How to Pick Your Next Gig: Evaluating Startups(samvitjain.com)
samvitjain.com
How to Pick Your Next Gig: Evaluating Startups
http://www.samvitjain.com/blog/evaluating-startups/
37 comments
It's weird he used Zuckerburg and Jobs as archetypal examples and then said
> Be especially wary if there's a trail of people who've worked with the founder in the past, and have felt screwed over.
I feel like I don't even have to elaborate on why this is contradictory.
> Be especially wary if there's a trail of people who've worked with the founder in the past, and have felt screwed over.
I feel like I don't even have to elaborate on why this is contradictory.
I remember a CTO who idolized Jobs. And to make his company successful like Apple he proceeded to act like an asshole, apparently out of all the qualities and personality traits he deemed that to be the most important one. If someone accused him of that behavior he always justified it with "That's what Steve Jobs and look at Apple!". Everyone rolled their eyes but didn't say anything. They just quit and the projects were failed. The CTO was baffled and blamed others not realizing he was the problem.
Unfortunately everyone who worked at a handful startups has probably worked with someone like that.
You're making way too much sense for this thread, get out of here
[deleted]
Perhaps more perspective is needed before composing such blog post (undergrad, had single intern). Seems the norm now is once you've walked 100m, stop and write about your amazing journey.
My selfish considerations for a startup:
My selfish considerations for a startup:
Can I remote
Does it matter
You may have just been trying to make a point, but in case you were actually hoping to get contacted via this comment, it would help if you had your contact information in your profile. :)
Why? It's handy to have perspectives from all stages of the process (even if the math in the OP was maybe taking things a bit far). One of the problems with people who have advanced a long way down the line is that they've forgotten the actual things that got them where they are / have a slightly rose tinted view of things.
Also, many people are unlikely to get the opportunity to remote from their first startup gig out of college (and would benefit from not remoting so they can learn about the workplace and how things get done, etc).
Also, many people are unlikely to get the opportunity to remote from their first startup gig out of college (and would benefit from not remoting so they can learn about the workplace and how things get done, etc).
My advice to junior software developers has always been that the things that matter are:
1: "will I get the chance to work on technology that I really want to work on?"
2: "will I get mentoring from great senior developers?"
I advise them to spend the first five years of their career honing their skills in the craft of software development, I advise them to pay no attention to money - I say "it will come later if you have become a great software engineer".
Interestingly, I feel alot more is to be learned from working at a disorganised and chaotic company, at least in the early stages of your career. When you later see things done right then you'll truly understand why things are done in the way they are, because you know how it can be done badly. Which is to say, it doesn't matter if the company you work at is well run or not.
It always makes me feel that a junior developer is off track if their primary selection criteria is anything but the opportunity to learn how to become a great developer.
I guess maybe its different in Silicon Valley.
1: "will I get the chance to work on technology that I really want to work on?"
2: "will I get mentoring from great senior developers?"
I advise them to spend the first five years of their career honing their skills in the craft of software development, I advise them to pay no attention to money - I say "it will come later if you have become a great software engineer".
Interestingly, I feel alot more is to be learned from working at a disorganised and chaotic company, at least in the early stages of your career. When you later see things done right then you'll truly understand why things are done in the way they are, because you know how it can be done badly. Which is to say, it doesn't matter if the company you work at is well run or not.
It always makes me feel that a junior developer is off track if their primary selection criteria is anything but the opportunity to learn how to become a great developer.
I guess maybe its different in Silicon Valley.
How can you learn anything in a chaotic and disorganized environment? Either nobody has time to teach you anything, because everything is chaotic and disorganized and they need to fix it, or they are the reason everything is messed and you don't want to learn from that.
I feel that you would be much better off learning the right way to do things first, then going somewhere that is chaotic and seeing why best practices are in fact best. Much harder to unlearn the wrong way than just learn the right way in the first place if you ask me.
I feel that you would be much better off learning the right way to do things first, then going somewhere that is chaotic and seeing why best practices are in fact best. Much harder to unlearn the wrong way than just learn the right way in the first place if you ask me.
Never ever compromise salary for equity.
The equity is what you get in exchange for the risk that the company will not be successful; and for all the extra hours you'll probably be working.
The salary is what you get because that is how much your position pays in the market.
Things to compromise salary for:
- You need a job badly. You're already planning your own exit.
- If you were to get a higher salary somewhere else, you'd still prefer to work here.
- You don't need the money.
The equity is what you get in exchange for the risk that the company will not be successful; and for all the extra hours you'll probably be working.
The salary is what you get because that is how much your position pays in the market.
Things to compromise salary for:
- You need a job badly. You're already planning your own exit.
- If you were to get a higher salary somewhere else, you'd still prefer to work here.
- You don't need the money.
There are good reasons to want to work at a startup. The biggest is that you'll be allowed to get in over your head more so than you will at a more established company and putting yourself in sink-or-swim situations is the fastest way to learn to swim, so to speak. After having been through two acquisitions now, I've grown faster during the "whatever it takes" periods than I have in the golden handcuffs times that followed.
But the rough formula I've followed is to calculate my "investment" in the company and compare it to the company's other investors. I look at the company's last round and figure out how much the investor(s) paid and what percentage the investor(s) got. Then I can look at the offer and see what percentage I'm getting and work out how much that would have cost in the most recent round. If the salary hit I'm taking is considerably more than that, I either ask for more equity or walk away. If a company won't give me the information necessary to perform this calculation, I walk away.
It's not perfect, but it's close enough that I can make a somewhat logical decision and not simply cave in to my preference for working in a startup environment. Investor's shares can be somewhat more valuable due to liquidation preferences and other favorable terms, but employees can also get retention grants if the company is acquired, so I haven't figured out a way to balance those considerations.
But the rough formula I've followed is to calculate my "investment" in the company and compare it to the company's other investors. I look at the company's last round and figure out how much the investor(s) paid and what percentage the investor(s) got. Then I can look at the offer and see what percentage I'm getting and work out how much that would have cost in the most recent round. If the salary hit I'm taking is considerably more than that, I either ask for more equity or walk away. If a company won't give me the information necessary to perform this calculation, I walk away.
It's not perfect, but it's close enough that I can make a somewhat logical decision and not simply cave in to my preference for working in a startup environment. Investor's shares can be somewhat more valuable due to liquidation preferences and other favorable terms, but employees can also get retention grants if the company is acquired, so I haven't figured out a way to balance those considerations.
If you go by this, no one would bootstrap. By definition you give up salary for 100% equity.
Dont sacrifice salary for not enough equity is a better rule.
Dont sacrifice salary for not enough equity is a better rule.
Arguably that falls into the last category. If you can work for nothing but equity, then somehow or other you don't need the money (right now).
You probably shouldn't compromise much on salary, since plenty of startups are happy to pay market salaries.
The trade-off for startups vs. big companies is really in whether you're getting liquid RSUs (with clear cash value) or private options (with more upside), not so much on the salary side—especially these days.
The trade-off for startups vs. big companies is really in whether you're getting liquid RSUs (with clear cash value) or private options (with more upside), not so much on the salary side—especially these days.
Maybe the key here is distinguishing equity from actual control. Non-controlling equity in a private company is like buying a bond with no maturity date, relying on the founders' good faith.
Part II contains this Dustin Moskovitz quote: A lot of graduating students think I just want to work on the hardest problems. If you are one of these people, I predict that you're going to change your perspective over time. I think that's kind of like a student mentality, of challenging yourself, and proving that you're capable of it. But as you get older, other things start to become important, like personal fulfillment, what are you going to be proud of, what are you going to want to tell your kids about, or your grandkids about, one day.
I guess I never grew up, then. I still want to work on the hardest problems. That's what I would want to tell my kids about :-)
I guess I never grew up, then. I still want to work on the hardest problems. That's what I would want to tell my kids about :-)
This is a great hard analysis of evaluating opportunities but I am struck that there's not even a crack at evaluating the human interaction element of personal fit. Working for shitty people sucks, even if it leads to a boatload of money. You wind up spending more time with people you work with than your family, so try to price that accordingly.
There is in part 2: http://www.samvitjain.com/blog/evaluating-startups-2/
Must be nice to get to pick. My whole career I've only managed to have two choices on the hook once.
I agree with you. I always wonder who these engineers are who have tons of offers. I always wonder how come everyone's competing for talent, yet landing a job is so damn difficult.
This. Anytime I see a blog post with somebody humblebragging about simultaneous offers, I mentally call BS.
I assure you it's entirely true. I'm actually in the middle of interviewing myself and a few factors stand out for how I have quite a few offers:
1. Not applying online. I haven't submitted a single online application. It's significantly harder to get your foot in the door when you come in the front door. All of my offers have come through recruiters (shout-out to Triplebyte!) or referrals.
2. Having a track record matters. My resume contains many concrete projects which I shipped, most with an explicit business value.
3. Interview a lot. I don't have any expectation of passing 100% of my interviews, particularly because if I'm not enthusiastic about the company/role it's hard for me to fake it.
4. Become excellent at at least one aspect of interviewing. Personally, I'm excel at writing practical code under pressure. You can toss me a project and I'll have a solid prototype done much faster than you expected. A surprisingly large number of these kinds of interviews ended up with fully half the time left for me to ask questions. The companies which assessed this directly correlate with the ones where I've received the strongest offers.
5. Get good at every aspect of interviewing. Even though my strength is in practical programming/architecture (ie. actually building products) I'm also careful to maintain a solid level of competence at everything else as well. I review algorithms/data structures before any job search and can perform decently on algo questions. I make sure to research a company's principles/values (every company has these, whether explicit or implicit) before an interview and prepare appropriate behavioral examples.
6. Time things carefully. From the very start of my interview process, I've made it clear that I won't be making a final decision until a specific date. This ensures I have time to interview with all the companies I'm interested in and companies are far more likely to respect your timeline if you communicate it well before you receive an offer. Also, keep in mind different process speeds: I made sure to have my big company referrals submitted about a month before I even started talking to startups, yet my on-sites are still coming after the vast majority of my startup on-sites.
Of course, I'm leaving out (0) of being a really solid developer. If you're not really good at what you do, it's of course going to be much harder to collect multiple strong offers. If you're not yet really good, focus on that.
1. Not applying online. I haven't submitted a single online application. It's significantly harder to get your foot in the door when you come in the front door. All of my offers have come through recruiters (shout-out to Triplebyte!) or referrals.
2. Having a track record matters. My resume contains many concrete projects which I shipped, most with an explicit business value.
3. Interview a lot. I don't have any expectation of passing 100% of my interviews, particularly because if I'm not enthusiastic about the company/role it's hard for me to fake it.
4. Become excellent at at least one aspect of interviewing. Personally, I'm excel at writing practical code under pressure. You can toss me a project and I'll have a solid prototype done much faster than you expected. A surprisingly large number of these kinds of interviews ended up with fully half the time left for me to ask questions. The companies which assessed this directly correlate with the ones where I've received the strongest offers.
5. Get good at every aspect of interviewing. Even though my strength is in practical programming/architecture (ie. actually building products) I'm also careful to maintain a solid level of competence at everything else as well. I review algorithms/data structures before any job search and can perform decently on algo questions. I make sure to research a company's principles/values (every company has these, whether explicit or implicit) before an interview and prepare appropriate behavioral examples.
6. Time things carefully. From the very start of my interview process, I've made it clear that I won't be making a final decision until a specific date. This ensures I have time to interview with all the companies I'm interested in and companies are far more likely to respect your timeline if you communicate it well before you receive an offer. Also, keep in mind different process speeds: I made sure to have my big company referrals submitted about a month before I even started talking to startups, yet my on-sites are still coming after the vast majority of my startup on-sites.
Of course, I'm leaving out (0) of being a really solid developer. If you're not really good at what you do, it's of course going to be much harder to collect multiple strong offers. If you're not yet really good, focus on that.
The people are out there.
I could add my own story as a data point, but I doubt people want to hear another one if they’re in such denial.
I could add my own story as a data point, but I doubt people want to hear another one if they’re in such denial.
I would like to know your story. And also I would like to know what are the resources you followed/used to become a great front end developer. Any suggestions or tips will be highly appreciated.
If you don't round up at least 2 offers at the same time, you're 100% getting ripped off in comp negotiation. I _hate_ interviews, but I go the extra mile to get that second offer, because that's how this game is set up.
Some new college grads setup interviews with 5 or so companies right around graduation plus previous internships that convert. That's the only time bar someone known in the industry who becomes available.
Why do you assume only new grads set up multiple interviews? In my opinion, it's never a good idea to accept a new job without interviewing at least a few other places to establish your market rate.
True, but when you are graduating, lots of companies are looking at you at you on their schedule, whereas later in your career, just the way schedules line up might make it hard to get more than two or three offers (if you are lucky) you could respond to at the same time...
Let's first of all recognize that if you could pick likely winners (especially with limited financial and business info) you would be an all-star VC and not an employee. It isn't something you should even think about because you will never have enough info to judge accurately.
What you CAN do is figure out what stage the business is in. Are they pursuing series A funding? Series B? Looking to be acquired? Minting money?
Are they growing staff and offices as fast as possible? That could be good or bad. Companies that grow suddenly end suddenly, too.
How much runway does the company have? You can probably get away with asking this. What you probably want to hear is "we are self-sufficient and growing", what you will probably hear is "we have a vaguely long runway". What you don't want to hear is "don't worry about it" or "I have no idea". Healthy businesses have an idea. Startups should want people who are invested in growing the whole business, not just employees and they should like that you ask (otherwise, you are accepting risk for no day-to-day benefit. Stock options aren't the real benefit. Working a job where you can more fully contribute is the real perk).
Last, do you like and understand the product? If not, is the team awesome and has much to teach you? If not, don't join, no matter how shiny they make the future sound.
What you CAN do is figure out what stage the business is in. Are they pursuing series A funding? Series B? Looking to be acquired? Minting money?
Are they growing staff and offices as fast as possible? That could be good or bad. Companies that grow suddenly end suddenly, too.
How much runway does the company have? You can probably get away with asking this. What you probably want to hear is "we are self-sufficient and growing", what you will probably hear is "we have a vaguely long runway". What you don't want to hear is "don't worry about it" or "I have no idea". Healthy businesses have an idea. Startups should want people who are invested in growing the whole business, not just employees and they should like that you ask (otherwise, you are accepting risk for no day-to-day benefit. Stock options aren't the real benefit. Working a job where you can more fully contribute is the real perk).
Last, do you like and understand the product? If not, is the team awesome and has much to teach you? If not, don't join, no matter how shiny they make the future sound.
Essentially picking a good startup to work for is as hard as making a good investment. Except as an investor you can hedge between 100 startups hoping that one will give you a stellar return, but as an employee you are forced to put all your eggs into one basket.
It might be wise to also consider the community and values of a company before you commit to it. For most people, and particularly for people at startups or in demanding technical roles, you'll spend more time with your co-workers than almost anyone else. You'll be relying on them in crises, supporting them when they fall, and looking to them for a lot more than a check. In some ways a job is like an investment, but in others it's like a marriage.
Years ago, I picked a small startup (with a great CEO, a great team, a great product - all the things mentioned in the article), but when I think about the best part of the decision to join them, it was how the whole company came together to support me when I suffered a personal tragedy. I'm happy about that startup's success, but I'm even happier that I was able to make (and keep) the friends I made there.
Years ago, I picked a small startup (with a great CEO, a great team, a great product - all the things mentioned in the article), but when I think about the best part of the decision to join them, it was how the whole company came together to support me when I suffered a personal tragedy. I'm happy about that startup's success, but I'm even happier that I was able to make (and keep) the friends I made there.
Did I miss something? It lists 6 super successful founders with no startup experience - and then recommends to look for founders with past experience at a Rocketship or Serial Entrepreneurs as the best bet for how to evaluate startups.
[deleted]
I also don't get how Jennifer Lawrence fits in any of this. As a counter-example, Chris Pratt, an equally-successful actor, was discovered by a stroke of luck when he was waiting tables in Hawaii.
Listen, I get it. It's cute to come up with pseudo-mathematical models that justify one opinion over another and that might help us make decision-making easier (Startup A vs. Startup B), but allow me to make a controversial point: if you're thinking about working for a startup, don't. Starups traditionally underpay (due to offering equity), often have brogrammer cultures (and no real HR departments), will fire/lay you off at the drop of a hat, and working late hours with little recognition will be expected. The only exception to this rule is if you're one of the first ten-ish employees -- and, obviously, if you're a founder.
For obvious reasons, cap tables highly favor early investors and owners. If you have a high-risk/high-reward type A personality, start a company! If you just want to have a career for a few dozen years and then more-or-less comfortably retire, join Google, or Facebook, or whatever. It makes absolutely no sense to join a startup if you're not even getting one point of equity.
Further, vesting will absolutely screw employees -- with either inflated share costs (if you leave the company) or with unfair lockout schedules (if you ever IPO). Not only that, but equity is utterly opaque: you literally have no idea how much it's actually worth. It's important to understand that startups are a gamble for founders and for investors -- which is exactly why I love startups: it's a perfect mix of skill and luck. With that said, in my opinion, for mid-to-late stage employees, the opportunity cost no longer makes sense. Unless you need a job to pay rent -- I've been there :)