Archive for the ‘careers’ tag
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.
Let’s say you’re a college student who wants to be an entrepreneur. Let’s also say — for one reason or another — you don’t want to jump in and dedicate all your time to an idea right now. Maybe it’s money, maybe it’s confidence, maybe it’s the lack of available co-founders or some combination of the above. From what I’ve seen, most people in this situation do one of the following:
1. Join a big company and plan to do your startup later.
2. Join another startup as a non-founder.
3. Go to graduate school.
I have a different suggestion: go into sales. Take a commission-heavy sales job at a company that gives you the ability to source and manage your own leads with as much independence as possible. Find a larger company in your space of interest and just go learn to sell things there.
The ability to sell is the most underappreciated startup skill. In the get-bought-by-Google model, you just have to be able to code and (possibly) market a product. Ideally, you build something so awesome it just takes off by itself. Sadly, this rarely happens. Instead, almost all companies have to sell something at some point in their lives. And this isn’t a bad thing. It can keep your company (and you) independent of venture capitalists and other control-seeking investors. Having a fundamental understanding of the psychology of sales and the sales process can be the difference for your startup.
Also, sales isn’t IBD analyst-style slave labor. There’s literally no cap on the amount you can make, which means that you can potentially bring home a decent six figures a year if you’re really good — way more than most first- or second-year analysts in investment banks. The hours can also be ridiculously flexible; if you’d like, you can work hacker hours.
For whatever reason, sales jobs are off the radar of most Ivy League college graduates. Since a nice degree doesn’t mean anything in sales, little to no recruitment is done on campus. And Ivy League undergrads love to be recruited.
There’s no better training for being an entrepreneur than actually starting your own company. But if — for whatever reason — that’s not feasible, sales is an good and woefully underappreciated route.
We generally don’t think enough about how we should live as opposed to the minutiae of our lives. It’s like how many CEOs of startups get caught up in operational details and let their companies slide down a poor strategic path. But post this isn’t just about startups; it’s something I see in almost everyone (including myself).
Let me treat you to a story for a moment. I visited a friend today near Penn Station. I was heading from the 86th street area of Manhattan’s Upper East Side. There are two ways to get to Penn Station from there:
a) Take the M86 bus to Central Park West, then the C train to Penn Station
b) Take the 6 train to 51st Street, then the E train to Penn Station.
On a Sunday morning, either one will take about 35 to 40 minutes. But coming back is a different story — it’ll typically take 25 to 30 minutes. The actual trains and buses go just as fast. So why the difference? Option value.
Individually, C and E trains are fairly rare. But when I’m heading back uptown and waiting at Penn Station, I can take whichever train comes first. I don’t have to commit to a certain path until I have information about which train is coming first. I’ll just take the first one to show up and only then am I committed to a certain path — if a C train comes first, I’ll head across Central Park on the M86. If an E train comes first, I’ll take the 6 uptown.
When I’m heading downtown, I either go into the subway or wait for the bus. When I’m making that choice, I don’t have the same information I do when I’m heading uptown; I don’t know whether the train or bus will come first. I could very well go into the subway tunnel and wait 15 minutes before the next 6 train comes by.
Thus, the 10 minutes I save on average when heading uptown is the value of being able to retain that particular option.
So why am I rambling about the MTA? Because there are a lot of people who don’t understand the value of an option — when in reality, option value likely represents the single most precious asset we have. Especially while we’re under, say, 40.
I don’t know what our economy and culture is going to look like in 20 years any more than I know whether the C train is coming before the E train. I can gather hints — for example, if a lot of Indians and Pakistanis are on the platform, it probably means that we’re due for an E train, which goes through Jackson Heights, Queens — a major south Asian center. But that’s hardly a definitive analysis, and surely not one to base a career on.
Yet I see a bunch of people my age who can’t wait to commit to a path. And I’m not talking about people who have a passion for a particular field. I mean people who just want to have a have a nice job, make a lot of money and meet a nice husband/wife. And I’m possibly as guilty of this as anyone, what with being in the gaming industry since before I got a college degree. But it’s still something I think a lot about, especially when I see people my age self-deprecating their career paths as non-committal. “That’s great!”, I say. “Keep doing that as long as your budget and significant other allows!”
Let’s say born in 1960 wanted to have a high-paying job with limited risk (a common goal, if not among startup founders). The decision for that person would’ve been fairly obvious — become a doctor. At the time, finance was still the wild west, and doctors were at their peak profitability in the mid-80s. Yet had that person started practicing at, say, age 30 in 1990, they would have endured a lifetime of decreasing salaries, higher malpractice insurance and increased risk.
I think the same story can be told for a lot of people who have been sucked into finance over the last 15 years. Finance is hardly becoming a bad job. Neither, after all, is medicine. But it is definitely on the downward slope in terms of compensation, prestige and risk.
So what’s the point? You’ve got to make a decision at some point, right? Well, yes. But it’s probably worthwhile to spend the extra 5 or 10 years figuring out what you love to do rather than just jumping in to something because it is an “obvious” choice with good compensation. Of course, disregard this advice if you know what sectors will be hot when you reach your peak earning potential in 20 years — if you do, you should take the multi-million dollar offers you’re surely now getting from hedge funds. Maybe you’ll end up trading options.