The crux of the article is a list of seven misconceptions that the author chooses to dispel one by one. I’d like to take each of them and see if these are truly problems with start-ups, problems with the engineering industry, or even problems with expectations. (Mr. Church’s excerpts are in red, my comments follow)
1. A startup will make you rich.
True, for founders, whose equity shares are measured in points. Not true for most employees, who are offered dimes or pennies.”
First, I don’t think most engineers that join start-ups are expecting to get rich these days, and even founders aren’t all expecting to get rich. If you had written this in 1999, I’d agree this is a common misconception. Most employees in my experience see stock options or equity grants as ‘lottery tickets’, that they realize probably won’t pay off – but they also understand that you simply can’t win if you don’t play.
“Moreover, raises and bonuses are very uncommon in startups. It’s typical for high performers to be making the same salary after 3 years as they earned when they started. (What happens to low performers, and to high performers who fail politically? They get fired, often with no warning or severance.) “
I don’t see bonuses or raises as uncommon in the start-ups I’ve worked with. My current client list includes a handful of start-ups that all offer bonus, and historically I’ve seen employees getting raises and bonuses from start-ups that are on par with some of my larger clients. And low performers being fired without warning or severance? Is that a start-up problem specifically? Low performers or people who ‘fail politically’ are fired in any sized company, the only difference may be severance. Again, this is not a ‘crappy start-up problem’.
2. The “actual” valuation is several times the official one.
“In truth, startup employees should value equity and options at about one-fourth the valuation that VCs will give it. If they’re giving up $25,000 per year in salary, they should only do so in exchange for $100,000 per year (at current valuation) in equity.”
I usually advise candidates that they may want to weigh any equity simply as a chance to receive some additional compensation, and I’d generally advise them not to accept any offer that won’t afford them to live a lifestyle that makes them comfortable. If you can’t afford a 25K pay cut, don’t take one.
3. If you join a startup early, you’re a shoe-in for executive positions.
Again, I just don’t think engineers are this naive today to believe this, or at least not the people I know.
“Not so. In fact, one of the best ways not to get a leadership position in a startup is to be there early.”
I’d love to see if any actual scientific evidence exists to back this claim up, but I wouldn’t know where to find it. For every engineer you can name that did not get a leadership spot, I’m sure someone else can name one that did. Again, in my experience I generally see that engineers who join early on are rewarded with leadership roles that they are qualified to do. Being the first or second engineering hire at a start-up doesn’t automatically give you the qualifications to be CTO, and if you expect you should be CTO/VP just because you were an early hire you probably need to rethink why you are joining the company.
“Startups often involve, for engineers, very long hours, rapidly changing requirements, and tight deadlines, which means the quality of the code they write is generally very poor in comparison to what they’d be able to produce in saner conditions. It’s not that they’re bad at their jobs, but that it’s almost impossible to produce quality software under those kinds of deadlines.”
True on hours, deadlines, requirements, and perhaps the code could be better in ideal conditions. I hear anecdotes all the time from engineers at large companies telling me how much free time they have with their highly reasonable deadlines and fully developed requirements being written in stone. Wait…no I don’t! Again, not a ‘crappy start-up problem’ – it’s the nature of the software game overall, just a bit amplified.
“It may have been a heroic effort to build such a powerful system in so little time, but from an outside perspective, it becomes an embarrassment. It doesn’t make the case for a high-level position.”
From an outside perspective, companies that may hire these engineers down the road will most likely respect the experience those engineers had in building the product under less than ideal conditions. Most hiring managers from outside firms won’t know whether the product was some epic flop anyway.
“Once the company is rich and the social-climbing mentality (of always wanting “better” people) sets in, the programmers will be replaced with more experienced engineers brought in to ‘scale our infrastructure’… The old engineers probably won’t be fired, but they’ll be sidelined, and more and more people will be hired above them.”
Well that was depressing. I’d say, more likely, once the product is built and the company can hire more engineers, the developers that were there in the beginning now have accomplished their goal and will make the choice to move on. The mentality of this type of engineer is to build something, but they may not want to maintain it. Once that excitement is gone for this type of engineer, they will go voluntarily.
“Frankly put, being a J.A.P. (“Just A Programmer”) in a startup is usually a shitty deal. Unless the company makes unusual cultural efforts to respect engineering talent (as Google and Facebook have) it will devolve into the sort of place where people doing hard things (i.e. software engineers) get the blame and the people who are good at marketing themselves advance.”
Is J.A.P. a great deal at other companies? There are plenty of established companies that don’t pay engineers great salaries, and work them long hours. I think the key point is the cultural efforts to respect engineering talent. My clients tend to love and respect their engineers, which is why I disagree with many of these stereotypes.
4. In startups, there’s no boss.
This one’s patently absurd, but often repeated. Those who champion startups often say that one who goes and “works for a company” ends up slaving away for “a boss” or “working for The Man”, whereas startups are a path to autonomy and financial freedom.”
No boss? I must admit, in my 15 years of tech recruiting I’ve never heard this one before. Who are these people that you are talking to? I’d say start-ups are a potential path to financial freedom, whereas working for an established company (with no ‘lottery tickets’) is probably not going to get you to early retirement.
“People who really don’t want to have “a boss” should not be looking into VC-funded startups. There are great, ethical venture capitalists who wouldn’t go within a million miles of the extortive shenanigans I’ve described above. It’s probably true that most are. Even still, the power relationship between a founder and investor is far more lopsided than that between a typical employee and manager. No manager can legally disrupt an employee’s career outside of one firm; but venture capitalists can (and sometimes do) block people from being fundable.”
How did we get from having ‘no boss’ to extortion by VC’s and managers? A manager disrupting an employee’s career outside of one firm??? WTF? Lemme guess...the author had a very bad experience?
5. Engineers at startups will be “changing the world”.
With some exceptions, startups are generally not vehicles for world-changing visions. Startups need to think about earning revenue within the existing world, not ‘changing humanity as we know it’.”
This might work on a small subset of 22 year old kids, but I think most people know they aren’t going to change the world.
“…but people should understand that their chances of individually effecting global change, even at a startup, are very small.”
The likelihood of ANYONE effecting global change is incredibly small at a start-up, and probably just as small at a large company. Again, this isn’t a ‘crappy start-up problem’.
6. If you work at a startup, you can be a founder next time around.
Why not? No, seriously – why not? Working at a start-up doesn’t exclude you from being a founder next time, does it?
“What I’ve said so far is that it’s usually a sh*tty deal to be an employee at a startup: you’re taking high risk and low compensation for a job that (probably) won’t make you rich, lead to an executive position, bring great autonomy, or change the world.”
If you assume there is high risk and low compensation for every start-up job, I’d agree. Jobs with established companies don’t always pay well, rarely make you rich or lead to an exec position, and almost never allow you to change the world. If that is how you define a crappy job, all jobs are crappy.
7. You’ll learn more in a startup.
This last one can be true; I disagree with the contention that it’s always true. Companies tend to regress to the mean as they get bigger, so the outliers on both sides are startups. And there are things that can be learned in the best small companies when they are small that can’t be learned anywhere else. In other words, there are learning opportunities that are very hard to come by outside of a startup.”
So you won’t necessarily learn more in a start-up, but there are unique opportunities to learning in a start-up. This sounds like a feature, not a bug. Are there unique opportunities in larger companies to learn things that you can’t learn anywhere but in the larger company? Perhaps.
“Startups are generally too busy fighting fires, marketing themselves, and expanding to have time to worry about whether their employees are learning.”
Fighting fires is a great metaphor here. Do you know the best practice for fighting fires? It’s actually fighting fires. Of course, there is danger in that, but engineers learn much more by being in those environments than they do in a completely comfortable setting. It’s not about a company that can afford (both time and money) to send you to a training seminar, it’s about learning on the start-up job how to build something under tough conditions.
In conclusion, the problem with Mr. Church’s article isn’t that start-up jobs are crappy. It’s that the author feels that many people may have certain unrealistic expectations about start-up jobs. It assumes that all start-ups work you to death and pay you nothing, and that simply isn’t the case. It’s a stereotypical assumption, and it’s dangerous one.
If you take any job and expect that you will absolutely:
1 – get rich
2 – become an executive
3 – have no boss
4 – change the world
5 – found a company within x years
6 – learn more than everyone else
then I can assure you that you will be VERY disappointed, no matter the size or age of your new employer. I sense that people have more realistic expectations than Mr. Church gives them credit for, and the people I know in 2012 certainly do. A more appropriate title for his article would have been ‘Don’t Join a Start-Up with 1998 Expectations’.