Working For A Startup

There was an interesting article about joining a startup as an employee on the IEEE Computer Society site. The article discusses some of the considerations when first deciding if a startup is right for you, and things you need to consider. While worth a read, the article doesn’t touch on some of the critical aspects that you can expect as an employee of a startup. It also implies that startups are only viable if and when they are able to receive venture capital funding, which is misleading seeing as more startups exist without VC funding (and never receive it) than do. I’ve worked for, or started, 7 different start-ups, and none of them had VC funding, or any interest in it. They either were funded through founder capital, debt or on-going revenue. However, that isn’t really a big issue, since how the startup is funded isn’t necessarily all that important. The fact it has funding of any kind is important. That funding will be a consideration in any decision about whether to join a start-up or not. But what most people who join startups aren’t prepared for is the job itself and the nature of a startup. What they also aren’t ready for are the different types of startups.

Working At A Startup

I’ve seen people of all stripes work for start-ups, from people who have worked at nothing but startups and small companies, to people who came from multi-thousand-person large corporations. I, myself, have worked at companies that have ranged from 6 to 60,000 people. If you want to work for a startup, be prepared for a few things that you won’t get at a large multinational corporation.

First, the concept of the “job description” in the traditional sense is non-existant. Every job offer letter that I’ve either accepted or offered always has the “other duties as required” phrase included in the description of the position, and that phrase succinctly captures what everyone’s job at a start up: other duties as required. You may be a database administrator, but you can also expect to refill the coffee maker, sign for deliveries, and use whatever technology skills you have to help maintain the network, servers and website. There is little or no room for specialists, rock stars and prima donnas at a startup. You do what you can to get things done, and keep the company going. If you find yourself working at a startup where people stick to their job description to the letter, then I would be worried. I would be even more concerned if it is the founders that act this way. A small company simply doesn’t have the resources to allow someone to hold a very narrow and strict definition of their duties. Working at a startup is for a generalist, for someone who has talents in many areas and wants to exercise them.

Second, be prepared for time and effort above and beyond what some people would consider normal. A startup can be a hard place to work for people who want to work strictly 9-to-5, with no work on evenings or weekends. That isn’t to say that any company, startup or otherwise, should be continuously making extraordinary demands on your time. People generally have lives outside of work, and people need a break from time to time. However, you can expect that a startup will draw on more of your time than most other places. A good startup, though, will be run by people who are willing to put in the same or more effort. Any startup where the founders or senior management head out the door early, but expects everyone else to work long hours, is one that I personally wouldn’t want to work, and I would question their long-term viability.

Third, be prepared for risk and be willing to tolerate risk. No matter how well funded and well-run a company looks, startups are small enough that speedbumps rapidly become roadblocks. Funding may look good one month, but a sudden change on the part of the investor(s) or an unexpected event suddenly changes the financial picture. That isn’t to say this doesn’t happen at bigger companies. The difference is that, where most really big companies take months or years to decline (yes, there are exceptions), in a startup that can happen in weeks or days, no matter how well funded they are or how successful the product or service is. All jobs come with risk. For startups, those risks can be higher, but they can also be more frequent.

The people I’ve seen struggle at startups are those that can’t come to grips with these issues. It can be tempting to want to work for a startup because the potential to be a meaningful part of something interesting or important. But if you expect to stick to limited hours and a strict job description, then a startup is not for you. If you want some security as to where the next paycheque is coming from, then a startup may not be your best choice.

Types of Startups

Not all startups are created equal, and the type of startup has an influence on the issues I described above. Depending on what you want in a job, position or career, different types can help or hurt. Just from my own experience, I’ve seen or witnessed the following types of startups, and I don’t claim this list to be exhaustive:

  • The traditional “want to make it big” company that has some expectation for growth
  • The “founders won’t let it go” company
  • The lifestyle company
  • The ineffectual dreamers

All have their benefits and drawback. The first, which is what most startups are trying to be, is probably the more common model. This is the company that will make the most demands on your time and talents. But, if you prove valuable, you can expect some kind of upside, both financially, personally and professionally. The only downside is that these companies tend to grow up, and the “startup” in time become a bigger company with lots of employees and lots of politics. If that doesn’t appear to you, you should consider at what point you will want to move on to something else.

A variation on this first kind is the “founders won’t let it go” version. This company has, and possibly is, growing and viable for the most part. But, don’t expect to participate very much in the upside, and if the company needs outside funding to get past certain roadblocks or hurdles, expect some difficulty as the founders decide they don’t want to give up control, or want the “big payback” at a stage where one isn’t forthcoming (the usual approach is to try for some kind of IPO, even if the company isn’t in a position to support one). From my experience, this is the type of company that can be rocking along quite well, but explode at the first major financial challenge.

The lifestyle company can be fun to work at for a little bit, but it isn’t viable as a long-term career (unless it is your company, then have at it). These tend to generate just enough revenue to “get by”, but they don’t stretch themselves. They aren’t trying to grow, so the potential for any sort of financial windfall is non-existent. What you can get from these types of companies is a different kind of experience, and a potential for contacts and networking that can move you forward.

The company to avoid, if at all possible, are the ineffectual dreamers. These are the companies that have a product or service that the founders are convinced is the “next big thing”, but the market has decided otherwise, or the company is unable to actually sell the product or idea. The founders and management talk big, and even sound like they know what they are doing, but no product is moving (or no services are being used) and the only thing the company is doing is spending money. Where I’ve seen these be an issue is when the company is multiple years old. On the outside, they look like a viable business. But when you get past the candy-coating, you find it really is a hollow shell, and the company is struggling day-to-day to meet even basic expenses. At best, these are companies that are a lesson in what not to do.

How can you tell? Often, you can’t from just a job interview and a tour of the offices. Trying to do due diligence on a startup is hard, given the lack of publicly available information. You can ask for business plans, marketing plans, etc, but those may only indicate that they know how to write well. The best you can do is be prepared to bail on the bad ones, but also be prepared to give them a fair shake. Working with startups involves some risk.

Would I Go Back To A Big Company?

While it is tempting to say “I’ll never go back to being an employee at a big company”, never say never. However, for me, I would rather work at smaller companies where I can get to know everyone, and where my contribution is meaningful. I like the idea of a small group of people collaborating on something. I find that there is a stronger sense of the team, and a flatter hierarchy means you are working with peers and colleagues, not “employees”. I don’t mind the fact that the “job description” is an open-ended deal, and being able to work on different aspects of the business is interesting and exciting. I don’t mind the risks associated with this type of business, partly because being part of the team means I can have a hand in managing the risk.

But this isn’t for everyone. Working for a startup can mean going outside of your comfort zone, and if you prefer well defined jobs, well defined working hours and are not big on risks, then a startup may not be for you.