Between free gourmet lunches, relaxed dress code and the chance to become rich and famous at a very young age, startups have a certain sexiness that drives a massive amount of interest in working for one.
Startup founders have become the new age rock stars. They’ve become fashionable and idolized by the outside world. When their products become a hit, so do they. And, anyone who is fortunate enough to be along for the ride on their rocket, will likely end up with a mansion on Mars.
However, rocket ships are few and far between. In fact, they’re almost an anomaly.
It’s easy for someone to get caught up in the glamorized version of startups you see portrayed in the movies or on HBO’s Silicon Valley, but the reality is, they’re not for the faint of heart.
If you’re dreaming about joining a startup, here’s a few things you should know first:
Working hours are a fluid concept
One of the reasons that startups shower their employees with free food, beer and services is because they don’t want you to go home. Closing time really doesn’t exist. Startups need every ounce of every employee they have–which translates into very, very long days.
That said, most startups are flexible in allowing their employees to have some semblance of a work/life balance — at least that’s what they’ll tell you.
Nobody is paid what they’re worth
You might assume that in exchange for the ridiculous hours, you’d be paid handsomely. You might also assume that if you’re being asked to work in San Francisco, one of the most expensive cities in the country, you’d be given a livable wage.
You’d be wrong.
While startup salaries aren’t necessarily peanuts, until the company is either profitable or secured later-stage funding, you can expect to be paid well below market rate.
The upside: The equity, promise of a future increase and free food. Yum.
Equity is meaningless, until it isn’t
With the “upside” benefits in mind, it’s important for you to know that equity means nothing unless the company becomes something. It’s paper. And, statistically, the odds state that will be all it’s ever worth–paper.
The other thing you should know is that, if the company takes off, your shares will be diluted. Essentially meaning that the pie is getting bigger, but the size of your slice isn’t growing with it.
The good news is, if your shares are being diluted it likely means that the company is becoming more valuable. Also, if you do happen to land on a rocket ship, those shares, regardless of how small, will be your ticket to greener pastures.
Startups are always 6 – 12 Months away from shutting down
By definition, startups are high-risk, high-growth companies. Growth supersedes profit in most cases. Most rely heavily, if not entirely, on outside capital. Which means, there is something called runway. And, much like an actual runway, it has an end.
Healthy companies, ones that have either recently raised funds or mix funding and revenue, will have 12 to 18 months of runway.
Normal startups have between 6 to 12 months of runway. That means, there isn’t much room for error. It also means that if your employer can’t prove their worth in short order, you’ll be asked to cut your salary, or you’ll be out of work.
Startups run out of money all the time.
You’ll be expected to do much more than you know how to
You may apply to a startup for a specific job and that job may have specific requirements. However, once you start, that all goes out the window. You may have a specific title, but you most definitely won’t have a specific role.
All hands on deck is the term most often used. Employees need to adapt to the environment and help where help is needed. That might mean talking to customers one day and designing a pitch deck the next, meanwhile still serving your role as CFO.
As a benefit, you’ll be given a front row ticket to what it’s like being an entrepreneur.
All of your work might be thrown away
There is nothing more demoralizing than seeing months, even days worth of work, thrown down the drain. Welcome to the world of startups.
Things change constantly, and it’s even likely that the company you joined today does something completely different tomorrow. You need to be able to roll with it.
The plus side is, you never know if you’re with the next Odeo turned Twitter or Burbn turned Instagram.
You’ll need to know how to figure things out on your own
Startups don’t have a training program, or on-the-job training mentor to guide you along. Most often, you’ll be hired and expected to hit the ground running.
Most startup founders … in fact, I’ll go on a limb and say nearly 100% of startup founders didn’t come from a management background. They’re creators, not instructors. So, they likely won’t have the skill-set to groom you as an employee, even if they want to.
That said, startup founders have vision and can motivate you to no end. The really good ones can rally a team to massive success.
Every day is a new adventure
If you are the kind of person that likes your days planned out to a tee, startups will be hard for you to stomach. Very little of what you do will be planned.
You may wake up in the morning and find out that your employers site has crashed, or that you’ve been featured on the Today Show. Either situation, good or bad, means that whatever you had planned to do that day has just been postponed.
With that in mind, if you’re someone that finds excitement in unpredictability, you’ll find the unknown of each day to be exhilarating.
Your employer will probably fail
Last, but certainly not least, you’ll need to become comfortable with the greater than not chance that your employer is simply going to fail. Go under. Collapse. Go bankrupt.
Depending on the report that you read, there is a 7 in 10 chance of this happening. And, unless you’re working for one of the “transparent” ones, you probably won’t have much of a warning.
The good news is, if they’re hiring you, that means they have either revenue or funding, so they’ve already beat some of the odds.
If what I’ve just said hasn’t scared you away, you might be ready for the world of startups.
Risks aside, if you choose to work for a startup, you’ll learn more in 12 months than four years in any college classroom. And maybe, just maybe, you’ll find yourself on a rocket heading to Mars.
