

Ask HN: Is working at a startup irrational? - silverlake

The opportunity cost of working at a startup makes me question the whole thing. I could make approx. $100k+bonus at a corporate job or $60k+options at a startup. After 5 years, I'll have an extra $200k+bonuses from a corporate job plus an opportunity to move up the ladder and make slightly more money. The startup requires many more hours and much uncertainty for the small chance that those options will pay off.<p>The missing variable is, what is the expected value for those startup options? I'd like to hear HNs guesses as to the odds of success and the amount of money you can hope to make if you're not the founder.<p>FYI: I've worked at a startup that flamed out. I'm looking for a job in NYC and am faced with this decision now.
======
jeffmould
Betting on options is like betting on winning the lottery. Your chances are
slim (you probably have a better shot at winning the lottery).

Startups are fun, dynamic, an adrenaline rush. It is not about the money. It
is about working on something you are passionate about and know that you can,
and most likely will, have a direct impact on the success of a company. A
startup can open opportunities that only may have been a dream for you in the
past.

Yes, the corporate career can provide stability and possibly long(er) term job
security, but I can guarantee you will learn way more working in a startup
than in a corporate career.

Making the decision really comes down to you though. If you are married, have
kids, have significant financial responsibilities, etc... then the corporate
world may have a different appeal to you. Your outside influencers (i.e. wife,
family, etc...) may have a direct bearing on your choice. Not to say you can't
do a startup being married, with kids, and other financial responsibilities,
but you have to know your limits and what your life can handle. In these cases
it is a decision that should not be taken lightly and should be discussed with
your family.

------
variety
Basically, you should only take a significant options stake if you're in love
with the team, the work and the business models for their own sakes. A good
quantifier for "in love with", BTW, is if they're doing something that you
would _almost_ do for free (if you you had your FY money already).

Either that, or you're working for one of those (very few) startups for which
the outsize payout odds are deemed to be especially high, independent of all
the other factors. (Advice from friends who happen to be veteran startup
junkies can be very, very helpful in assessing this). _And_ provided you have
some minimal savings buffer for the case that things go 'poof' -- which is
always more likely than not, even given the best of circumstances.

But if it's just a paycheck you're after, then by all means, go for the
(substantially bigger) paycheck.

------
devmonk
I personally don't think options are usually a good deal unless you believe
that you'll be working for the next Google, Facebook, etc. I worked for a
company that was hot as pizza cheese on your gums straight from the oven, but
I didn't take options because of past experience and advice from others, and
in the end, I was glad that I didn't. Despite its growth, it mostly fizzled,
and in the process of that growth, it took on a great deal of investment, and
those options were diluted like nobody's business.

But, if you really like the opportunity and believe in it, and your family
isn't sacrificed, then go for it. You only live once (well at least that's
what I believe).

------
swombat
Yes, it is irrational. You do it because you love it, or because you can't
imagine doing anything else, not because it's a better risk-adjusted pay-off
than a corporate career.

If you want to make money, go work for a Wall Street bank. If you're good,
you're practically guaranteed to make a very good living as long as the
current financial system endures (which seems likely to be for quite a while).
Compared to that, starting a startup is a small chance of a big pay-off and a
large-ish chance of being fairly close to broke for a very long time.

Of course, the corporate career, for some people, has some extra costs built
in that they don't want to take on, like your soul, your freedom, and other
secondary paraphernalia. Those people typically make the financially
irrational choice and start a startup.

