For most people I know who join or start companies, the primary goal is not to get rich – it is to work on something they love, with people they respect, and to not be beholden to the vagaries of the market- in other words, to be independent. The reality is being independent often means having made money and/or being able to raise money from others.
A while back, I posted about how I recommend thinking about non-founder option grants. In the comments, Aaron Cohen made the point that given today’s “good” exit sizes and standard equity grants, most non-founders will not gain independence even in the (non-extreme) good cases:
Most startup employees need to realize they are on a journey and that in addition to making a few hundred thousand dollars on a good outcome they are learning how to become more senior at the next company. Real wealth creation will take founding, seniority, or staggeringly large exits.
As Aaron said, you shouldn’t think of joining a startup as just joining a company. You should think of it as joining the startup career path. This career path could mean starting a company as your first job. It could also mean working at a few startups and then starting a company. (In my view, if your goal is to start a company, it is mostly a waste of time to work anywhere but a startup – with the possible exception of a short stint in venture capital).
Maybe you will make some money working at a startup, but more importantly you will hopefully work for founders and managers who are smart and willing to mentor you and eventually fund or help you fund your startup.
The startup world is extremely small. If you’re smart, work really hard, and act with integrity, people will notice. Contrary to popular wisdom, you will actually have more job stability than working at a big company. And hopefully you’ll go on to start your own company, gain independence, and then help others do the same.
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Why would you work for a startup if you wanted to run a startup?
Totally agree. And it's my path: worked at two startups, now starting my own.
Guy Kawazaki made an interesting point though once: that you can also learn valuable startup skills by working in sales at a big company, like a P&G. Don't know what to make of that. What do you think?
[...] This post was mentioned on Twitter by Mike Gowen, semilshah. semilshah said: Dead on & should be taught in high school & college RT @cdixon The ideal startup career path http://www.cdixon.org/?p=1652 [...]
Great post. I’d also mention that sometimes with a startup instead of finding a group of people that are smart and you want to continue working with post-exit. You learn a lot about what NOT to do in your own startup.
Hey Chris- Totally agree with you on this with the exception of one point- “mostly a waste of time to work anywhere but a startup”.
DocVerse was start-up #3 for me. employee #6 at startup #1. Junior co-founder at startup #2. Primary founder startup #3. My experience would echo what you are describing.
That said, in hindsight, my experience at Microsoft was extremely valuable. But it was unique.
I would say that working at a company like Microsoft or Google or any other large company is valuable if you are able to get exposure to how executives think, behave and act. If you are a line-level person working on building some product, you’re much better off served by joining a startup company and not having the encumberance.
My product strategy role was (in hindsight) was exceedingly valuable to building a startup because it gave us a pretty unique perspective on understand
a) what is important to people who make decisions at large companies
b) how a startup can successfully position itself against large companies (ie and answer the “well what do you do when Microsoft / Google / X gorilla decides to do what you are doing”)
c) building a network of people in the large companies that are the ones being talked about.
d) and more simply having an intuitive sense for what said executives find valuable and may end up buying, if that is the destiny of a company you start.
Of course this does not necessarily need to be the formula if the startup company you are building is going to be the homerun, swing for the fences huge success.
But on that startup career path, I would not immediately dismiss the value of “seeing the world from the other side” (whether it’s VC as you suggest, or a potential buyer / partner).
If you have an idea you are absolutely passionate about, you can start a venture yourself. If not, joining a start-up seems a great stepping stone to an entrepreneurial career. Familiarising yourself with the dynamic environment of a start-up and learning from experienced entrepreneurs will go a long way when you start your own venture. As for sales experience, it’s a tricky one. I believe sales experience is certainly crucial. But if you get too used to the structured supportive environment of a big company, you could struggle to adapt to the highly independent mode required at a start-up.
It’s as if this was an email directly to me. Ridiculously appropriate. Thanks Chris.
Chris,
Thanks for this gem. It really helps to crystallize a lot of the things I’ve been coming to understand lately. Working at a startup, at least for me, is really about learning and absorbing as much as humanly possible, meeting new people, and taking advantage of every opportunity that arises.
I’ve decided to take the career path you’ve mentioned. I just graduated and I just started part-time at a very interesting startup.
But I’m scared that I’ll be left by the wayside since I have a very limited role in the real growth of the company (I’m doing content management).
I don’t know how to be more involved in the company, particularly since I’m a programmer and my limited experience. How do you get on the in, where you can make a true impact with the company or any company?
err… I meant since I’m NOT a programmer.
If you want to be a founder in the future, but you’re going to be an employee for now, should you join a startup or “non-startup”?
Most startups are not run well. They’re not exemplars of good management. Even worse, the good startups don’t need to be run well; product/market fit erases all the sins of management. And you could probably say the same for most non-startups.
So I think you’ve got two choices.
1. Join something that is really taking off: Twitter, Facebook, pets.com, Hunch, Venture Hacks, etc. Have a big impact on the world and maybe make some money.
2. Or join something that has great management and leadership whether it’s a startup or a non-startup. How do you recognize it when you don’t know anything about management/leadership? I’ll think about it.
Jack Gill (http://j.mp/1r4t3L) — a VC-entrepreneur badass — used to teach a class where he suggested joining a non-startup first. I’ll try to dig up his class notes and share them.
Well, part of it is you need to work at a company where management gives everyone exposure to more than just their narrow area.
The ideal career path for the entrepreneur is one of experiences that nurture self-awareness in the face of uncertainty. Learning how to manage uncertainty is a cycle of adaptation around increasing levels of risk where limits are tested. Startups offer 360 degrees of uncertainty. Just as risk or uncertainty can embody anything and everything with respect to your life as an entrepreneur, managing it goes beyond the self and involves many stakeholders – founders, employees, investors, customers, friends, and family. This path will teach you the difference between honesty and authenticity, management and leadership, monologue and dialogue, failure and opportunity, hubris and vigilance, and anchor it upon experience.
Nivi – have you ever worked at a big company? I don’t know any entrepreneurs who have who would agree with what you are saying. IMO, Jack Welch knows as much about running a startup as I do running GE.
Cool post. I felt encouraged and a little enlightened at the same time.
Thanks for posting!
Join something that is really taking off: Twitter, Facebook, pets.com, Hunch, Venture Hacks, etc.
Twitter and Facebook are in a billion dollar category
Hunch in a to-be-proven category
Venture Hacks is an interesting blog
pets.com is an epic fail
Two out of five are “really taking off”, or more accurately “have taken off”. Very idiosyncratic list.
Great post! Made me want to join a start up even more than I already did. Looking to hire any ‘10 undergrads?
I’ve been thinking about this today as Eric Ries had a good post on GigaOm that sparked some thought process. I think working at a startup is a great way to learn the landscape, get hands-on mentoring, and network/work with the people you ultimately may want to recruit into your venture (or co-found with).
Fantastic article! I have been in startups my entire 12-year (so far) career. Started in the entertainment industry, than went into SaaS, than software dev, than startup consulting… and we shall see where I will land next.
But no matter the industry, being business operations guy in a startup has been my thing. I can’t imagine wasting all the time with red tape of large organizations. I work with the founders and don’t ever want to waste my time on “middle” managers.
I especially agree on getting rich part. You need to look at every startup as training ground for the one you will start some day. That is how I look at my career. I was a partner in my last startup, got out of there, and will get back into it some day, after I spend more time within ones I did not start.
Bottom line: surround yourself with the best mentors and only work for people MUCH smarter than you.
[...] läsning om att joina eller starta startups: The ideal startup career path av Chris Dixon & No starting gun av Jerry Neumann. (Via Henrik.) Maybe you will make some [...]
Thanks Chris. I recently left my job at a hedge fund to start a company. At my previous job, I was speaking and meeting with executives at Fortune 500 companies on a daily basis. Since we started our company, I have been networking with fellow entrepreneurs and discussing how they achieved success. The difference in approach and attitude among entrepreneurs and Fortune 500 executives is tremendous.
As a co-founder, my responsibilities are vastly different than any other job I have ever held. In a previous post, you referenced identifying and climbing the highest hill as individuals pursue their career goals (http://www.cdixon.org/?p=1706). The message is clear in both posts and I fully agree, if you know you want to start companies, stop wasting time and go learn by experience.
[...] The ideal startup career path — cdixon.org – chris dixon’s blog. [...]
Chris,
Great post and right on the money. Based on my own experience, I’d say that working for a big company isn’t useless to the start-up experience, its just not on the same path. Many of the skills you learn are relevant but all of them need to be adapted and morphed to make any sense in a start-up context.
Start-ups are absolutely one of those things you have to learn by doing. Just surround yourself with people who are really smart, have done it before and are willing and interested in sharing what they know with you.
And on the “don’t do it to get rich” point. While its overused “Life is what happens while you’re making other plans” If you plan to get rich . . . guess what. Do what you love and are passionate about, the rest will come.
Thanks Chris.
A proposed exception: if the technical field in which you want to startup is so immature that additional exposure enhances your ability to succeed later (e.g., robotics, quantum computing, wireless power, etc.). Your thoughts?
[...] From cdixon.org [...]
Great post. Having worked as the first non-founder employee at a well-managed startup, I agree with your points about the benefits of this position, as well as the fact this is not a position in which to become financially independent.
However, I also agree with some of the other comments that if you have the opportunity to work at a larger top-tier tech company like Google, Apple, Facebook, etc., this can be quite valuable as well in terms of managing products at large scale, growing your network, and building your pedigree for recruiting co-founders and opening doors with investors. That is, as long as you have solid startup experience to go with it.
I think you can only learn about the reality of a startup by being in startups, and frankly, you’ll learn new lessons in each one you participate in.
I disagree with the comment that startup success is entirely due to product/market fit, with management execution being most likely bad and irrelevant. Nor do I think that big companies are defacto paragons of management excellence.
However, one reason to work for a larger company is the “brand power” it brings to your resume, which can make it easier to get funded (not a guarantee but it can help) as long as you stick around long enough to rise up the ranks a bit. And in those times when you aren’t trying to start or build your own thing, the “brand” can make you more hireable.
Direct sales experience is invaluable for a business founder however only doing sales for a startup will you have to learn to solve the many many challenges that come with early stage, evolving products and business models.
[...] This post was mentioned on Twitter by Ayush Agarwal and Dan Ancona, Leona. Leona said: If you want to be a founder, but you’re going to be an employee for now, should you join a startup or non-startup? See http://j.mp/XTpYr. [...]
[...] CEO Chris Dixon has written some great blog entries on this subject. I agree with most of his thoughts but do believe that big companies can play a [...]
Chris:
Just back from a week of travel and catching up. I’m honored and glad to contribute.
In my opinion. Best way to start a startup carrier path is to actually do a simple trial run, fail quickly and proceed to improve on what caused the failure.
Causes for failure could be
1).Money — Take a high paid job and earn it.
2).Lack of contact — Join an industry and take a job that increases contact.
3).Lack of people skills — Join a small company where you can be easily promoted to a Lead.
4).Lack of experience/training — Join a startup as employee.
[...] This week saw two interesting and related posts on startups and hiring/careers. Mark Suster wrote about who you should hire into your startup, and Chris Dixon wrote about the ideal startup career path. [...]
Chris,
Love the blog, but I have to disagree with a portion of your post:
“In my view, if your goal is to start a company, it is mostly a waste of time to work anywhere but a startup…”
In terms of culture, management, best practices, etc., you’re certainly correct. However, working at a “real” (read: non-startup) company allows you to see the way things are done now, the problems that exist, and opportunities to disrupt huge industries.
I could give a litany of examples, but let’s just stick to some of the more well known ones: Salesforce.com (Benioff = Oracle); Siebel Systems (Siebel = Oracle); Intel (Moore & Noyce = Fairchild); Palm (Hawkins = Intel / GRiD).
Before I get jumped on, I’m not claiming that one must work at a “real” company, that startup experience is bad, or anything of the sort. I’m simply saying that non-startup experience is not “mostly a waste of time” for those who desire to start their own companies, especially in the enterprise / biomedical space.
Regards,
Jon
Full Disclosure: I’m a founder who interned at a large company in the field that my startup is in.
Jon – fair point. I am speaking more to the many people I’ve met who think that they need to go work for 4 years after college at MS or Google before joining a tech startup. Sure, you learn something there but if their goal is really to be at a startup I think it’s better to just jump in.
[...] Dixon talks about the ideal startup career path over on his blog. I agree completely and have been a recent fan of his thoughts and ideas. Further, [...]
Good discussion. I would only add that startups are not for everyone and neither are big businesses, and that you need to experience both to discover what’s right for you. You can learn good and bad habits at both and work with great people and losers at both. You may see yourself as an entrepreneur but realize that you need direction and a support system more than independence. The good news is that if you’re new to the business/tech world, you’ve got time to experiment, assess your comfort with risk, and find your path.
[...] The ideal startup career path (cdixon.org) [...]
[...] “the ideal startup career path“, by Chris Dixon (make sure to read the comments) Share and [...]
Great post. I would also add…..
1. I would argue that there are benefits to working for a big company as opposed to working ONLY in startups. Not necessarily IBM, GE or the world. Wouldn’t you think that there are benefits to gaining good experience and networking with smart people at Yahoo (in its heyday), Google, Oracle, Sun, Cisco, PayPal, etc.? This is the stuff that is really hard to come by at a non-rocket-ship startups. Many homerun founders actually built their career at big companies and start their own gig. Think Salesforce.com, companies founded by PayPal mafia, etc.
2. From your perspective, how scalable is getting the type of mentorship from executives and managers at startups? I’ve heard things like, “I don’t have time for everyone” quite often at startups. When that happened, I’ve seen people leaving almost immediately. Yes, you’re right about getting access to the right kind of experience, but the question is….. is 50 person “startup” too big to get that experience?
Genuine startup A players don’t work for other people. It’s as simple as that.
Jon: All that working at a bigcorp does is spoil you for life and make you dependent on being cuddled by others. The little market knowledge gained is not worth the sacrifice in skill you make.
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