Why you should work for a startup
The benefits you're missing out on
I originally wrote this post a few years ago. I’ve revised it slightly and thought it would be great to launch my newsletter with!
Eight years ago, I took the plunge into the world of New Zealand startups. Since then, I’ve lost count of the number of times that family, friends, and strangers have asked me, ‘why should I work for a startup’? I honestly didn’t have an answer to begin with, but through these conversations I’ve come to a few realisations that I thought would be useful to share.
Let’s start by framing the question. Take Facebook, Airbnb, and Uber. These are some of the fastest growing companies from the last decade. The funny thing is that these were all once startups where success wasn’t obvious or guaranteed, yet people still decided it was a good idea to join them — why?
More opportunity
The main advantage of joining a startup is that it will offer you more opportunities, faster. Optimising your career for learning is one of the best career hacks to gain experience rapidly. Think about a graph with a y-axis labeled ‘experience’ and x-axis labeled ‘learning’, it doesn’t matter where you sit on the y-axis, just that your learning slope is steep.
The good news is that we’re developing a healthy disregard for where someone sits on the ‘experience axis’. We’re learning this from our friends in Silicon Valley who are the best in the world at finding high potential people who are undiscovered or unproven. Startup founders can’t afford to wait for the perfectly credentialed hire, nor can they afford them at an early stage. Instead, founders need to look for the anomaly — someone who can display raw ability, creativity, and commonsense. From Snowball Effect with Josh Daniell, Booktrack with Paul Cameron and Leighton Roberts at Sharesies, I found people who were disproportionately willing to hire and invest in someone who was unconventional. This created opportunity for me.
Accelerated growth
Spending a few years at a startup that’s scaling fast will give you more varied experience and personal growth than spending a decade at a Big Four consultancy or equivalent. A common misconception with startups is that they’re less prestigious or present roles that aren’t as important. The reality is that you almost always have more autonomy and authority to do things beyond your seniority. At Booktrack, I spent 2 years working side by side with founder Paul Cameron to multiply his time. From board meetings to pitching venture capitalists on Sandhill Road, I was able to soak up learning far beyond my level of experience.
These learnings will help you to thrive in ambiguous environments, be quick to improvise, and have better pattern recognition. These traits are a byproduct of being presented with thousands of unique decisions that are made in the face of uncertainty. It’s like compound interest for your career; the more experience you accumulate, the more exponential your growth becomes. It’s not like this opportunity doesn’t exist outside of a startup either. It’s just that a startup environment forces unnaturally fast growth and compounding improvement in order for a company to survive.
Chance to level up
You’ll have access to jobs you’re totally unqualified for and may not even be able to do that well (in the beginning). The expectation is that you’ll evolve and grow into a position that belies your experience, as a startup scales. You can expect startup career development to be totally non-linear, meaning there’s no ‘normal’ for your progression. The reality is that even if you’re the best person for the job, you’re not going to be on the Senior Leadership team of a large company at 25 years old. A startup on the other hand can’t afford to waste talent using bias against age or experience.
At Sharesies, I was hired into the Operations Manager role without any formal investment experience. On paper, it wasn’t obvious I was well qualified. I remember on my first day, I went straight into ordering several hundred thousand dollars of investments for our customers and battled all kinds of industry jargon. Now, a few years down the track, I have considerably more experience and in-depth understanding — to the point where I can simplify and break down almost any industry complexity. At some stage, I levelled up without even realising it. Put yourself in a position similar to this and you’ll generate a level of knowledge that becomes indispensable in many ways. Things can move so quickly that even if you’ve been around a short time, you can become the expert or go-to person for the whole company.
Shape your work
As a startup grows, you’ll get to learn new things and shape your job to whatever you get the most satisfaction from. In my experience, no day will ever be the same. A sign of a great startup is that they’ll first advertise any new roles internally to give the team a chance to put their hand up if they’re interested. It’s natural that when a company grows, its people figure out what they enjoy and are good at. It’s mind-blowing how much your own role can evolve over the period of a year.
People
You’ll meet great people at a startup that’s scaling. The best startups have this repeatable equation where they attract really smart people like a magnet. When you put these people together, they do awesome things and eventually go off and repeat this for their own companies. The Paypal Mafia is a legendary example of this, with Tesla, SpaceX, LinkedIn and Youtube founded by former employees. In New Zealand, there is a much smaller ecosystem but the effects are still evident. You can look at Xero as an equivalent, with former employees building and investing in companies like Pushpay, Vend and Sharesies to name a few. I’d recommend you embrace the theory that you’re the average of the five people you spend the most time with, because it has a history of repeating in startup ecosystems around the world.
Become a founder
Joining a startup can be the perfect foundation to start your own company. You’ll be able to observe the mechanics and intricacies involved in scaling a company first hand. Being involved across customer support, product, marketing, capital raising, scaling teams and managing risk are translatable skills wherever you go. And even if you haven’t been directly involved in decisions yourself, you’ll be in a better position to make them and understand the nuances.
Equally as important, you’ll put yourself in a position where you’re around people who will help you reach your goals further down the track.
Amplify risk/reward
Your chance at financial and professional success is amplified; taking on risk will always increase the offer of reward over the long-term. Startups are inherently risky and there’s certainly greater upside than a 9–5, but the probability that you’ll actually get rich is unlikely. It’s the most glamorised, and in my opinion, the worst reason to join a startup anywhere. You’ll likely be paid less for the first few years at a startup in comparison to what you’d earn at a corporate, because of all the advantages listed above. At a macro level, you can also look at the number of companies that are profitable, have successful trade sales or initial public offerings (IPOs). It’s a very small number. You’d be better off picking lottery odds than trying to guarantee or quantify some type of financial gain in the early days of employment at a startup.
On the other hand, you have an advantage that founders don’t — you can join at a stage where you can see if the company is really working before committing to it. This de-risks the decision the further along a company is. When I reflect on my time at Lightning Lab and Snowball Effect, I benefited immensely from carrying none of a founders risk but participated in all the learning. Risk can be measured in many different ways; product development, customer growth, unit economics or funding. All could be signs that show a company is reaching a particular stage of maturity. Take funding stages, for example. Seed funding shows a group of people believe there is promise in an idea, but it remains a very risky proposition with high reward if it works. Series A onwards the risk might start to lower and indicates people believe a company is beginning to work. Although neither stages of funding guarantee reward, they can be a helpful indicator of risk and upside.
Be Mission Driven
At the heart of any great company is its mission. For a startup to be mission driven the company must have been founded to solve a certain problem which its mission represents. The team is driven by solving the problem and the product gets better as a result of this mission.
It sounds fluffy, but it works.
Take Patagonia for example. Their mission statement is ‘We’re in business to save our home planet’. They don’t tie themselves to a product, they tie themselves to an ideal. This creates focus, alignment and commitment to the cause. It helps everyone understand what the company should do, but also what it shouldn’t do. It’s a big advantage and supports long term thinking.
Startups can do this much better than corporates. They can develop and clearly articulate their mission early on, even before a product. It creates a values driven narrative. You’ll find that when making decisions, that those values will speak to you. It’ll almost feel like the company is answering questions for you.
So, should you actually work for a startup?
As always, it depends! I can’t gift you the golden equation to startup riches, power or status. The benefits of a scaling startup are unquestionably better than most other equivalent opportunities I can think of.
You can put yourself in a position to maximise your own personal growth & learning, build your brand & network, and have the chance of disproportionate financial upside if it works out.
You also need to understand what to look for in a startup, they are not all created equal. This means knowing how to evaluate and build conviction in the company you want to join (hint: they’re not as risky as you might think). A post for another time!
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