantly hustling for clients, collecting payments etc. Working for a company means money shows up in my account twice a month for exactly the same amount. If the company goes bust, I can find another job. If I want to take a vacation or get sick, other people take up the slack and I still get paid.
I’m no special snowflake, anyone in my metro area that has kept their skills up can easily find a job.
[1] Yes that was dumb luck, the department that I was hired into was a recently acquired startup and their HR hadn’t been fully integrated into the large slow moving bureaucracy.
Btw I think health insurance is the biggest problem here, in the US.
Anyway I didn't mean in any way that being employed by a company was some kind of bad choice, not at all!
As long as the ACA exists, health insurance is available. It's just a cost of being self employed.
On the other hand, it's even easier if you have a spouse that works a stable job. I know a few people (including me) that have spouses that work a low paying government job just for the insurance so they can be more aggressive about their career or start a business. Since I've been married, I've jumped back and forth between working salaried and contracting with abandon.
When you go into it demanding what you're worth and knowing the risks, on the other hand, it's not a fools game. It's a calculated high risk, high reward ride.
I've worked in many VC funded startups, and I've made money on all of them. Mostly not much above a normal job, but I've only ever put in "free" work or underpaid work for short periods, and then compensated with higher income later.
It's about not getting taken in by the sales pitch to the extent that you stop negotiating, and about not overestimating the value of the equity on the table. I typically won't take an offer that I wouldn't have taken in a non-startup without the equity.
If either job comes with a lottery ticket, I guess that's sort of nice?
I think this is the most profound thing I've learned in my career. But an even more important lesson is that you have to find a place where the B.S. is tolerable to you. For some people the politics of a bigco may be impossible to deal with, for others the "another month, another pivot" shiny objects syndrome of a small startup may be the issue.
Every place has B.S. That's why they call it "work" and not "fun". Find a place where the B.S. is tolerable (or, better yet, minimal).
No, it isn't. The "work" is the fact that I am applying my skillset to satisfy my employer's desire whether I feel like it or not; often, that means polishing and grinding at rather boring but rather necessary tasks.
None of that requires bullshit, and calling bullshit "work" normalizes toxic behavior.
I would also like to distinguish between toxic and abusive behavior (which I don't think anyone should tolerate) and a certain amount of B.S. The latter can vary across a spectrum, but is tedious, or frustrating, or annoying, not psychologically harmful.
I prefer to think of it is a finding a bullshit compatible place. All companies have bullshit, but the trick is to find a place whose particular variant of bullshit is compatible with your particular tolerance of said bullshit.
Bullshit compatibility is an important thing!
Smaller company doesn't have to mean less bullshit. It's just a different kind of bullshit.
They can take the form of your manager, or colleague, or anybody in the company and the option is to either deal with it or bail on the company. In a larger company with many teams, you can usually route around such people by switching to a different org. Plus their power is often more constrained because there is just more people in the company.
401k match is nice, but it's part of total comp. I don't want to be promoted into a job where I'm responsible for others, thanks -- it's more work, I'm not good at it, I feel bad about fucking up the careers of my subordinates, and it doesn't give me the same fulfillment of doing my normal stuff.
In exchange for a chance of promotion, I get to deal with a purchasing process that makes it nearly impossible to pay a recurring vendor; I get to do performance review cycles twice a year (no wait, there are actually two hidden mid cycle reviews, so 4x a year), and deal with co-workers who don't give a shit about actually getting things done, they just give a shit about appearing to have 'impact'. I get to deal with 'up or out' policies. I get to deal with pass the buck bullshit trying to get my state income tax changed to reflect where I work and where my desk is. Oh and so many meetings, because nobody is willing to be responsible for making decisions.
I'm willing to put up with this shit because of equity from an acquisition, but I was much happier with the typical bs at the startup, which was mostly that I ended up owning a lot of stuff I'd rather have offloaded onto IT because we didn't have IT, and because I worked at a rinky-dink ISP in the 90s so I knew how internet email worked.
But mooreds upthread is right, it's not a matter of finding a place with no BS, it's a matter of finding the BS that is most tolerable. I clearly have a preference.
I've interviewed at large places and they either blew me off because no one cares (why would they) or they had pointless interview questions (cough google)
When you consider company equity to be a nest egg but don't actually have any control over whether it'll be a success or not you're making a bet. I don't blame anyone who isn't interested in that game.
These are not bad things. As was mentioned in a few threads over the past few weeks, nobody lies on their deathbed wishing they had done more work and spent less time with friends and family.
While VC-driven startups can give you a large exit, so can playing the lottery. Don't fool yourself into thinking this is a guaranteed get rich plan. By all means, try it if you have the time and energy and enjoy the work. But if you don't have the passion and energy for VC-funded startups, then admit that to yourself and do something else.