What to know before working at a start-up
thedailymuse.com
thedailymuse.com
The "risk" that this article talks about was actually a bonus in my mind. It meant that, more often than not, the whole company would suddenly evaporate out from under you at some point and you'd find yourself out on the job market again. Since this is an industry where Changing Jobs == Big Fat Raise, having a chance to do so with a perfectly valid excuse ("we rode our $4M straight into the ground, so here I am") was a definite upside.
Not to mention that finding yourself on the street after 6 months coding non-stop while living on somebody's couch will invariably leave a fella with a nice stack of cash. The sort of cash that goes a long way if one were to squeeze in a quick nine month trip to SE Asia before hopping back aboard the next startup for another fun, fast trip into the side of the mountain.
If you're young, unburdened, and looking to get exposed to a lot of cool tech in a short time (and still get paid for it), joining somebody else's startup is totally the way to go.
These are the most basic of life skills, and if you find you're not rapidly saving lots of money while making any form of salary greater than $50k/year, that's a big red flag.
Seeing as how a dev worth his salt will be making at least double that, I don't have an answer for you as to why you ended up without any savings after working at a software development job.
Care to elaborate?
[1] - yup, I've seen "well funded" startups searching for top talent willing to work for €36k/year
When you include employer-side taxes (social security and medicare) and the several tiers of tax (federal, state, local, property tax, sales taxes, various weird shit like hotel taxes) the tax rate in the US for middle-class is not very different from that in Europe. Where the tax schedules differ is that, in the US, genuinely rich people can avoid paying. Working, middle, and upper-middle class people pay just as much in tax in the US as they do in the EU.
The US does have about 5 locations where developers can make more than anywhere else in the world. The Bay Area and New York are among them, but they're also ungodly expensive (house prices over $1 million). In the rest of the US, prospects aren't any different from the rest of the world. The $80-100k entry-level salaries are not happening in "middle America". Those are usually being offered in the Bay Area or New York.
For the record, what actually makes the middle class poor in the US is not taxation, but the Satanic Trinity: housing, healthcare, and education costs. Even "good" health insurance is garbage with more holes than rotting cheese, and college tuition can easily top $40,000 per year.
It probably is slightly better to be a really good (top 5%) programmer in the US right now, but I don't think that's for purely economic reasons. I think the advantage of the US is that it's easier to get venture capital, so there are more experimental ideas. It's probably easier, in short, to get a good job here... but the difference in compensation is probably not enough to justify moving over here unless it's a much better job.
Many of these taxes are regressive and decrease as a percentage as your income goes up. For example, I believe that Social Security tax is only assessed up to about $110k.
Then again, I've never had a salary salary either. The only time I've worked anywhere completely full time, was a two month internship that paid mostly with the fact that "Holy cow I'm spending two months in the US for free, this is awesome!"
These days I freelance ten hours a week while finishing my degree. The pay is good, but there just aren't enough hours to build any sort of proper savings.
Best of luck building up the hours!
This seems to be at odds with the constant complaint of a talent shortage, especially when startups have to compete with the offers made by AmaGooBookSoft. Which is to be believed?
If the company values you and you hold the keys to some aspect of the company's operation, the team is far too small for them to practice poor retention.
On the other hand, with a finite runway and the need to move quickly, if you can't keep up, there's little reason why the company needs to have you on board.
So I suppose it cuts both ways... but if you're a competent employee, I see startup hiring as advantageous for the employee at this point in time.
Startups also do experience a higher degree (usually mutually agreed upon or voluntary) personnel turnover, some time well into the later stages. If you don't expect it, it can be unnerving: imagine if the person who recruited you and who you were eager to work with quits (this really shook me up first time it happened!). Nonetheless it is actually healthy: if someone believes that their personal interests and the startup's interests no longer align (either they don't think it will be as successful as they hope, or it has changed direction in a way that their technical skills are now underutilized), it is better for them to depart.
I think the article is mostly right. One place where I will disagree is in regards to "risk": traditional corporate careers (think joining GE or IBM and staying there for 10-15 years, entering management as the only possible promotion) actually offer less job security than working for younger technology companies (whether startups or Google/Facebook).
What one should consider instead are opportunity costs: financial (a startup might match a bigger company in base pay, but they will usually not offer RSUs that you can start selling in a year), but most importantly the non-financial ones (if the startup fails, will I still learn any unique, useful, and broadly applicable skills?)
People should be prepared to be flexible of course, but I'd hate to see long hours perpetuated as part of this cargo cult start-up success myth and expected by default by founders.
Not to say that I'd balk at working 80 hour weeks for your Startup if that's what you want. So long as you're paying me by the hour, you can have as many of them as you'd like. You'll burn through your capital twice as fast, with considerably less than twice as much product to show for it, but hey, it's your money. I just work here.
For an employee, surely this would come through the interview process?
The most important thing, when joining a company, is to enter one with a real engineering culture. Are the most qualified people making important decisions? Is it going to stay that way? Will you be able to make decisions that affect you? (Expecting to make decisions that affect others, in your first 12 months, is asking a big much.) Too many of these hot startups (and almost all of the VC darlings) have shitty MBA culture. Sure, they have free pizza (at 8:00 pm) and engineers can wear jeans, but the major decisions are still made by the wrong sorts of people.
Also, I think the social media bubble is going to embarrass itself just like the last one did, and I think it's going to splotch a lot of resumes. I think it's wiser to make for Real Technology now rather than in 2015 when a large number of people are trying to do the same because Google is no longer acq-hiring IUsedThisToilet apps for $487 million.
Finally, becoming a subordinate employee at a startup is usually a shitty deal. The stock option on 0.01073% of the company isn't real ownership. It's a lottery ticket. And if you don't know what preferences the investors have, you're in absolutely no position to evaluate the equity even if things do go well. (By the way, my friend had an offer at a VC darling, for 60% of the salary he was making but about 0.25% of the company. When he asked if there were preferences against that equity, the offer was rescinded. I don't know if this is normal, but it is telling.)
There are 4 reasons to join a startup. 1. For a promotion. This can be dicey because the startup might hire people above you as it grows, defeating the purpose of that move. If you join a startup as the first programmer and end up answering to an MBA-toting VP before your equity is fully vested, you've been fucked. Startups have good reasons not to make their first programmers CTOs, but if you're the first programmer, you should absolutely insist on investor contact and lock in a VP-level title. 2. You know and trust the people running the operation. I would say that this is the big one. Startups can be amazing opportunities if you trust the people running the show, and if they trust you to make important decisions. 3. Literally no one else is doing that kind of work. Since blue-sky R&D (once funded by large companies and governments) has disappeared or is only available to people with PhDs from top departments, this is not an uncommon case. 4. You're a founder.
This is disturbing, but it does seem like he dodged a bullet there.
I'll corroborate that I had an offer rescinded when I tried to negotiate salary and benefits... but this was not a startup. Do companies that behave like this think that everyone is desperate to work for them?
Another thing to know - it's fairly inexpensive if you're young and in decent health.
For the vast majority of you, worrying about health insurance is more silly than worrying about the cost of a car.
Individual insurance also means that the first major health issue you have can drastically increase your future premiums.
a friend of mine was 22, she tried to buy individual health insurance with a blank medical history and discovered that no insurer offered polices for her gender and age group in her geographic region (VA)
no one would sell her individual insurance.
as a 26 year old male with a similarly blank medical history in a different geographic region (MD), I recently had exactly the same thing happen. no one would quote me a policy because no one wanted to sell me a policy.
I'm interested in your friend's story. At 23, male, in VA I had absolutely no trouble buying an individual policy. I have some health issues, but nothing major, but I was able to secure a decent policy for just over 100$/month. MD should be even easier (if more expensive), considering there is no medical underwriting in MD.
You're wrong, for one. Self-insuring in the US is an expensive proposition for anyone regardless of age or medical history. Also this isn't the days of immigrants coming over by the boatload to spend 40 years making widgets in a factory before dying an early death anymore. The US healthcare system's poor (and deserved) reputation has a non-trivial effect on the country's competitiveness. It is dragging the economy down. And this is a part of it. Ignore that at your peril (please).
Anyone? I've done it, while over the age of 50 and male in the SF Bay Area. It wasn't that expensive.
And yes, I went with a full-coverage policy with no deductible and a minimal co-pay. I could have saved a lot of money by going with an HSA.
I've posted the numbers before.
Sure, you've read some horror stories. Google "Gell-Mann effect".
Worrying about about health insurance is silly? What a moronic attitude. Health care is a reverse lottery and there's practically no top end if you end up with "winning" genetics/car crash/whatever. "Not worrying" about healthcare insurance is irresponsible and wreckless. If you end up needing expensive emergency care the rest of us have to foot that bill because you were so arrogant as to think it couldn't happen to you.
Unbelievable.
I know because I've actually done it. Have you?
I've previously quoted the price I paid out of pocket for a very comprehensive policy and I'm expensive because of age and gender. We've now also heard 2nd hand from a broker.
The same policy costs young people, the ones that we're talking about, a lot less.
That's why I mentioned car costs.
But, you'd have to actually read instead of regurgitating what you've "heard".