Brad Hargreaves | Building Things

Brad Hargreaves on entrepreneurship, community and life

You Can’t Get There from Here

with 10 comments

I love seeing people join startups, and it usually makes a lot of sense for everyone. Young tech companies tend to have great cultures and incredibly smart people from which to learn. And lots of startups are very generous with salaries and options — in many cases, enough that an employee can maintain a close-to-market salary and keep the lottery ticket too. But there’s one situation in which it doesn’t make sense to join an established startup: you actually want to start your own company.

As I’ve written in the past, many people who go into startups aren’t necessarily looking for the salary, lottery ticket and cool culture, as much as they may publicly say so. They’re looking to gain independence, establish themselves as leaders and self-actualize. They’re looking for the things you get from founding your own company and believe that joining a startup as an employee will be the quickest way there. But that’s a poor strategy, especially for non-developers.

That tactic mistakenly applies a corporate model of advancement — in which one starts in low-level jobs and wiggles into a management position over the years — to entrepreneurship. You aren’t going to get promoted to founder by spending a lot of time working for founders. You become a founder by starting your own company. Yet over the past year I’ve seen a number of people fall into “the non-founder trap”, which goes something like this:

1) You decide you want to get into a startup. You don’t feel that you have enough [intelligence/confidence/experience/money/ideas] to start your own company, so you search for a job within an established startup.

2) After several months of searching, you take a job in the business development / marketing department of a 10-person company. While your last job paid you $100,000 per year, you accept $60,000 and 0.3% in options.

3) While you occasionally advise on high-level decisions, 95% of your job is emailing potential clients and taking sales meetings — the same stuff you were doing at your last job. The fundraising, investor relations, and personnel management is done by the CEO.

4) After a year or two you would like to leave, but unfortunately your $60K per year salary hasn’t let you save up enough to quit your job and start something of your own. You also don’t feel that you have a good sense of how to raise money or manage the earliest days of a startup. So you begin searching for another job at a small company and return to step (1).

There are plenty of counter-examples. I know a number of people who fell in love with startup life and founded their own companies after working as an employee of a startup. But it’s not a great path for people who really want to be founders, who will struggle to be happy at their jobs and fail to save enough to go out and build their own business. If you want to be a founder, go out and start something. The inspiration, confidence and experience will come.

Written by Brad Hargreaves

January 9th, 2011 at 6:27 pm

  • Jennifer H Mcfadden

    Great post, Brad. Well said, indeed. Just shipped it off to a friend (developer) who is contemplating an offer vs. starting his own thing.nBest,nJHM

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  • http://www.hypedsound.com jonathanjaeger

    I completely agree that the best way to start a company is to actually start one. You also make a good point that working at a startup might prevent you from making enough money to save for your own startup (something people should definitely think about).nnHowever, some people might want a taste of the startup life/culture but are also not ready with their own BIG idea yet. The connections and a potentially happier lifestyle might be worth it over the typical 9-5 job you could be miserable in. The question is if there’s enough leverage working at a successful startup that will help you later for your own startup (like social proof for investors and other business relationships or maybe even finding future co-founders and collaborators).

  • http://about.me/nickgiglia Nick Giglia

    Dead-on, Brad. If you want to start a company, there’s no substitution for actually starting it.nnI also think there’s a profound difference between this and people keeping day jobs in order to raise money….very different.

  • http://blog.jwegener.com Jonathan Wegener

    I like the basic premise, but I think you overlook the value of being at a startup in terms of the people you’ll meet — other employees, customers and most importantly the investors. All of these people are crucial connections that will help you start your own when you’re ready to move on.nnThe best introductions to VCs come from their portfolio companies. And when the startup founder can intro you to their investors and give a genuine endorsement of you (because they’ve worked with you), that’s really valuable. nnFor folks with no startup experience and no connections in tech (ie someone coming out of management consulting and looking to found a tech startup), working for a startup for a few years almost always makes sense.

  • http://giffconstable.com giffc

    I agree that your learning curve will be 1000x once you start your own, compared to working for someone else, but it isn’t a bad place to start if the tech startup world is brand new to you — think of it like an apprenticeship where you can learn what works and doesn’t work on someone else’s dime for a bit. For stability, you might want a company over 50 people but for maximum learning and responsibility, under 50 is probably best. Beyond the learning, if the startup does well, the cachet of having that name on your resume will be immensely useful when you do your own, but don’t count on this — too many startups blow up, even the hyped up ones, for you to count any chickens here.

  • Myra Minkoff

    If you’re making 60K, don’t have kids, and can’t accrue a meaningful savings account, you’re doing it wrong. (Yes, even in NYC)

  • http://twitter.com/MaxFinder Max Finder

    But my question, which applies directly to my personal situation, is what if I don’t have an idea to which I’m willing to devote all of my time and energy and head space? But I’m dying to start my own company. Should I force an idea that I like but don’t love? Should I not take a single job, and just try and brainstorm until I find that idea? Or in the meantime, shouldn’t I get a job at a startup, make connections, help people make some money, get some more experience, so that when I do get that idea I’m a little bit smarter and a little bit more well connected to see that idea succeed? Or should I get a job at a big company and make as much money as possible, so that when I get that idea I’ll be more financially independent?

  • http://bhargreaves.com/ Brad Hargreaves

    It’s really hard to answer that without more context, but I think you arernasking the right questions. Have you considered taking a part-time orrnconsulting job with a startup so you can get into the community / spacernwithout sacrificing all of your time?rnrnI don’t think a FT job with a startup is right for you — you need some timernto think about what you want to do. jobs with startups are very consuming.

  • Rstecker

    Another way to start your own company is to work for high quality large company with high quality values first. Learn as much as you can, be a sponge, soak up all you can. Learn about the business world. At the same time be the best employee they ever had because you never know what the future will bring. This company may just be the future for you. However, if you have a specific dream and a unique, marketable, innovative product or system and the ability to weather a potential failure and then learn from it. The risk is then worth it.