I get into conversations with people who have had it with their corporate cushy jobs, and want to venture into some risky areas, aka startups. These are very accomplished people, both technically and otherwise. Somewhere in their late 20s or early 30s, financially secure and willing to take risks. So they want to join a early stage startup in order to test the waters. Should they ? Let's see.
What's the upside in joining a early stage startup (angel funded/bootsrapped) as an early stage employee
Equity - Doesn't matter for this persona, unless equity >= 5%. Typically early stage employees get around 0.5 - 5% of the employee pool. Assuming a $10 million exit for the startup in 3 years, any equity < 5% is an insignificant chunk.
Other startup perks - Don't really matter. Foosball table, vacations, free lunch etc etc - this persona has already experienced all of this in his/her previous job. Not alluring enough.
Ability to grow quickly and less managerial interference - Possibly, this could be a big draw. Mostly in large organizations, this is a bottleneck that bogs down engineers.
Quality of work - Some technology that is poised to take off very wildly, the so called 'rocket ship' in Eric Schmit's jargon. This in my opinion is perhaps the most attractive option, possibly trumping everything else. If the technology/product is technically extremely challenging and is poised for a breakthrough in the next 3-5 years, engineers will be drawn like honey bees.
So given these factors, unless a startup offers the quality of work stated above, it's perhaps not worth plunging into this startup as an employee. My argument is that, when you have made up your mind to take risks, why not start a company, instead of joining another startup. The common feedback is that 'No, I don't have ideas'. Quite frankly, this 'idea' concept is a bit overrated. Given enough time to think creatively and brainstorm, ideas will emerge. Given, your technical abilities and the pedigree, angel funding won't be such a big challenge. But look at the upside. The upside is phenomenal.
Let's assume that the startup fails and there is no exit. The upside is still far greater than the upside you'd have had joining an early stage startup. The failed startup experience is a lot more valuable than the early stage startup employee experience. Be it to do another startup, or to go back to the previous employer or to find another job.
What's the upside in joining a early stage startup (angel funded/bootsrapped) as an early stage employee
Equity - Doesn't matter for this persona, unless equity >= 5%. Typically early stage employees get around 0.5 - 5% of the employee pool. Assuming a $10 million exit for the startup in 3 years, any equity < 5% is an insignificant chunk.
Other startup perks - Don't really matter. Foosball table, vacations, free lunch etc etc - this persona has already experienced all of this in his/her previous job. Not alluring enough.
Ability to grow quickly and less managerial interference - Possibly, this could be a big draw. Mostly in large organizations, this is a bottleneck that bogs down engineers.
Quality of work - Some technology that is poised to take off very wildly, the so called 'rocket ship' in Eric Schmit's jargon. This in my opinion is perhaps the most attractive option, possibly trumping everything else. If the technology/product is technically extremely challenging and is poised for a breakthrough in the next 3-5 years, engineers will be drawn like honey bees.
So given these factors, unless a startup offers the quality of work stated above, it's perhaps not worth plunging into this startup as an employee. My argument is that, when you have made up your mind to take risks, why not start a company, instead of joining another startup. The common feedback is that 'No, I don't have ideas'. Quite frankly, this 'idea' concept is a bit overrated. Given enough time to think creatively and brainstorm, ideas will emerge. Given, your technical abilities and the pedigree, angel funding won't be such a big challenge. But look at the upside. The upside is phenomenal.
Let's assume that the startup fails and there is no exit. The upside is still far greater than the upside you'd have had joining an early stage startup. The failed startup experience is a lot more valuable than the early stage startup employee experience. Be it to do another startup, or to go back to the previous employer or to find another job.
