The response from my first article was huge! I got so many DMs on Twitter that I decided to rush out the next post about the startup life.
Today, let’s talk about the decision you have to make when you leave your cushy/comfy/reliable job.
My experience has been someone ‘hired’ by the startup founders. Starting your own gig is a very different beast. Listen to my podcast with Nick McCarter, CEO of Chartis Federal (link below). He gives a great, honest run through of his mindset and stage of life when he founded Chartis. He even said he wouldn’t do the same if it were today! WHAT?! Timing matters!
If you get approached for a role at a startup, you have a lot to consider. There are two huge reasons that people will leave a large company and go to something tiny.
1) The lifestyle and day to day of a tiny company is agile, never stale and there typically isn’t much in the way of politics to deal with.
2) The old Risk vs Reward scenario. If you’re in early enough, you can get a big, big payout.
Let’s break both of these down, of course, lined with my own opinions on the matter!
My favorite time at a startup is the first year. In that time, I have found that roles are fast and loose. This is the epitome of ‘GSD’. If you aren’t familiar with GSD, well, I can’t tell you, since this is meant to be family and work friendly… I mean, it stands for: Get Stuff Done. There is no other time in a startups life where you can have an exhilarating morning, followed by a panic stricken afternoon. That is the wildest roller coaster. It’s not the same as a little belt-tightening at your Fortune 500 company. This is ‘do or die’, ‘shut the company down’ levels of panic. Oh wait, I was talking about GSD.
Let me tell you one of my favorite stories from Perch Security. I started on day one of Perch as VP Engineering. Our overall task was to help companies make their community sourced intelligence actionable. Huh? Companies that are part of nationally important verticals (financial services, healthcare, etc) are members of communities that share cyber threat intelligence. We built a product and service focused around enabling companies to use that data. We built out our prototype, had a few clients, and it was all good. One day, we woke up to the news about a report out of US-Cert regarding Grizzly Steppe, a report focused around some Russians hacking something or other.. There’s always news in cybersecurity of another threat. It happens all the time. If you’re not in the industry, you’d be surprised how many times new information is shared. The point of this story though, is that our platform HIT on the Grizzly Steppe indicators without any intervention! It was one of those ‘Ah Ha!’ moments when we truly saw our automated processes were not only working, but they were providing actionable alerts. Unfortunately (or maybe fortunately?) in that case, they were all false positives, but it was something awesome to truly celebrate!
Risk Vs Reward
Everyone thinks they’re going to hit it big when they join a startup. As long as they get some stock options, they’ll be set for life! Heck, ever hear the story about the painter @ Facebook who eventually made millions? Instead of getting paid to paint a wall, he got some stock options. .BAM. Millions!
Guess what? That doesn’t happen! Ok, obviously it happened once, but, odds are that it’s not going to happen to you. nPulse was acquired by FireEye back in 2014. I was employee #1 after the founders. I didn’t make $200 million like Choe. Dang, that would have been sweet. The money I made was fantastic. Life changing, but I couldn’t retire!
There’s a reason why tech companies that reach $1B in valuation is called a unicorn. The odds of it happening are slim to none. That doesn’t mean you can’t do well, but, make sure to level your expectations vs reality. Top 5 employees can make some good money. Next 5 can make some money. After that? Who knows. There are so many situations that can change those ranges (1-5, 5-10, etc), but if it’s a relatively small company at acquisition, it’s probably true. If you joined Facebook in the top 20, well, you’re probably a multi-gajillionaire, so I’m not talking to you.
I’ve realized if you want to retire, if you want to make enough money to not HAVE to work, you have to start the company yourself. If you’re successful, then you can be rewarded as you deserve. No one deserves more than founders, and if you think your founder got too much in a liquidation event, you’re wrong. They deserve every penny, because they put their life on the line. Ok, not alive/dead life, but family, financial and social life. They put all that at risk to follow an idea, a passion or a dream. The founders of the startups I’ve worked for or advised have all worked ungodly hours. They are stressed out, because everything is riding on them, especially in the early phases. You may be an amazing engineer (like me, right?), but you are an employee. You don’t get to expect the same levels of acquisition compensation that the founder of the company gets.
Does that mean you shouldn’t join a startup?
Not necessarily. It may be a helluva lot of fun. You may learn enough to do your own thing. You might learn that you don’t want anything to do with a tiny company. You may find peace, or fun at a large company. Heck, you may be able to influence a much larger audience at a Fortune 500 company. Over time, you might actually make more money if you’re wise with it, especially compared to taking a lower than market salary based on the hope of stock options that never pan out.
What’s your best or worst startup story? Someone ever make more than you on an acquisition that “shouldn’t” have in your mind? Tell me the (appropriately anonymized) story, I’d love to commiserate!