Do you have what it takes to work for a Startup company?
Are you considering to work for a Startup company? Whatever the reason, I have some important insights for you so you can double check your intentions and, if you are still keen, some useful tips where to find and network with real Startups.
There is a good chance that my ‘teaser headline’ got your attention because you’re either a Startup founder, a Startup employee or you’ve considered becoming one of these. Don’t get me wrong, I am not a Startup expert. However, I have mingled the last 18 months in the Australian Startup scene, attended endless events and presentations and spoke to many Startup founders and staff members as I wanted to arm myself with as much insight and tips as I could possibly grasp.
I want to share with you some of what I’ve learned, hoping that it will help inform your decision to try out the Startup market.
Let’s start with the definition of a Startup business
Dr. Google will offer you 100 Variations on the definition and I am sure that you will also find at least 50 – 100 self-professed Startup Experts with a detailed explanation. I don’t buy into long and complicated stories, so allow me to offer a simple definition courtesy of the guys from Crunchbase.
Starting a new company doesn’t mean you’re in a Startup. A new accounting firm, café or manufacturing firm is a challenge, but it is a known business model and there is a roughly known way to deliver and consume it. Startups are about something new. Something no one has ever done the way you want to do it. It’s new value, value in a new way, or value to a new customer. It’s new, which means there is a lot to learn. It’s new, therefore attached with a lot of risk.
Next – let’s talk about the Top 3 Myths of working for a Startup company
Myth # 1 Don’t worry about the pay cut you can always try to get equity in the business
Almost everyone I spoke to who joined Startup companies was excited about the opportunity of getting a potential equity stake in the business. I learned in my research that most people joining Startups are under the impression that their initial equity package is just a teaser of what’s to come, but the truth is most often quite the opposite.
Startups, especially those backed by investors, are notoriously frugal with equity. Most executives often have less than 10% stakes in the business, and the chances of them willingly giving out greater shares of equity in a booming business are small.
Money is managed tight in Startup companies and there is an underlying mindset that if the business is performing well, the appreciation in your small equity stake makes up for a lack of performance pay. Most Startup employees with equity still had no significant salary increase after 2.5 years – 3 years after joining a start-up and many of my interview partners knew that at any moment, they could be fired without real cause and with no severance pay to speak of.
Myth # 2 You will be an ‘Executive’ in no time with more responsibility and experience
The concept of internal promotion seems to be the pitch with almost every Startup. The reality is that there are shockingly few non-founders who work their way through the ranks at Startup businesses. Let’s face it – Australia is a big Island and the most common feedback I received from Startups was that they are forced to reach outside the organisation for new talent as the business grew.
Add to that that most Startups are often cash-strapped and pay salaries at below market rates. Also, forget everything you know about traditional interviewing and salary negotiation. Inevitably, titles become a form of currency at Startups. In an attempt to make concrete the value of those titles, organisations have to find a way to keep enough people in junior positions to give weight to the new creative senior titles.
So founders are often more likely to give existing staff the snub in order to attract new talent by dangling more senior titles in front of their faces.
Oh, yes you certainly get more responsibility at a Startup, which may translate into better experience. Well the first part might be true but the latter doesn’t necessarily follow so naturally. The reality is that in all types of businesses, there are simple tasks to be done, and often times, for early-stage businesses, there is even more mind-numbing work to be spread around. Feel free to call that experience but you will not be keen to list that in your CV.
Myth # 3 The Business is backed, undervalued and you will earn a 6 figure + salaries soon
This is one of the most common teasers you will hear when interviewing at an early-stage Startup. If you’re thinking about joining an Investor or Venture Capital-backed Startup, you’ve already missed the bus. The chance that a Startup Investor allocated money for pay raises is tiny, at best.
So being an employee at a Startup might not be so glamorous, it’s being a founder that makes it really worth it. I spoke to many Startups and even those who were backed by good investor funding. It’s not uncommon for C-level executives to barely pull in 6-figures in a year.
Investor or VC money comes with lots of strings attached, so you will have to hold on to your precious equity stake (and let’s hope that you are, for the business’ sake), because it is unlikely that they are going to let their money be paying you a handsome 6 figure salary.
So be prepared to be patient because you will most likely not see real money until an acquisition or (more rarely) an IPO Launch of your Startup is on the horizon.
So you’re still not convinced? You’re still going to jump ship to the new trendy Startup shop? Perhaps the excitement, the passion and/or the chance of being part of something new or disruptive is what is really driving you. Okay, so here are some interview and search tips that I was able to gather:
You are worth what you negotiate
I have made this statement in a number of my blogs as it’s not only my personal belief but also confirmed after talking to so many Startup founders and staff.
I strongly suggest that you prepare yourself to be tough and to be original if you want to work for a Startup company. My summary is not about the touchy-feely stuff, where you feel compelled or driven or you simply must be involved. This is about investigation, decision making and harsh realities.
Negotiate your desired equity package before you sign on. Don’t wait, it gets increasingly difficult to grow your share of ownership once you are on board. If you’re taking a career risk, make sure you’re compensated for it.
Get the title that you want tomorrow today. Promotions are rare at Startups. You want to be working at a company that has a strong desire for your skills. Requesting a better title should be a fairly easy request to fulfil.
Remember that you still have a boss when you join a Startup, and that the grass isn’t always greener. Yes, the Startup culture tends to be liberating and progressive and that is pervasive. But, the reality is that you’re still taking a job, so don’t kid yourself, there will be plenty of witless work involved.
Do your homework. Check Crunchbase. The site covers global Startups and the list of Australian companies is growing. You can also go to Meetup.com or to Startupsmart.com.au. How much money have they raised? Who were the investors? Who is the CEO? What did they do before? Who is the CTO? What have they built before? What is the product? Who is the competition? Who are the mentors and advisors? Did they attend an accelerator? Talk to the staff. Talk to the other founders in their class. Find out everything you can about the company. Dig up what you can find and ask smart questions.
Don’t do it if money is your only driver. More than anything else, working at a Startup is about believing in the business. And if you believe in the business, you should be happy just to be paid to work somewhere you love. If you can’t set your mind to that, don’t work for a Startup.
Examine the culture and meet the team. “Culture eats strategy for breakfast” and Culture isn’t bean bags and free beer. Understanding what makes the culture of the company you’re looking to join is probably the single most important thing that you can know. If it’s not your single most important factor, re-evaluate your decisions. (My personal view!)
Ask hard questions. I recently interviewed to join a Sydney Startup and asked some pretty tough and direct questions. The founder didn’t flinch.
- How much money is in the bank?
- What’s the burn rate? How long can you last …?
- What’s the end of year goal?
- Who is your competition and what do they do better than you?
- Will I be offered stock in lieu of higher pay?
- How does vesting work? Is it a cliff or graded?
- Why did you hire ________?
- I talked to _____, they said _____. Why is that?
- Why are you interviewing me?
- Be Completely Transparent. We all have something in our lives that we’re not necessarily happy about, and we probably don’t like sharing it. Lay it on the table or it will either make it harder to employ you or it will eventually impede your plans. So don’t play games, don’t pretend and don’t hide. You are entering a brutal and small world. Startups hire fast and fire faster!
So, my dear friend of TheDyslexicJobSeeker, if all this hasn’t turned you off yet and if you understand that this isn’t the life for everyone then read on, you’re almost there.
You can work less, make more and probably have an easier road ahead of you if you sit in a cubicle for the next 20 years with trendy pants and polo shirts on casual Friday. But if the thought of that future makes you cringe, get cracking and work for a Startup company. There’s plenty of opportunity. You just have to have the guts to embrace it.
So get out your jeans and your casual shirt and venture into the Startup Scene.
Below is a list of Startup Networks, Investors, Forums and Co-working Spaces
Just Click on the names/ titles and check their Job & Career Opportunities or even better saddle your sneakers and head to one of their events.
Good Luck ! …and remember guys, whatever you do hunt wisely!
- The Entourage , Bunch of blogs , StartupAus , Delimiter’s , Anthill , Flying Solo , Shoestring , Events all over Australia, Digital Sydney , Angelhack, TieCon, Startmate, Muru-D, Pollenizer, Ignition Labs, Blue Chilli, PushStart, Green Lane Digital, Sydney Angels, Optus Innov8 Seed, Sydney Seed Fund, Innovation Bay, Heads over Heels, Fishburners, BlueChilli, Tank Stream Labs, Start Nest, Engine Room, R88 Business Hub, Homework, Protein Studio , Vibewire, Desk x Space, The Workbench, Sydney Dev Camp, Silicon Beach Australia, Meetup,