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Ask HN: I don't understand why you would join a startup. What am I missing?
8 points by austinee 1467 days ago | hide | past | web | 7 comments | favorite
I have the opposite opinion of pretty much everyone I know. Could it be that I’m right and everyone else is wrong? Probably not. What am I missing?

I’m 30. I’m an engineer who has solid hardware design and low-level software skills. I’ve dabbled in higher level stuff (ML, FV, distributed systems) in my spare time, but I don’t have real expertise in those areas and I’ve never touched mobile or web. I don’t manage and don’t want to.

In order of importance, my priorities are having smart and curious co-workers, working on interesting problems, and having a good work/life balance (for me, that means working roughly 40 hours a week). I’d also like to be able to retire at some point.

Problem-wise, a higher proportion of startups have interesting work, but, I only need one job, so that’s a wash.

People at most startups work very long hours. In my experience, when doing creative work (and I wouldn’t want to do any other kind), working longer hours is counterproductive. Big companies 1, startups 0.

My total compensation is currently ~$165k in an area with a low cost of living. CNN’s COL calc says that’s ~$290k in startup-land (SF). Big companies offer me what I’m making + 20% or so. Virtually every startup I’ve talked to won’t go above $120k-$140k, and a typical equity offer is .1%. 1% is unusually high.

For a lower bound, say I’m foregoing $100k/yr in compensation by going to a startup. With .1% equity, no dilution, and assuming the salary differential wouldn’t increase, breakeven is $100M/yr. More realistically, with 5x dilution, that’s $500M a year. What are the odds of getting an exist like that? Surely < 50%. Big companies 2, startups 0.

The equation drastically if I’m doing my own startup, but that’s not the question I’m asking here.

Sorry for the clipped diction; max length = 2k chars and my original was ~3k, so I cut a lot of the $ calculation, among other things.

I think you're mixing two separate questions here that have easy answers when asked in isolation (bias disclosure: I founded a startup, and have worked at several startups).

Q1) Why would anyone accept a below-market offer (financially) without some non-financial benefit to offset the difference? Answer: one shouldn't, and I doubt anyone does.

Q2) Why would some people perceive non-financial benefit in working at a startup vs a big company? This question (emphasis on "some people") almost answers itself. In fact, you already gave one reason: greater relative supply of interesting work. In any case, the financial value of personal experiences is subjective.

As a factual matter, one shouldn't assume that all startups make below-market financial offers or require longer hours than high-quality big companies.

From your description, it sounds like you'd entertain a market-level offer from a startup doing interesting work that let you stay wherever you're currently located. Such offers exist; many of the startups I've worked with had important remote team members paid (SF) market-level wages.

Id say your math is on par from a purely financial perspective.

While you touched on it, if you additionally factor in your pay from a per hour cost perspective the equation can get even more extremely lopsided. Many employees who frequent the startup world won't like to admit it or may not realize it, but the majority of employees who stick with startups incur a decent sized opportunity cost from a financial perspective and the hope is that that can be squashed at some point down the line with a home run exit (these are indeed rare). Your median (note the word median not average) big corp engineer is going to be financially better off than your median startup engineer employee.

So why do people do it? Some people find the environment to be fun and exciting - it usually involves more creativity and quick thinking than a big corp. Some people find that they can get a fancier title easier at a startup (ex. not too unusual to find a startup with a CTO who is few years out of college). Some people have to live in SF/NY and want to be apart of the scene. Some people want to have a big impact in their company and find it easier to do in a startup. Some people want to always have the chance to make millions no matter the odds.

If you're just looking at it primarily financially and you are level headed enough to not be woo-ed by Aaron Sorkin movies, the truth is that the math for the average outcome will never work out for startups (as an employee). Id say the best options are work for big-corp, start your own startup, or have a strong non-financial reason to join a startup as an employee.

You don't do startups for the money. So, your calculations are correct. Having dabbled in both startups, small business and big corporations, I can speak to my own experience.

There is a great combination of inexperience, solidarity and overly ambitious, common purpose that makes startups electric for me. Every person believes their personal contribution can make or break the business. That type of purpose and excitement is unique to the small, ambitious startup that doesn't exist anywhere else. And for me, there's nothing like it. I imagine their might be corporate cultures that try to replicate the environment, but I haven't found it yet.

The exit money is something most of us chalk up to the lies we tell ourselves. For a small number of us it happens, but for the rest of us, it doesn't.

As for interesting projects, it's a combination of interesting work and immediate impact on the business that doesn't exist with bigger companies.

I hope that helps.

Thanks for replying!

I certainly agree that you’re more likely to get the things you mention at a startup, but it’s possible to get those elsewhere (I have them now, with the exception of inexperience). Since I only need one job, I care more about the upper bound than the expected value.

Everyone has a different definition of ‘interesting’, but, IMO, Microsoft Research has more interesting work than pretty much any startup out there. Since I don’t have a PhD, there’s no way I’d get hired there; I’m just using them to illustrate a point.

As nostrademons points out, Google’s also full of interesting projects. Their process is notoriously slow, so I can’t tell if my resume was thrown into a black hole, or if it’s actually being considered, but that’s at least within the realm of possibility. Even IBM, which is known for not being a great place to work, has teams that are doing really cool stuff. Here in Austin, I’ve heard very good things about their Linux group, and, of course, IBM Research has lots of groups working on fun problems.

"That type of purpose and excitement is unique to the small, ambitious startup that doesn't exist anywhere else."

Not necessarily. That's what the atmosphere is on the GFiber team. That's what it's like, more or less, on the Doodle team. I've personally got a research project in search quality that's years away from showing anything useful, so I try to keep my own pace sustainable, but I go to work every day knowing that I'll have some tangible progress by the end of the day and that if we succeed it'll change the world on an order similar to the original invention of Google.

I'm glad to hear that, but in my professional experience, I've yet to run into that; and maybe one day I will.

Start up's offer more freedoms. I'd argue the jobs are more fulfilling and the right start-up may offer you more incentives. Additionally, you seem well educated with a lot of experience, getting 165k somewhere may not be an option some less experienced engineer may receive. Also, a younger less experienced developer may not have a family, or have more freedoms to gamble on that .1% equity (and perhaps more with stock options). But most importantly, I feel the emphasis on the beauty of start-ups are focused on the entrepreneurs and founders rather than later stage engineers where the offers may be more balanced/skewed.

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