To be fair, there are good and bad apples in any general population. Startups are no different, and the posted conversation is a complete trainwreck.
In defense of good startups:
1- Some of us pay equal to or more than BigCo, so you're not always making a salary trade-off.
2- Options are a lottery, but with better odds than most people give them credit for: 13% of VC-backed startups exit for over $10M, 5% exit for over $50M, and 2% exit for over $100M, which is what I'd call a meaningful exit for all parties involved [1]. Everybody's experience is different, but many of our early employees can attest that options sure can be worth quite a lot.
3- You get to have real impact at a startup. Try doing that at BigCo.
4- The culture isn't soul-sucking.
If you find the right startup, I think you are "optimizing for happiness". Get paid market, be in an environment where you can have autonomy and impact, get stuff done and shipped, and focus on what you enjoy doing.
You don't have to worry about the millions of ups and downs of starting your own or freelancing. And you have a 1/50 lottery ticket of making it big, and a pretty decent chance of picking up some sizable savings.
> 3- You get to have real impact at a startup. Try doing that at BigCo.
I don't entirely agree. It's possible to do it at BigCo too.
You make it sound as if it's impossible. It's probably harder than at a startup, but not the impossible tone you give to it.
I see a lot of this assumption of #3 and #4. It has not been my experience. Yes, I was certainly a large proportion of the work that was occurring at the startups I had worked for, but overall I wouldn't say the work was that big of an impact to society in comparison to the sorts of work I was doing at other jobs for large corporations. I've been back and forth between both realms for many years, and all the startups I've worked for were high in idealism, low in through-put, whereas all of the large corporations I've worked for were low on idealism, high on mission.
This isn't to say that I preferred the big-corp work over the startup work--ultimately, I see them as two sides of the same coin of corporate cargo-cultism. It's a rare thing to find a company that respects productivity, be it big or small. But to me, it stands to reason that you're more likely to find it in a company that has a track record of being profitable. I prefer to work for myself now, on my own projects and as a consultant (B2B has an interesting effect of putting you on your "employer's" level. As a businessman, I am now my clients' pier, not their peon. It's a difference that makes all the difference).
But the biggest-impact work I've done in my life was for one of the largest manufacturing corporations in the world. At 25 years old, I had a team of developers and support technicians that I managed for a product that went out to thousands of customers around the world to facilitate them in planning and executing major, industrial construction projects. It was a combination of them giving me a chance because of successes I had in other projects (over a very short period of time, I spent longer just trying to get my coworkers to hang out with me after hours in startups), me taking initiative, and them looking the other way when I bent their rules and delivered results.
Second job out of college. Why me? Because I tried, that is all. And this was not even in the suburbs, this was RURAL. You think you need to be in the valley or NYC or Boston? Please, opportunity is everywhere.
Sure, go be employee #3 at the next bullshit iPhone app. Ooooh, you're using Sinatra and Handlebars and a flat UI. Big whoop. What does any of it mean? Put your balls on the table and show me that you can make an app that works across browsers, going back to IE 6, with a hostile network admin and DBA (who even has a DBA anymore), do it like it was nothing, and not complain about it. "oooh, web standards, boohoo" GET OVER IT! Do the work! Get it done. Preferably NOW!
Go to work for Ford or General Electric or Kellogs and if you just stand up every once in a while and toot your own horn, not expect people to recognize your "clear brilliance" over the chaos of their own lives and just hand you things, then you can do a lot of really great work and get compensated very well for it.
And they're much less likely to ask you to sleep in the office overnight. Actually, yeah, that's NEVER going to happen at a big corporation. They will know for a fact that the only reason you're doing that is to make up for goofing off during the daytime hours and come very quickly down on disciplinary action. You think it's cool your startup employer lets you work whenever your want? How do your friends feel about not getting to see you during normal social hours? Oh, what's that, you don't have any friends outside of work.
> And they're much less likely to ask you to sleep in the office overnight.... They will know for a fact that the only reason you're doing that is to make up for goofing off during the daytime
A long time ago, an engineer who used to work at a big old east-coast company told me that management said, "If you can't get your work done in 8 hours, then either you're incompetent and you should be fired, or your boss is incompetent and your boss should be fired."
1- Some of us pay equal to or more than BigCo, so you're not always making a salary trade-off.
True, but BigCo's also have consistent (if meager) raise policies.
2- Options are a lottery, but with better odds than most people give them credit for: 13% of VC-backed startups exit for over $10M, 5% exit for over $50M, and 2% exit for over $100M, which is what I'd call a meaningful exit for all parties involved [1]. Everybody's experience is different, but many of our early employees can attest that options sure can be worth quite a lot.
With a typical engineer slice, a $10m or even $100m exit isn't meaningful. You might get $10-20k per year of vesting. Even in bad years, bankers get better bonuses (without the tax problems.)
3- You get to have real impact at a startup. Try doing that at BigCo.
Startups win that comparison, no question. A startup doesn't guarantee an impact, but the odds are a lot better.
4- The culture isn't soul-sucking.
There are soul-sucking startups and non-soul-sucking big companies. Cultures tend to regress to the mean with size, so the really amazing and really horrible companies tend to be startups, while all the big companies tend to be somewhere in the middle.
> True, but BigCo's also have consistent (if meager) raise policies.
We have consistent (and not meager) raise policies.
> With a typical engineer slice, a $10m or even $100m exit isn't meaningful. You might get $10-20k per year of vesting. Even in bad years, bankers get better bonuses (without the tax problems.)
Depends on when you join. If you join early, $100m will damn well be meaningful. If you join later, I hope you'd only consider doing so if the company has significant traction and should be worth many times more than $100m.
> There are soul-sucking startups and non-soul-sucking big companies. Cultures tend to regress to the mean with size, so the really amazing and really horrible companies tend to be startups, while all the big companies tend to be somewhere in the middle.
I will give you that there are both good and very bad startups. My experience with large companies is that they regress towards the 25th percentile, at best.
Spend more time around the startup before joining and decide what the culture is like for yourself. Any founder can blow smoke up your ass about how awesome the culture is in an interview; spend a week working and you'll get a pretty good idea.
Let's take your $100m exit and do an example. Say you're granted .4% as an A round employee, 30% dilution for a round B, 10% dilution at a round C, then an exit so no round D gives a final ownership percentage of 0.4% * .63 = 0.252%. Say you worked there for four years, you get 100e6 * 0.252 * 1e-2 = $250k before taxes plus strike. Pretax that's a $62k per year spiff, and at best, with good tax advice, $50k / year after taxes. We can quibble about meaningful, but $250k is an ok down payment for a relatively modest $1mm house on the peninsula. We apparently have different ideas about meaningful.
Most startups, even many claiming otherwise pay less than market. You could probably capture at least half that $50k/year in cash, particularly if you're willing to work for goog/fb/msft/etc. That doesn't even touch the variance of that payout.
Also, in expectation and off the top of my head with your success statistics, that $252k is under $50k.
Can't disagree with your math, and that's after a $100M exit.
We too had a low 9 figure exit. Although the money wasn't life changing for employees, the experience was. Winning feels good, man.
a) startups mostly fail, and aren't for most people
b) don't join to get rich, join for the team
c) remember pmarca's insight that market is more important than team for success.
d) whatever the outcome, don't be bitter, or gloat.
In defense of good startups:
1- Some of us pay equal to or more than BigCo, so you're not always making a salary trade-off.
2- Options are a lottery, but with better odds than most people give them credit for: 13% of VC-backed startups exit for over $10M, 5% exit for over $50M, and 2% exit for over $100M, which is what I'd call a meaningful exit for all parties involved [1]. Everybody's experience is different, but many of our early employees can attest that options sure can be worth quite a lot.
3- You get to have real impact at a startup. Try doing that at BigCo.
4- The culture isn't soul-sucking.
If you find the right startup, I think you are "optimizing for happiness". Get paid market, be in an environment where you can have autonomy and impact, get stuff done and shipped, and focus on what you enjoy doing.
You don't have to worry about the millions of ups and downs of starting your own or freelancing. And you have a 1/50 lottery ticket of making it big, and a pretty decent chance of picking up some sizable savings.
Obviously, I am biased :)
[1] http://www.quora.com/What-is-the-truth-behind-9-out-of-10-st...