
The Career Path I Didn’t Consider, But Should Have - jseliger
https://www.themuse.com/advice/the-career-path-i-didnt-consider-but-should-have
======
courtson5
The author sells equity as a main motivator in joining a startup. But if you
believe in equity, you are far better off being a founder than an early
employee

Being the first employee (or an early employee) of a startup seems to be the
worst possible choice.

* none of the stability of a larger company * a salary which is likely less than market * 10 to 100 times less equity than a founder (So, in an exit, you'll make 10 to 100 times less money! Not all startups have billion+ dollar exits.) * a huge amount of responsibility - might not be as much as a founder, but still comparable * less influence and decision making ability than a founder * less insight into the finances of the business than a founder (without that insight, how will you know if that equity is worth anything?)

The only benefit I see of being an early employee is if the founder is a
seasoned veteran who has already done this who you can learn from and be
mentored by. But the vast majority of ycombinator founders seem to be new to
the startup game.

~~~
birken
You are speaking in some really large generalities. Being an early employee of
a startup isn't indentured servitude.

If you are offered little equity as compared to the founders, don't join. If
the founders won't share the financials of the company with you, don't join.
If they wont pay you the salary you want, don't join. If they wont offer you
the opportunity to grow into the role you want, don't join.

And you can't argue that every company is like this, because once upon a time
I was employee #1 of an early stage startup and your post doesn't align with
my experiences at all.

I'm not taking anything away from founding a company, I think in many cases
that is a great idea. But being an early employee isn't such a horrible deal
if you are selective in what jobs you take.

~~~
derefr
If there's a market for lemons, you'll get two types of people: people who
realize it's a market for lemons and stay clear of it—and people who don't
realize this, and end up exploited by the market.

Tu quoque: "If you find out the car has water damage, don't buy it. If you
find out the car was in an accident, don't buy it. If you find out the car was
stolen, don't buy it."

Nobody wants to buy such cars; people are effectively tricked into buying such
cars by the information assymetry inherent in the market. This is why there
are lemon laws.

And just because there are good used cars for sale, doesn't mean it isn't a
market for lemons. The good cars (and jobs) sell and sell quickly, while the
bad cars (and jobs) stay on the market—so the market becomes saturated with
bad cars/jobs, and the actual good cars/jobs become so rare that people invest
more in pursuing them than they're worth, creating a sort of dollar-auction
market failure.

~~~
GotAnyMegadeth
Sorry for the OT.

> The good cars (and jobs) sell and sell quickly, while the bad cars (and
> jobs) stay on the market—so the market becomes saturated with bad cars/jobs,
> and the actual good cars/jobs become so rare that people invest more in
> pursuing them than they're worth, creating a sort of dollar-auction market
> failure.

This, at least in my experience, is exactly what happens with musicians
seeking bands.

~~~
marcosdumay
You can bet that for bands seeking musicians it look exactly alike.

The market for especialized labor is full of lemons on both directions. Yet,
we don't get any coordinated action to increase transparency.

------
jeffreyrogers
As always, when someone has something to gain from giving you advice, be
skeptical, even if it seems well intentioned.

It is fairly disingenuous of VCs and other investors to advocate for talented
young people to start businesses without providing data on how most startup
founders (and especially employees) do. From the limited amount of data on
this I've seen, it looks like your odds of making any substantial amount of
money is quite small and certainly if you're talented enough to found a
successful startup you're probably talented enough to get a higher paying job
at a more stable company. It might not be as glamorous, but it will give you
time to focus on the things that are more important to you than money.

------
staunch
There are millions of people in the US alone that would jump at the chance of
taking a good startup job or creating a startup themselves. They don't need
convincing. But startups don't want to hire them and investors don't want to
fund them. Because they're poor, under-educated, and different. They also make
up the majority of the smart and talented people.

It would require actual effort and understanding to work with those kinds of
people. A lot more work upfront. Some of them haven't even read Homer, the
plebs.

Instead, wealthy investors ignore those millions and spend their time trying
to convince a handful of wealthy entitled children to temporarily forgo the
easy life at Google or Accenture.

~~~
bitL
I am searching for a business partner for eCommerce that would do the whole
business part while I will be plugging in and extending automated sales
technology I created and use in my other companies, with 50/50 equity split
and the initial operating capital provided by me if necessary. However, almost
nobody wants to start from scratch, growing the company as their baby (despite
having the benefit of immediate use of my mature technology, spending at most
1 hour a day running the business anywhere in the US and non-interfering from
my side on their business style except for advices on proven business model I
operate and avoiding legal problems); they expect earning $100k within the
first 3 months or so with no work at all. Sometimes I feel like there is an
insurmountable obstacle between their dreams and effort they put into the work
to get where they want to be...

~~~
ffumarola
Surprised you're having issues filling this. I come from a Supply Chain and
Ecommerce background. Currently VP Product for an ad tech company. Let me know
if you'd like to chat. My HackerNews username @ gmail, or on Twitter.

------
cpks
Completely self-serving, where it is coming from, and completely wrong. An
early employee at a startup will get fraction-of-a-percent equity (at time of
exit, and often, at time of joining). And that overstates the amount of
equity. Investors, and increasingly, management, get things like liquidity
preferences. You need an exit in the hundreds of millions before that amounts
to real money. Employee #5 at Google or Facebook does very well. Otherwise,
you make _a lot_ more at established industry. There are a lot of suckers out
there who'll take those jobs, so I don't see them getting better.

Where do you learn more? It depends on the startup and the industry. If it's a
YC startup with a pair of 21-year-olds at the helm? I'd actually say
mainstream industry. Now, if you compare co-founder to call center --
definitely go co-founder, but:

1) Call center is an unusually bad job. 2) The type of person hired by a call
center is unlikely to get a startup job, unless the startup sucks at hiring.
Seriously.

------
cj
> There are a few warnings that go along with working for equity.

Another warning: Equity can be expensive. It can cost _a lot_ of money to keep
that equity when you leave the startup.

I was at a startup for 2 years and had 2% vested equity. I left the company 2
months ago. If I want to keep my equity, I have to exercise my stock options
and pay ~$30k within the next month. If I don't, the equity disappears
forever.

~~~
StavrosK
Is that because the stock hasn't vested?

~~~
jordanthoms
It's because almost all the time you are actually issued options, not shares.
The options allow you to buy a certain number of shares at a lower price, but
you need to pay that price to exercise them.

------
lkrubner
She says:

"There are a lot more startups today, and you can in effect become an early
investor in one by going to work for it."

It's important to remember that she means this for one very particular
industry, and she is talking about a very particular kind of startup. Overall,
there has been a steady decline in the number of startups during the last 30
years:

[https://www.fedinprint.org/items/fednsr/707.html](https://www.fedinprint.org/items/fednsr/707.html)

"The first observation is the steady decline in the firm entry rate over the
last thirty years, and the second is the gradual shift of employment from
younger to older firms over the same period. Both observations hold across
industries and geographies."

The great era of starting a new business in the USA was several decades ago.
It is much more difficult to do so now, and that is perhaps part of the reason
why there are less entrepreneurs now, and less new companies being founded.

~~~
logicallee
I thought you were a new user who had no idea where he was right now! :)

~~~
logicallee
(missed edit window.) What I mean is that, just as the OP does (who is in fact
a very experienced HN contributor despite this one comment reading as though
written by an outsider), we all know the context that is meant here with a
specific kind of startup, and don't presume to generalize it.

"The great era of starting a new business in the USA was several decades ago"
\- except for building the next instagram or airbnb while having $0 in capital
and maybe 8 months of coding experience, oh and not even any business
experience, perhaps still being a twenty-something who has never done
anything. Then "several decades ago" probably wasn't the best time to build
the next social startup.

But the above ridiculous constraints are still enough for some of us, people
reading this very thread, to succeed at this. Literally. That doesn't mean we
presume to extend this to the rest of America's 20 million entrepreneurs and
business owners. That's why I said it looked like he was a new user who didn't
know where he was for a second :)

------
minimaxir
> _My 20-year-old self didn’t consider joining a startup—or founding one—as a
> career option, but I hope you will._

I would think that the startup environment, and the job environment in
general, is much different in 2015 than in _1993_ , which puts the framing
analysis as a post-rationalization that's essentially comparing apple-and-
oranges.

> _And lastly, you will probably have to work long hours. But that wouldn’t
> have mattered to me in my 20s._

Isn't one of the primary criticisms of modern startups that they abuse naive
fresh-out-of-college graduates?

~~~
hnnewguy
> _Isn 't one of the primary criticisms of modern startups that they abuse
> naive fresh-out-of-college graduates?_

Precisely. A 20 year old should go out and get a job and gain some experience
in a space and then, _maybe_ , they'll be able to identify and solve a real-
world problem.

I had very little sense as a 20 year old. And yet, judging by some of the
articles I read here, I was positively _worldly_ compared to some of the kids
who are getting big money and starting companies. I have a hard time coming to
terms with why seemingly sensible adults think this is a good idea.

~~~
a3n
> and then, maybe, they'll be able to identify and solve a real-world problem.

And also then, maybe, they'll be able to judge whether a particular startup is
solving a worthwhile problem and has a hope to succeed.

------
memset
I started out my career at Fidelity Investments too! And after a couple of
years, moved into the startup space.

I agree with many points here - you learn infinitely more quickly, you work
infinitely harder, and this has given me business and engineering acumen far
greater than had I stayed at Fidelity.

I will disagree with the overall tone that, when we are young, salary is less
important. It is certainly true that many of us have fewer financial
obligations, besides perhaps student debt and rent.

But I would always advise against joining a startup at significantly below
market rate just for the equity. Even as a 1st or 2nd employee, you can only
control the direction of the company so much, you're working just as hard as
the founders, but the upside is a fraction of what it is for them.

(Let's also remember that you're typically not granted stock, but stock
_options_. So if you have student debt, join a startup as a customer
experience associate, you may not even be able to afford to exercise all of
them when you leave!)

If I had gotten a job at Google after graduating (let's say I had applied and
gotten in) my starting salary would have been higher, and that would have
served as an anchor point for all future salary negotiations - for the rest of
my life! I've probably left ~100k on the table over the past 5 years due to
this alone.

Today, I still have few financial obligations, but wouldn't take an
appreciably lower salary for any company until I start my own. I have enough
experience now to be able to negotiate that kind of deal, but if I were to do
it again, I would try to be a little smarter about this point as well.

~~~
tslathrow
Fido is a great shop and 100K is relatively cheap for that important of a
lesson... and of course we shouldn't ask too many what-ifs.

------
msoad
The risk of a startup has moved from investors to founders and now from
founders to employees.

Investors diversify their investments to minimize the risk. They don't really
care if a particular startup they invested in will fail. They have tons of
other investments...

Now with this new generation of "entrepreneurs" who start five startup at a
time, they are not too afraid of startup failure either. They did diversify
their risk too!

The only one who really loses when a startup fails is the employee who bought
promises of "learning a lot" or "probably getting rich" and compromised
his/her income and lifestyle.

It's very hard to find a startup that is like early Google where everyone is
firmly believing they are doing something huge and everybody is all-in the
company.

~~~
scobar
I generally agree with you that investors and founders mitigate their risk
through diversity and networking. However, I wouldn't single out employees as
"the only one who really loses when a startup fails." Like you said, choosing
a Google-like startup is tough, and most founders believe theirs will be
incredibly successful when they hire early employees. But I can think of at
least one example where the employee of a failed startup will have benefited
greatly, possibly more than the investor and founders.

Imagine an employee who chose the startup because she passionately shared its
vision, and the position available was exactly what she wanted to be doing.
She worked out a budget so that her family would be fine with the lower
salary. She gets to do what she enjoys in a fast-paced environment learning
many new skills alongside others who share her vision. If that startup fails,
she's out of a job, and the equity she earned is worthless. If she was paid
enough to stay within her desired lifestyle range without taking on debt, and
she enjoyed working at the startup much more than she would have enjoyed being
a cog in the BigCorp machine working on projects she felt indifferent about,
then I believe her risk as a startup employee was relatively low.

Opinions will obviously vary depending on how important compensation (after a
certain threshold) and prestige are versus working on what you want.

~~~
derekp7
Some people make very good employees, but lousy sales people, when they are
trying to sell their skills to a prospective employer. So becoming suddenly
unemployed, especially after having a year or two of substandard pay (so no
savings) can cause damage. Especially if it takes 6 months to find another
job.

The only way I personally would work for a startup is if I could purchase
supplemental unemployment insurance. I know you can get unemployment insurance
on various loans (mortgage, car, credit cards, etc), and state unemployment
pays a small amount. But I would like to see an option where the startup pays
an insurance company to cover my full salary for up to a year (or until a job
is found) after a business folds.

------
jacquesm
The only reason I can think of to join a start-up as an early employee is that
you want to some day do a start-up of your own and you want to acquire the
relevant experience.

From a financial perspective it is a lottery ticket with a very high price and
a low chance of paying out.

~~~
ryanSrich
Not really. Unless you're using equity to compensate for a lower salary, which
you should never do.

If the startup is offering a fair market salary + equity the only real thing
you're risking is stability. Yeah you might only have the job for a year
because the company goes under but short term employment is more common place
now so that seems like a low risk.

~~~
jacquesm
> If the startup is offering a fair market salary

In that case, yes. But that's definitely not the way quite a few of those
pitches go. It's more like: take this below market salary and this tiny bit of
equity which will surely be worth more one day than the salary that you're
foregoing today.

Of course it takes two to tango and you're free not to believe that spiel but
I've seen it more than once in my own career.

~~~
ryanSrich
I interviewed with around 20 startups in the Valley about a year and a half
ago. Hands down every single startup that made me an offer had a shit salary.

After I ditched the idea of working in the Valley based on my experience
interviewing there I decided to focus my search on distributed teams only.

What I found was surprising. Not only were these new startups outside the
Valley offering remote work but almost all had higher salaries. It was crazy.
Here I was thinking that the only way I could earn a high paying wage was to
live in one the most expensive cities in the world. Little did I know that I
could earn a market salary and live anywhere.

If I could give anyone advice about finding a new job at a startup it would be
to seek out companies offering remote work. It's the only way to go.

~~~
sireat
What kind of skillset do you have though?

Here on HN there has been constant bemoaning over difficulty of finding good
remote work.

The biggest issue has been that remote work pretty much requires living in low
cost of living locations.

~~~
ryanSrich
I mostly brand myself as a Product Designer. That job typically requires a
decent knowledge of both design and development. As far as me specifically:
UI, UX, CSS/SASS/HTML/JS, Rails & Ruby, Design tools like sketch and CC and
some working knowledge of iOS development.

------
fredfoobar42
So she managed to graduate without student loans? All her obligations were
rent? Good for her. Most 20-somethings coming out of college have a shitload
of student loan debt. Myself included. Equity sounds nice, but it doesn't stop
Sallie Mae from calling and demanding her money back, plus interest.

------
7Figures2Commas
> And for much of my 20s, I worked long hours anyway—but others benefited
> financially from whatever I did, not me.

This is not true, unless Livingston was not paid. An accurate statement would
have been "I worked long hours anyway—but others benefited _more_ financially
from whatever I did."

But guess what? This is true when you're an employee at a startup too.
Founders, executives and investors will almost always have significantly more
to gain than you, and their relationships with the company are going to be
structured more favorably than yours is. So going to work at a startup is
hardly a panacea for folks who can't live with the fact that somebody else is
profiting from their labor.

> And remember, working isn’t just about making money. It’s also a form of
> education. And at a startup, you learn a lot faster about how companies work
> and how to make a great product than at a big company.

This isn't necessarily true. Lots of startups are chaotic and highly
dysfunctional. And many don't produce great products. Depending on the type of
startup you go to work for, you may exit the experience with a whole lot less
in the way of transferable skills than you expect.

> ...having to explain to crackpots why their mutual fund account went down
> that day.

Tangent: I'm really surprised at what's coming out in some of the recent
writings of people associated with YC. It's unfortunate that some folks who
have money in mutual funds don't understand how they work, but the use of the
word "crackpot" here is as unjustifiably contemptuous as claiming that "most
people are very lazy"[1].

[1]
[https://news.ycombinator.com/item?id=8858942](https://news.ycombinator.com/item?id=8858942)

~~~
Terr_
>This is not true, unless Livingston was not paid.

No, the word "benefit" implies _additional_ value (like "profit") above and
beyond the break-even trade.

It's entirely possible to "not benefit from the work" on a nonzero salary.

------
anonomist
The "work for a startup so you get high risk equity" argument is a bit silly.
You're better off working for a high salary and investing as much as possible
into asset classes with less risk. However, the "you'll learn a lot while
working for a startup" part of the argument makes sense. You're investing in
your own human capital and if you can't bet on yourself who can you bet on?

------
siliconc0w
It's also good to diversify. Bigger companies solve different problems and
reach more people. This makes the problems often more challenging and
interesting than startups.

You may have an easier time implementing the newest/fanciest tech at a startup
but it's often the big companies where that tech is being created or where it
could really move the needle :O.

------
nkangoh
I've been doing some heavy investigation to how (and where) I should start my
career in terms of maximizing learning. I have friends who will be working at
Microsoft, and other friends who criticize said 'Microsoft' friends, saying
that they won't learn much. Others say you learn the [most] at big companies,
and a small minority say that start-ups are the way to go when you're early in
your career.

I wonder what advice Jessica (and the HN community) would have for people like
me, as I imagine there are a lot of people like me visiting HN.

~~~
larsberg
> I have friends who will be working at Microsoft, and other friends who
> criticize said 'Microsoft' friends, saying that they won't learn much.

There are many things to criticize about the dev experience at Microsoft, but
that's definitely not one of them. Unless you're in a quite dysfunctional
group, there is extensive early-career training and explicit mid- to late-
career mentoring there that really distinguishes it from startups and other
big companies. As a manager there, I was held responsible for growing my
organization's devs much more explicitly and to a much further "minimum
ceiling" career stage than I've seen or heard of from any peers at other
companies or other places I've worked.

Of course, things may have changed since I left that position in ~2006.

------
pantherette
This is interesting to read but a one-sided perspective. It can also go the
other way, where going into the startup world is a big career mistake and is
later regretted. A number of my female friends joined startups right out of
college. Multiple busts/layoffs/firings later, they realized they had a
disjointed resume, with short experiences at companies no one has heard of,
and worse - few skills to show for it. They never progressed beyond customer
service and various other administrative, low-paid positions. On the other
hand, after a short stint in consulting/banking, other friends gained skills
that they could leverage for much better positions in both startups and the
corporate world. Yes, working for a company like Deloitte or GE expands your
choices later on. For some reason, lack of career progression seems to impact
women in startups much more than men. I think it's because there are so few
women at startups - and male founders bring in their friends/other men they're
comfortable with for interesting positions. The good news is that although
they "lost" 4-8 years where they didn't learn much, these women were able to
finally get going with their career - either through graduate school (MBA, law
school, going into medicine) or getting an entry level job at a large company
(Facebook, Cisco etc) where they were able to work with MUCH more senior
people in a business team and actually learn things.

------
spitfire
Why is it so important to join a company that is structured in a particular
fashion?

Rather than work in an industry that you love? It seems to me to be a case of
function following form.

------
CurtMonash
Most of the comments are missing what to me is the main point, which to me can
be boiled down to:

\-----

1\. Early in your career, gaining knowledge, skills and proof of same can be
more important than immediate income.

2\. Doing something for which you're "underqualified" is commonly a fast way
to learn (and to prove that you've learned).

3\. Start-ups are relatively likely to pay you to do something for which
you're underqualified.

------
anindyabd
Basically, college grads today should do exactly what college grads were doing
during the dot com boom? Yeah sure that's great advice!

------
aliston
For what it's worth, I chose the small startup offer over the name brand offer
after graduating from a top school. My advice would be to TAKE THE NAME BRAND
OFFER. Jessica's points were not true in my experience.

"Yes, startups are very risky, and they often fail. But when they don’t fail,
their stock can become quite valuable."

The startup I worked for actually was pretty successful by most measures. In
fact, I've now worked for two "successful" startups as a relatively early
employee -- one acquired for XX M and another for XXX M. When all was said and
done, I would have made more had I gone to a company like Google. You will get
diluted, the investors will get their liquidation preference, part of the
acquisition will go to retention incentives, and whats left over will be a
fraction of the numbers you see in the media. Literally, the only way you will
make anything comparable to a founder exit is if the company IPOs and becomes
Facebook.

Also, most big companies give large stock grants. When I graduated, the stock
grants Google was giving to recent grads would now be worth well into the 6
figure range. Not life changing money, but comparable to what you would get in
a decent sized exit at a startup. I'd also add that joining a company like
AirBnb is not the same as joining a startup. I'd imagine the AirBnb experience
would have more in common with joining Google than joining Zip-tify-io-ly.

"It’s also a form of education. And at a startup, you learn a lot faster about
how companies work and how to make a great product than at a big company."

NOT-TRUE-AT-ALL. If you go to work at Google, you can still work on a new
product. The big difference is that at Google you will be surrounded by
experts in their fields. You will learn what it takes to build a scalable
product, how to build things in a modular and parallelizable way, solid coding
practices, how to work on a team etc.

At a startup you "might" learn those things, but you very easily might not. My
experience is that a lot startups carry massive technical debt. Their products
tend to be hacked together because they didn't have an expert in (python,
javascript, databases etc.) when they built the product. So, worse than not
learning a lot, you might be learning exactly how not to build a product and
spending all your time cleaning up spaghetti code. Plus, at Google, your
product might immediately be in the hands of millions of people. The vast
majority of startups never even find a product-market fit.

Bottom line, in my opinion it makes no sense to join a small startup as an
employee from either a financial or career perspective. If I had it to do over
again, I would have gone to a more established company with name-recognition
out of school and built savings, skills, a social life and connections. After
a couple years at one of those companies, you can write your ticket to any
role in the industry, including founder of a VC-backed startup. You'll have an
insane network, enough savings runway to build your idea and actually have
time to enjoy your early 20's social life.

~~~
pantherette
Thank you for providing this perspective, I completely agree.

------
ExpiredLink
Secure corporation vs. high-risk startup seems to be a false dichotomy. Many
people start a business that doesn't even remotely aim to be the next Google
or Facebook: highly specialized software, support, infrastructure, ... That's
a career path worth considering for all who can think and act economically.

------
amirmc
Honest question. How many 'early stage' startups would hire an English major
straight out of college? The only way I see this working is if they already
know the founders beforehand or if there are varying definitions of 'early'.

~~~
taternuts
This was what I was thinking as well. The article is written as if she had
turned down the option to join a startup or even had a chance to join one with
her skillset, and I have a hard time believing that is the case.

------
dcpdx
Graduates fresh out of college have the one thing that's most important for
long-term wealth accumulation on their side: time. Take two scenarios, for
instance, both assuming retirement age of 65 and a long-term average stock
market return of 7% annually.

Scenario one: Smart 20-year-old college grad accepts an offer to go work for
Big Tech, Consulting, whatever. Their salary allows them to pay down any
student loan debt they might have, build a cash cushion, and sock away
$10K/year for retirement. At 35, when they've built valuable industry
experience and connections, they decide to go out and do their own thing. They
stop investing in their retirement account, putting their cash into the
startup or raising money, and let the retirement account sit and grow with
compound interest.[1]

Scenario two: Smart 20-year-old college grad decides against the BigCo route
and founds a startup (assuming this is even feasible given any loan debt they
might have). Maybe raises a small funding round, takes a low
salary...everything goes back into the business. There is no investment into a
retirement account. Let's say they meander through startup land up until 35,
making some money here, losing some there and given the high failure rate of
startups never really sees the "big exit". At 35, when things like marriage
and family happen, they're forced to take a job at BigCo (or MediumCo,
SmallCo, whatever) and finally have the means to start investing something
into a retirement account. Let's get aggressive and say they put in the same
$10K/year that scenario 1 grad did up until 65 (hard to do if you start having
kids, buy a house, etc).

At 65, scenario 1 grad would have $2,046,783 in their retirement account after
just 10 years of investing $10K/year and then letting it sit and collect
compound interest. Scenario 2 grad would have just $1,010,730 in their
retirement account after investing $10K/year over a period of 30 years. The
difference between scenarios comes out to over a million dollars!

Obviously there's an endless list of variables that could throw a wrench in
this model, but the point is that people who fail to assess the time value of
money and the opportunity cost for a dollar spent (or not invested) today vs.
one invested over the long term do so at their own peril. If you're 20, just
$1,000 invested into the market once will turn into $21,000 when you're 65. If
you keep putting money in regularly, this amount will grow significantly and
the sooner you start the more it will grow. It's up to each individual to
determine the right path for them, and I'm not saying it would never make
sense to go do a startup when you're young (you have more energy, creativity
etc), but you must be aware that the tradeoff is losing valuable years early
in your financial path that you will never be able to get back. Arriving at
the same spot at 35 that you could have started at at 20 will put you
significantly behind others who have used those early years to put the miracle
that is compound interest to work for them.

[1]
[http://www.moneychimp.com/calculator/compound_interest_calcu...](http://www.moneychimp.com/calculator/compound_interest_calculator.htm)

~~~
ashark
None of these numbers are adjusted for (estimated) inflation, right?

For instance, $1,000 from 1969 was worth the equivalent of over $6,000 in 2014
(45 years later, same as "start work at 20, retire at 65" examples)

So the benefits of investing, while not poor, are substantially less
impressive than they appear from the raw numbers. That $21,000 of 2060 dollars
might only buy as much as $3,500-4,000 in 2015, when that first $1,000 was
invested.

~~~
refurb
You can ignore the impact of inflation since his argument is that the earlier
investing results in a greater net worth at a later time.

------
mattmurdog
Worked at 4 startups, 1 got sued, 2 went down, 1 chugging along barely
breaking even, stock worthless.

Should have taken the salary.

------
adamzerner
I suspect that these arguments are very familiar to HN readers. Thus, I don't
know why it's on the front page.

Sure, Jessica Livingston is a reliable author, but most readers already had
high enough confidence that these arguments are true such that this article
didn't change much.

~~~
minimaxir
> _Thus, I don 't know why it's on the front page._

The ranking algorithms are really weird on the weekends due to the lower
volume of submissions.

------
lostcolony
'Yes, startups are very risky, and they often fail. But when they don’t fail,
their stock can become quite valuable. I wish I’d taken a job as an early
employee at a startup and gotten some equity when I graduated from college'

The author means she wishes she'd joined a -successful- startup. That, or she
wishes she'd had better challenges out of college, ones that she still could
have completed, though (rather than just taken a job at a startup yet failed
to be productive at it). The problem is that the former is impossible to pick,
and the latter isn't guaranteed just because you joined a startup.

You should be picking a job at a startup with the assumption that the startup
will fail. Is this particular startup opportunity you're looking at (not 'it's
a startup!', but, 'it's a chance to work at X, using technologies Y, with team
members of Z, management seems good, the environment seems good, the
compensation is good enough') worth it, given that?

And if you take it, periodically ask, given this startup will fail (take that
attitude, even if things are beginning to look positive), is the environment
still worth it?

The fact it's a startup, the fact it includes equity, are -terrible- reasons
to stay at a job that you aren't growing in and learning to enjoy.

I've experienced good enterprise jobs, where I felt I had a massive say in
what technologies were used, in what tasks we prioritized, and felt extremely
responsible to get things done, to where I felt I was constantly learning, and
better yet, felt incentivized to go learn more on my own. I felt that my
efforts were recognized, that my management gave a damn, and that collectively
my department was effective, and supportive, and that my time was respected.

I've experienced bad startup jobs, where I felt micromanaged, that I had no
say, that my tasks were constantly shifting and never under my own control,
and that the existing cruft from prior pivots was so large that I had no real
freedom to experiment or expand into the areas other people, who were more
knowledgeable about the code, were working in, and by the time I left I felt I
had learned nothing, and felt so drained at the end of the day I had no
inclination to do anything on getting home. I felt unrecognized, viewed
largely as a useful code monkey, that my time was not respected, and that
collectively everyone was just in it for the paycheck and the hope of an
eventual payout of their equity.

Take articles like this as reasons to consider a startup, but NOT as "startups
are better". Just because something is a startup is not a reason to take it,
just as it's not a reason to dismiss it. Whatever opportunities you face are
specific to you, and they should be evaluated by you based on their actual
merits.

------
graycat
Clearly since Ms. Livingston was graduated from college, she has learned a lot
about the economy, business, start-ups, making money, getting financial
security, careers, and jobs. And likely and apparently she got a good
marriage. Good.

History

But nearly unbroken history of at least the past 200 years shows that the
_knowledge frontier_ she reached keeps moving forward. So, yes, likely Ms.
Livingston knows more about start-ups, etc. than her mother did, but, even so,
it is not clear that she knows enough about start-ups people in their teens
and 20s need to know now to do well to get started on doing well in the rest
of their careers.

Do well? Sure: Have to select the good start-ups and f'get about the rest. How
to do that? Not easily, e.g., the venture capital world tries but, from some
data posted by VC Fred Wilson on his blog AVC.com (1) about 2/3rds of the
start-ups he funded flop (don't do well, or some such) and (2) on average the
return on investment (ROI) of US information technology start-ups is poor,
less good than Ms. Livingston helped obtain in her first job in Boston that
counted the minutes she was on her coffee breaks.

Sure, Ms. Livingston might have majored in computer science and joined
Microsoft in 1990\. Alas, we come this way only once, and we don't get do-
overs or re-dos, at least not until we get a time machine.

So, what to tell young people now?

Since Ms. Livingston is talking about start-ups mostly in _information
technology_ , we should consider such things, and there is less to the
significant history there than often _meets the eye_ :

(1) In the 1930s, Bell saw clearly that vacuum tubes were too big, expensive,
unreliable, and hot for the future of the US long distance phone network. So,
a better amplifier was needed. They had a _solid state_ rectifier, so what
about a solid state amplifier? They started a project. WW II got in the way,
but soon after the war, presto, bingo, fireworks in the sky, a giant step for
Bell and a much larger step for mankind -- the transistor.

Exercise: Why so important? At the time Bell saw the importance for
civilization and, thus, decided not to patent the transistor. So, write an
essay that might have been written in, say, 1949, on why the transistor should
be so important.

(2) Soon enough the Cold War caused the US DoD to want a _lot_ of digital
electronics for _aerospace_ , and thus, erupted from Stanford, due in part to
Dean Terman, Silicon Valley to supply electronics to the US DoD and later
NASA.

(3) Fairly soon Silicon Valley saw how to put several transistors on one piece
of silicon and make _integrated circuits_. Gee, could make little devices! An
electronic calculator to replace all those mechanical parts? Sure: But, still,
need a lot of transistors, maybe more than for just a small, simple, general
purpose computer where the rest of the calculator functions are just from
software? Yup. So, bingo, simple microprocessors.

(4) NSF: MIT had some ideas for interactive computers with a lot of security.
So NSF funded their Project MAC which did the operating system Multics with an
hierarchical file system and security features _capabilities_ and _access
control lists_. For authentication, MIT did Kerberos. Then Kerberos made use
of RSA encryption, also from MIT. Big things still with us; moving right along
here.

(5) Bell Labs again: They wanted word whacking. DEC had a mini-computer, so
Bell borrowed a little from Multics, etc., wrote a simple operating system
Unix written in a simple programming language C. Later Bjarne Stroustrup, also
at Bell Labs, wrote a pre-processor for C to support software _objects_ \--
the pre-processor was called C++.

Since Bell was a regulated monopoly, they couldn't sell Unix so essentially
gave it away. A group at Berkeley, as I recall funded by the US DoE, did more
with UNIX and made their work available as the Berkeley Software Distribution
(BSD).

Unix became Linux, and C++ and software objects are still with us.

(6) Lots of people, not just Bell, were struggling with typing. IBM had their
Selectric and, eventually, a _correcting Selectric_ with a little white ribbon
that would remove from the page a character struck in error. But, why no
actual word whacking? Okay, Apple II, IBM PC, WordStar, etc.

Biggie. Really big biggie.

(7) We got Microsoft that recapitulated the mainframe history in operating
systems, and Intel came along with microprocessors that recapitulated the
mainframe history in processors. Now _WinTel_ put on "every desktop" a
computer for word whacking, Microsoft Word, and business arithmetic, Excel.
Gates on the way to being the richest person in the world. Not too doing too
badly, Paul Allen, Charlie Simoni, Nathan Myhrvold, etc.

(8) Ah, the US DoD again: It wanted battlefield communications, where even if
shoot holes in some of the equipment the rest still works and provides
communications. So, we got TCP/IP, e.g., in BSD, that is, we got internets.
Soon labs were connected, and we got the Internet. Soon NSF funded it and IBM
ran it. With HTTP and HTML for a particle physics newsletter by Tim Berners-
Lee at CERN, we got the Web. Companies put their _company brochures_ on the
Internet.

(9) For the Internet, we needed more in communications capacity. Enter Bell
labs again: They'd seen that one coming, too, and had been working on Ga-Al-As
(as in the periodic table from a chemistry book) solid state _heterojunction_
lasers and had the solution. Bingo: Send at 40+ billion bits per second (Gbps)
on one wavelength, some dozens of wavelength on one fiber, some dozens of
fibers in one cable, maybe several cables along a pipeline, electric power
line, railroad track, highway, river, ocean shoreline, across an ocean or few,
etc. Now, watch movies!

(10) Presto, IBM and others learned more about putting magnetic dots on
surfaces, and now we have hard disk drives in the 3 1/2" _form factor_ size
with a few trillion bytes each. And HP is on the way with a trillion bytes,
solid state, on a postage stamp.

So, now we can build server farms at Google, Facebook, Twitter, Microsoft,
Apple, Amazon, etc., and we can have start-ups like SnapChat, PInterest, Box,
etc.

~~~
graycat
Future

So, what lessons for the future might a young person draw from this history?

(1) Science. Off and on, some amazing science, especially physics, played a
huge role. Maybe that will continue.

(2) Information. The desire for _information_ , create it, transmit it, store
it, use it, etc., seems nearly unlimited.

(3) Logic. Want something done? Well, describe the work in clear steps. For a
lot of work done manually in offices over the past 100 years, such a
description is now usually fairly routine. Then with such a description,
fairly routinely can write software to do the work. So, can automate a huge
range of old, manual work of office workers. That's a lot of what for some
decades made IBM successful.

(4) Social. People are highly _social_ animals. Or to paraphrase E. Fromm,
_The Art of Loving_ , "For humans, the fundamental problem in life is doing
something effective about feeling alone." In more detail, since humans are
also thinking animals, we see that alone we are at risk, that is, vulnerable
to, say, the hostile forces of nature (earthquakes, blizzards, tornadoes,
floods, wild fires, disease) and society (war, crime, economic depression).
Knowing that we are vulnerable, we are worried (have _anxiety_ ) and seek
security. We feel more vulnerable when alone so want to do something about
being alone. From Fromm again, the first recommended solution is a good
romantic relationship. Next is a good version of religion -- get all wrapped
up. Next is membership in a good group -- get acceptance and approval, a
feeling of belonging. Next, not recommended, is what some college students try
-- get drunk on alcohol, high on drugs, and go to an orgy. So forget about the
worries until recover (but have more worries).

So, to do something about the worries, we want security, financial and
emotional, don't want to be lonely, do want to be loved, want a romantic
relationship, want to belong, etc.

More generally we will want to form good families and be in good communities.

We will be using computing and the Internet for all they are worth for such
things.

(5) Economic Security. Likely second only to love, and maybe more important
than love, and maybe essentially a prerequisite to love, people want _economic
security_ , and for that there is a famous one word answer "more".

The drive to use logic, software, computing, the Internet, etc. for "more"
will remain powerful for decades, maybe centuries.

(6) Information. Now one of the keys to more in economic security, "more", is
information, and the drive for that will also continue for decades, etc.

For _information_ , we take in available data, process it, and report the
resulting _information_. This processing is necessarily mathematically
something, understood or not, powerful or not. Then clearly one approach to
more powerful processing and, thus, more powerful and valuable information, is
to use mathematics to determine how to do the processing.

E.g., how to look for oil? Okay, often oil collects in _pockets_ in the
subsurface layers. So, let's map the layers and look for pockets. How to do
that? On the surface, have something go "boom". Sound waves go into the
ground, and they get reflected off the layers so that there is a
_convolution_. So, to find the layers, take the resulting signal and do a
_deconvolution_ \-- Enders A. Robinson, 'Multichannel Time Series Analysis
with Digital Computer Programs'. The fast way to do deconvolution? Sure, the
fast Fourier transform.

Once get the oil out, over here have all that oil, from Texas, the Mideast,
Venezuela, Canada, etc. -- typically it's all different. Over there know what
can sell -- methane, propane, gasoline, Diesel, heating oil, motor oil, etc.

So, how to take the available input and sell the output and make the most
money? That's a math problem, in particular in optimization. Long the first-
cut approach was via linear optimization ( _programming_ in the sense of
_operational planning_ ). At one time, IBM had fun selling mainframes to
Houston for just this work. But linear programming is not quite the right
stuff. So, want some non-linear optimization. Well, for more details, see the
work of Christodoulos A. Floudas in chemical engineering at Princeton. Houston
does know about Professor Floudas.

There's much more to do. Right: Likely not a single VC in the country says
that they want to see some especially valuable software based on some
especially powerful mathematics. Hardly a one. And they are not comfortable
backing something they understand so poorly. So, right, a lot of confused and
unhappy VCs (they so richly deserve it!) but: Presto, bingo, opportunity.
Besides, the main raw material into original mathematics is paper, pencils,
and coffee, and how expensive are those?

Almost inevitably, there will be only a few people going that way with the
rest heaping ridicule, etc. Not nearly new: Think of the Mother Goose story
_The Little Red Hen_.

Secret: It turns out, no matter how much advanced and/or original mathematics
you use, nearly always a lot of the actual computations will boil down to
linear algebra and there, numerical linear algebra. So, take linear algebra,
elementary, intermediate, advanced, applied, numerical, and related subjects
such as linear programming, non-linear programming, multi-variate statistics,
ordinary and partial differential equations and their numerical solutions. For
more, study the leading generalizations of linear algebra, _functional
analysis_ , e.g., Hilbert and Banach spaces.

(7) Niches. One of the standard ways to make money is to have close to a
monopoly, and one of the standard ways to do that is to have a _niche_ of some
kind and where the monopoly is protected by, say, a geographical barrier to
entry, an especially good product or service, some crucial, core, defensible
technology or know-how, a good customer list, some network effect, etc.

So, go for it!

------
tomlock
I think startups can be romanticized so I'm sharing my startup story and some
of the things I did do and some of the things I should have done.

When I was 23 I joined a startup as employee number 4. We did Salesforce
implementations for small businesses using freelancers. At the time it was the
CEO, Director of Sales, and another Project manager. I was originally hired as
an admin assistant but after I taught the other project manager what a Gantt
chart was, the company decided I was ready for the big time.

The company eventually fell apart due to internal conflict. The CEO had
already started another successful web design company during his teens. He was
extremely driven, charismatic, and caring, (and better than me in almost all
the ways that count) but he did seem to have lost _something_ due to working
so hard for so long. The director of Sales was an absolute beast at what he
did well, which was sales. Our pipeline was always bursting, but the customers
expectations were often for things that were technically impossible
(integrating Salesforce with Outlook at the time was terrible). He was
clinging on to a fading dream of entrepreneurship. He didn't talk about his
past, but he had worked in enterprise, and started his own business, but he
hadn't reached the parabolic heights that he'd hoped for. The PM (project
manager) was a friend of mine, and a friend of the CEO. He was extremely
smart, but sometimes an idealist, and at the time not a very experienced
negotiator.

I started at the company because I had been working at a big business that
didn't offer me full-time work. Straight out of university I needed a job, so
I'd have quick cash. I had an Arts degree and just wanted anything to start,
so I took what I could get. They had me on as a temp, and I was fearful. I
wanted security and one of the ways I saw to get it was to threaten to leave,
so I put out my feelers, and the PM answered. My boss at the time couldn't put
me on, and even if he'd said he would, I probably would have left for the
startup. I figured, it could be the next Facebook.

At the interview, the Sales guy grilled me, but one of my strong points is
interviews, so I nailed it. I even asked for more money, and I got it! At the
time, I didn't ask a question which I should have:

1) Ask the founders why they need another employee

Hell, this probably wouldn't have changed my answer to their offer, but at the
time they were looking for relief. The PM was overworked, and they needed him
supported. In retrospect, they didn't know what they wanted. I kind of wanted
an assistant role, and at the time didn't know I wasn't the best at project
management, but that's what I ended up doing. I think in most startups the
original employees don't have much choice - they do what needs doing. Find out
what that is so you know what to expect.

I also did one thing well:

2) Have a realistic discussion about money

I asked for more money than they had offered in my interview. You should
already know what the startup does, and you should have a fair idea of how
cash poor or rich they are. This became even more important for me later.
However, don't assume because you're working for a startup that you need to
get paid nothing. Startups fail, and if that happens all you're going to have
in your pocket is the cash. Trading experience for food is a little less
convenient.

I started working. It was hard and I was in the deep end. I bought some
experience to the table that they didn't have at that point, and I got my
first sales experience, which I hated. I hated project management less, but
what I really loved doing was development. For the work we were doing,
development was quite light. The hours were long, and we hired devs,
predominantly in India, to do configuration. The projects stretched out, often
because I hadn't communicated with the customers well enough, and because the
customer's expectations were not aligned with ours/reality.

3) Understand the customer

We were working for small businesses. This meant that a small amount of money
meant a lot to the customer. The level of technical understanding of the
customers was also low, which could be either extremely positive (importing
csvs sounds complex and don't worry if it takes a month) or extremely negative
(why can't you spell check e-mail addresses automatically). Additionally, in
the end we were working for Salesforce. They didn't care how long it took us,
they wanted the customer satisfied so they could get that sweet monthly SaaS
payment on into the future. All this lead to extremely drawn-out projects,
because that's what our customers demanded. That meant long hours, and lots of
anger.

4) Understand the competition

I think this was the most crucial thing I didn't do. In the small business
space for Salesforce, companies rise and fall all the time. I think this is
due to the volatility of the customer type. It seems like the success strategy
for companies in the space is to move to the medium-customer segment,
effectively leaving the small businesses behind. I honestly have no idea if
that was our strategy, but I probably wouldn't have joined the company if I'd
realized how fraught with risk our market was. I even had another friend who
had worked in the space, and shut down their company. In the end our
competitive advantage seemed to only be how high our customer's expectations
were in the sales pipeline.

5) Evaluate perks versus effort

If something goes wrong and you have to work until 3AM (and it will and you
will), a bottle of expensive vodka is still less expensive than your hourly
wage would have been. Is an office pet and an open bar worth the time you're
spending at the office? Ask yourself this question often, because you'll be
spending a lot of time at work.

At this point the pipeline was getting totally stuffed with old projects that
had been drawn out for months because we couldn't deliver on our promises. Our
desire and need for new deposits still grew, however, and so the pressure
continued to build. The sales director was restless with this. I had been so
excited at the beginning of the company to help design our processes, but we
continually revisited and redesigned them, so much so that I think we went
through 4 different visual designs for customer quotes in the 6 months I was
there. I didn't think this was normal, and I felt like we needed more
stability.

6) Remember that X% of $0 is $0

As the company became more fraught with drama, all the non-founders (there
were now 6 in the company) were offered equity in the company. The first issue
with this was that the company was surrounded by a bunch of other companies
with different names, so we had no idea where the money was going. The second
issue was this was a verbal agreement from the sales director. At this point I
decided to leave the company.

I don't think there were any other lessons to learn, and I think I came out of
the experience as a better person. If I'd turned down the offer I'd probably
be reading Hacker News all starry eyed thinking startups were the promised
land. They aren't, but they are fun, and I'd recommend everyone try them. But,
protect yourself. Ensure you know what you are getting, and be realistic about
the outcome at all times. If you are living hand-to-mouth as a college grad,
don't rely on a successful exit as your savings plan.

In the end, I went crawling back to my old boss, but he hired me full time
without an interview, and offered me more money! Taking into account my unpaid
overtime, I got a 100% pay rise :). I was hurt by the experience, and the
startup had threatened to call the cops if I didn't return my laptop and phone
on the day I left, but looking back on it now, what a laugh! I felt taken
advantage of, but I got valuable sales experience, learnt more about working
with external devs (although I'm still not great at it), a chance to design
processes for a company from the ground up, a better nose for bullshit and a
few expensive bottles of vodka! It was an exhausting six months.

After I left, the founding CEO got f@#ked out of the company by the sales
director, and then the sales director got f@#cked out of the company by the
new CEO. The equity never materialized. The best story is of the other PM, who
managed to score two medium-size enterprise clients for himself, and now earns
six figures and works only a few days a week!

~~~
jgroszko
This post looks like it could be an awesome blog post and thread on it's own!

~~~
tomlock
Thanks :)

------
pdq
This site is so busy it almost reminds me of a tabloid:

\- three signup buttons (top-right and top-left, and the bottom of the
article)

\- permanent left overlay

\- permanent double overlay on the top, including 9 'share' links

\- red banner at the top for the latest campaign

\- popular linkbait articles with pictures along the left side

\- self-advertisement in the middle of the article

\- giant modal signup popup after about 10 seconds of activity -- "Are you
Prepared for Your Next Interview?"

~~~
pjmo
I completely agree! One of the worst reading experiences I've ever
encountered.

