The following article originally appeared on the Atrium blog.
I’ve spent my entire professional career in the startup space. After a couple successes (and more than a couple failures), I’ve determined that I’m passionate about startups and it’s how I want to spend my time. It might therefore seem obvious that I’d recommend working at (or starting) startups to everyone. That’s definitely not the case!
There are many reasons to join a startup irrespective of your long-term goals or outlook. But even as a serial entrepreneur and startup lifer, I can see a few reasons for some people to steer clear. If you’re seriously considering both options — a traditional company and a startup — here are some points to consider.
This post is extracted from a talk I gave at Y Combinator’s Work at a StartupExpo. You can watch the video here:
Why not to join a startup
My goal here is just to give you the most unfiltered, raw information that I have in order to help you make an informed decision.
The management at startups generally sucks. I wish I was joking, but sadly it is very true.
I used to joke that there were two types of startups: rocket ships with bad management, and other companies with bad management. And as kind of a corollary to that, it is likely that if you join a startup, especially in early stage one, you won’t necessarily get enough mentorship or direction on what you’re doing unless you really actively force people to give it to you.
There’s a positive side to lack of direction, which I’ll get to in the next part, but having to force your leaders and managers to give you guidance can be a very strong negative to people who are not self-directed.
I’m running a startup now. I think our managers do a great job (and hope they’d say the same about me). But when you compare it to the defined structure of an established company, it just doesn’t compare. Big companies have employee onboarding, management training, goal setting they’ve been doing for years — all of the things that give people guidance and mentorship on what they need to do to be successful.
You are not likely to actually get rich joining a startup. It’s statistically improbable. It’s the most glamorized — and worst — reason to put up with the chaos.
People hear the story of the masseuse at Google or the wall painter at Facebook receiving substantial equity checks and think that it will happen to them.
If you think you’re going to join a startup and then be set for life, you are setting yourself up to be disappointed. There is certainly higher upside than any normal 9-5 job. But you have to assess a) your appetite for risk, and b) the opportunity cost of giving up stability and a healthier work/life balance.
Silicon Valley has matured in the last 10 years since I got here. Originally, people came here because they just wanted to work on interesting frontier projects, and that was a lot fewer people.
Today, I think that there are a lot of people who come to Silicon Valley because they want a good career trajectory and high pay, and there are a lot of big tech companies that can offer that stability.
If you want those things, you should not join a startup. And I’ve noticed more and more people, even people I’ve recruited more recently, coming in and asking, “What’s the career pathing here? What’s the five-year plan?”
And the honest answer is, “We don’t have five years of money,” so anything I told you about a five-year plan would be complete bullshit right now. We certainly plan to be here, figure it out, and build a company that lasts decades (or more!). But if you want a guarantee of stability today, I think you should go join Google.
Why join a startup
Now on to what you really came for: the reasons you should join a startup. For each reason I give below, I’ll share a story from my experience as an entrepreneur.
1. Access to jobs you are not qualified for
At a startup, you will get access to jobs that you are completely unqualified for and you might not be able to do well (yet). I have a good example from my time at Justin.tv: Eight years ago, I was on stage at the same YC Work at a Startup Expo talking about our startup and we actually ended up recruiting someone from that event.
He was a programmer from France named Guillaume with only a couple years of practical experience. Within a year of joining the team, he was running our Rails application backend. Justin.tv was a Top 150 global site at the time, and top 20 Rails (it was 2010, so the bar was a lot lower).
And that was a job he was completely unqualified for, and he would never have gotten the opportunity to it if he didn’t join a startup where we didn’t really have anyone else to do it. He went on to be co-founder of another Justin.tv spinoff, Socialcam.
They went through YC and got an even greater scale challenge when they scaled like from zero to 128 million users in about two months. Just the rate of learning for him was pretty incredible. Now he’s a co-founder at a company called Triplebyte that helps technology companies recruit great engineers.
2. Gateway to starting your own company
Joining a startup is a really good gateway to starting your own company.
Another example – in 2012, I started a company called Exec and I recruited Finbarr, a very talented engineer. He was an engineer at Groupon at the time. He wanted to break into the startup space and knew that he wanted to try building his own company at some point.
I think it is really important is to put yourself in positions where you’re around people who will help you get to where you want to be. One of my co-founders of Twitch, Emmett Shear, always told me that “you are the average of your five closest friends”; if you want to be a founder, make friends with people who are in startups. I completely agree.
After we sold Exec, Finbarr launched his own startup with another employee he ended up meeting at the company. That one didn’t work out, but it got him into startups, and eventually he founded another startup, Shogun, that just went through YC and is growing extremely well.
3. Optimize for rate of learning
I think this is actually the most important reason why you should join a startup. I have two examples of people who did that while working with me — the two co-founders of Cruise. I think that they are great examples because one is maximizing learning on the way up and the other on the way down.
One of the cofounders of Cruise, Kyle Vogt, was a student recruited from MIT to Justin.tv. He was a hardware guy, and we thought we were building a hardware solution. Kyle ended up becoming a co-founder and VP of Engineering. He’s an amazing hacker and tinkerer who always figures out a way to build whatever you need. But at the time he wasn’t experienced in scaling systems or building scalable technology architectures.
Kyle ended up building this scalable, dynamic, live video system that he engineered and architected from scratch. At first, it would go down all the time and we were calling him every 36-48 hours to bring it back to life. One time he finally took a vacation and the only way to get in touch with him was to order a pizza to his hotel and give the pizza guy a message to pass along!
There weren’t many technical precedents and he had to learn fast. Kyle eventually got our live video system to the point that, by the time Twitch sold to Amazon in 2014, was the fourth largest bandwidth consumer in North America. Fifteen points of presence around the world. Ninety petabytes of data transfer every month. So his rate of learning was incredible as a software architect. And obviously, went on and took a lot of that learning to build a self-driving vehicle at Cruise.
The other co-founder of Cruise was my brother Daniel, who met Kyle actually as an intern at Justin.tv. He also had a crash course in startups over the next couple years. As part of his job, he recruited this then unknown band called the Jonas Brothers to broadcast on the site.
They ended up crashing Justin.tv’s infrastructure with all the traffic they brought in (and gave Kyle plenty of reasons to hate his life as a result). Daniel joined as an intern and he got to interact and make a deal with what basically become the number one teen band at the time in 2007. That’s not the kind of opportunity you get outside of a startup.
Daniel is also a perfect example of how you will also maximize your learning if the startup is failing miserably (ie, on the way down). Daniel, our friend Amir and I cofounder Exec in 2012, and by the end of 2013 we realized that the home cleaning business is just not a great business. We were trying to sell it and ended up negotiating a deal with similar company in NYC: Handy.
The deal was taking forever. There were tons of lawyers hours wasted negotiating trivial points that kept dragging and dragging and dragging. I was very burned out. I finally said, “I’m going on vacation, Daniel. You have to deal with it.”
Admittedly, it wasn’t a very responsible thing to for me to do. But Daniel ended up having to be the one who would close this deal over the next month while I was in Thailand. I was in touch by phone, but he was mostly running this deal. He later told me how it was a horrible experience – but he learned all the minutiae of negotiating a deal from a point of low leverage. And he learned it on this very small, horrible deal which we were mostly just trying to offload because we were so burned out we wanted to get out of business.
Fast forward two years and he was now a co-founder of Cruise, which ended up selling to GM for a billion dollars. The big takeaway is that Daniel applied all those horrible lessons he learned negotiating this awful, piddling deal for our company to his next company — which obviously turned out much better.
Conclusion: Join a startup if learning trumps stability
No matter what, when you join a startup, you’re going to learn something. Whether the company succeeds or fails, you’ll walk away with something valuable.
The way I think about growing and maximizing your speed of learning is a quote that YC partner Paul Buchheit often says to exiting batches: It’s not your Y intercept, but your slope that’s important. The way I’ve always thought about it is to figure out ways that I can put myself in the position to maximize my own person rate of growth and rate of learning. And I suggest that you do the same, regardless of whether that’s at a startup or not.