Why Non-engineers Think Engineers Are Better Off Joining Startups
dbasch.posterous.com
dbasch.posterous.com
Sometimes even just reading on HN about people who are succeeding (or persisting) with their side projects or about successful startup founders or failed startup founders is enough to release the tension (momentarily) - to jump from a certain 9 to 5 reality to very real world of a real start-up.
The ability to leave your job at 5pm is very much a benefit, one that 99% of startups will never offer.
That being said, you will never become wealthy[1] without ownership of something that produces income. That will almost never happen at a BigCo. My mom had multiple patents - for which she got a nice lucite paperweight [2]
[1] My definition of wealthy == How long you can maintain your current, preferred lifestyle without working. This means building a semi-passive/semi-active income from your own products. Binging on consulting income isn't the same. Yes, you can adjust your preferred lifestyle to meet median cash flows.
[2] Example from the "Corporate & IP Recognition Company" (LOL)
At my company we get paid cash for patent filings and paid another cash sum if the patent is accepted. A little less than 5k total, but it's not hard to do 1 a year. It's not getting rich, but there is no risk either. I get paid, period. I get over 5k a year matching in my 401k, and I get a bonus every year over 10k. This is all on top of a large salary by most peoples standards.
If I live like I only make 80k (not hard) I will easily have a house paid off and a fair amount of money in the back after 20 years. And it's low stress and fun work.
What I'd really like to know is what percentage of engineers that try to succeed at a startup actually end up wealthy. Does anyone have stats on this? Most of the people I've worked with that ended up wealthy weren't engineers. they got good at SEO at the right time and sold some wordpress site or something like that. I used to work with a few people that were at youbet.com and I wouldn't say they got rich. The average engineer seemed to have gotten a payout in the 6 figures range. This is me guessing based on the info they told me in conversations. So they basically get to buy a house in cash in the L.A. area.
I feel like my chances of paying off a house in 20ish years is just as good at a big company as it would be trying my hand at a few start ups. Maybe I'm wrong, and clearly I'm not a big risk taker.
The work I've done has only ever been high stress, and very rarely fun. Is it purely a matter of experience to get to the point where you earn greater than 80k and only do fun, low stress work? I haven't seen anything like that around here. Oh, and this city is expensive too. For a base salary of 62k/year, the average home costs 9.5 years of pre-tax income.
I should clarify "low stress" and "fun". It's a big company so I have to do a lot of silly things. Quarterly reviews which no one reads, yearly training courses that are a waste of time, the usual big company politics, etc. These are not fun, but I spend most of my day hacking on challenging problems and learning from people that are smarter than me which is my idea of fun. Yes product people unrealistically want everything to have been done yesterday, but I have no problem letting that go in one ear and out the other except when they are right ;)
By low stress I mean that I don't have to work much overtime and no one calls me in the middle of the night or on the weekends to fix something. When I go home I can leave work at work unless I want to keep thinking about it. I enlisted in the army when I was 17 and spent a year deployed so my idea of low stress might be different than others.
And one can also argue that 99% of startups aren't worth working for. It's incredible how many startups are out there that are doing things wrong. The most important part of working for a startup is choosing the right one (ie, one that won't confuse productivity and butt in seat time).
Ya I couldn't agree more... It's one topic that I would like to see covered more often is how to identify the right startup from a prospective employee perspective.
"The secret to your vision lies in your own heart. Who looks outside dreams; who looks inside awakens."
That's hardly limited to start-ups. There are whole industries built on absurd working hours, and not out of necessity.
Any company -- startup or otherwise -- which treated its employees' personal lives as something other than an expendable resources would treat "a drop-everything-it-needs-fixing-now bug got into production" as an anomalous emergency. There would be investigations after the fact and steps taken to prevent it from ever happening again.
The thing about anomalous emergencies? They don't happen every single freaking day if you are competent.
A company I previously worked for, which was by no means a paragon of work-life balance, had a fairly simple guideline with regards to bugs that were that severe: if there is an engineer four levels down the org chart in the office at 2 AM because of a bug, there had better be three levels of org chart also in the office at 2 AM preparing for an investigation into how they screwed up to let that bug get into a customer's system.
The difference between a reasonable company that can keep good people and an unreasonable company that cycles through burnt-out husks is seen the day after you had to pull an all nighter. At the company you want to work for, you get a day of flex time, and even if you don't take it, you get thanked (and not berated) when you stumble in around 3pm.
My general rule is "If you can't get it done before you sleep, you might as well go to sleep on whatever schedule gives you the most total productivity" This means no sleep deprivation during crunch time, unless you can reasonably stay up long enough to finish. Sleep-deprivation for projects that last more than a day is completely stupid because you trade away all your good hours tomorrow for a few more tired hours tonight.
It's harder than that, too, because sleep isn't the only need. Sure you can go longer without seeing your friends/family or doing whatever it is you do to relax, probably, than you can go without sleep, but most people's performance starts to degrade sharply after a week or so of not having personal time, even if they do get enough sleep. So again, if the crunch time is going to last more than a week, having people do overtime is probably going to net you less total productivity than just having them work optimal hours.
The thing is, humans have limits. there's only so many hours in a row someone can usefully work. There is no point in paying someone to sit in the seat if they are burnt out. You might as well pay them to be home doing something else, becoming not-burnt-out so they can then get something done for you the next day.
Let's be generous and say you get there after a series A and make 100k/year startup and get ~.5% ownership subject to dilution. Compared to that Google job making 175k a year plus bonus and stock options. Let's be conservative and say total compensation of 200k. In 5 years you are forgoing $500,000 + any return on asset you made. That startup has to sell for $10 million without taking any more investment for it to be worth it.
Obviously this is possible, but it's not clear which one is better off most of the time. Like the article says- do a startup if you want to do one. Not if you want to get rich. If you want to get rich go be a quant at a hedge fund.
(My sense is that engineers that start companies better understand the value of good engineers than VCs do).
Only - "Alone in kind or class"
Sure sounds like he said it was impossible to me.
So in one sense he did join a startup. In another, a career like his is as rare as a startup founder turning into Bill Gates. Perhaps rarer.
http://en.wikipedia.org/wiki/Steve_Ballmer
http://en.wikipedia.org/wiki/Meg_Whitman
They all followed a typical path to wealth older than dotcom mania. MBA, senior management position, CEO.
I've heard your definition of wealth before, and it's better than most, but you need to factor in risk. For instance, I could stop work tomorrow... I could continue to not work until my employee got burnt out or until my accountant quit. I wouldn't call this wealthy, personally, just 'cause, well, I think that without my help and supervision the risk of him burning out goes up a whole lot. Well, that and if we don't keep growing, the inexorable downward march of prices would eventually catch up to us.
I mean, I could be wrong. I might be holding the guy back. but the point is that I can maintain my current lifestyle without work until a certain event occurs.
This is true of nearly all investments. Now, my wealth is certainly more fragile than a stack of T-bills that paid the same small stipend, (and with today's interest rates, you'd need a pretty big stack, even for the small amount of money I live on.) but even in that case, you'd be at the mercy of inflation; you'd have /some/ risk. Unless you used TIPS, in which case, the stack would need to be again larger, and then you are dependent on the government using a cost of living measure that is relevant to your lifestyle.
That said, as an engineer being a startup "employee" is a sucker's game. You'll never get enough equity or intangibles to compensate for the risk/effort/opportunity cost.
As someone that just left a startup I couldn't agree more...
It can be very much like a gambler's dilemma. The more time/money you invest the harder it becomes to walk away. Eventually they realize they've stayed not because they agree with the vision, but because they don't want to cut their losses.
One such startup I know of is going 10 years strong. I think the VCs are in the same situation as the former coworker I mentioned; throwing good money after bad.
I'm leaving a startup next month. I'm in a senior position so it was a very difficult decision to make in addition to what you said about the time invested / gambler's dilemma.
But in the end, like you said, I just don't agree with the direction the company is going - whilst at the same time I have no doubt that the company will continue to successfully raise VC, for the exact reasons you describe.
In a nutshell, get out of my mind, sir!
And it'll end up being 'production' code because "we already have it and they already paid for it!". And the crappier it is, the longer it will remain in production and the harder everyone will fight against rebuilding it to be not crappy.
The code there sucked - and most coders did, too.
I don't mean to give you the impression that your new job is going to suck. If you chose the right startup, you're going to have an awesome time. But I also think it's important to be realistic.
I think a big part of the reason a management tier is needed at all in a lot of smaller companies is the general unwillingness of engineers to sacrifice code purity for expediency.
Regardless, that's beside my point. It sounded like the person I responded to wanted to work on better code, so I was just pointing out that startups aren't necessarily any better in that respect. I'll leave it to him to determine how good or bad that is as I'd really rather not get involved in this old debate again.
I won't say the code was always pretty at the startup, but due to the higher level of skill among the developers, I think the code there was superior to what was produced at the big company.
Although the startup went under after I was there 2 years, I learned 10 times the stuff in 2 years of the startup than I did the previous 5 years at the big company. The skills I learned at the startup allowed me to get into a much better job at another big company that I stayed at for 11 years.
The point is this: build your software right. At the very least, only take reasonable shortcuts, and make sure you come back around to fix your crappy design at some point. The longer it festers, the worse it will get.
Large companies change all the time. Departments are merged, strategies are changed and projects are stopped constantly. I think this point isn't valid.
It was fine, actually, since my manager knew the score. The HR software we are forced to use only lets you set a person's goals once a year, and then you (the manager) confirm if they reached them or not, then it calculates their bonus. So that's fucking stupid, but he just ticked them anyway, who's to know?
I agree the point isn't valid, though, but I think yours isn't, either.
The author's argument is not that chaos doesn't exist in large companies, just that it is far more frequent at a startup.
One possible explanation: 1) Statistically, most engineers work for big companies. 2) By human nature, people tend to stick to their current jobs, most likely a big company job.
Here is a related thread at Quora: http://www.quora.com/If-I-want-to-be-an-entrepreneur-later-s...
Any logical being would play with the idea of financial freedom. And it is unlikely in a "regular job."
Not like it's likely in a startup.
It also seems to me that this post is criticizing two sentences out of the entire article (http://techcrunch.com/2011/02/13/engineers-startups/) without properly understanding them with rest of the context. All this article is saying is that due to the market warming up, now is a good time for engineers to work at a start up.
That said, I agree with the point that dbasch is trying to make even though I don't think that they needed to be presented as a 'rebuttal'.
Both of these are true, so the real fact is that now is a good time to be an engineeer.
But, as lylanm also points out below, perhaps the larger point is that there's not much merit in comparing the prospect of work at an abstract startup versus the prospect of work at an abstract large corporation --- especially if you don't have an offer from either.
Whether you're looking for a first job or just a new job, it's certainly worth exploring whether a particular startup might be a better fun+financial+whatever fit for you than another opportunity that's been extended to you at a particular established company.
It was a reasonable debunking of a deplorable TC article, but I was really interested in the difference in mindset.