The Career Path I Didn’t Consider, But Should Have

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.

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.

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.

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.

> 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.

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

"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.

> 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?

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.

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.

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.

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.

> 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

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?

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.

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.

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.

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.

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

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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.

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

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.

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.

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'.

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...

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

Should have taken the salary.

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.

'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.

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.

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!

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

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- permanent left overlay

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