10 Facts About Working at a Startup vs. a Big Company

I’ve spent the last few weeks trying to recruit friends of mine to come work with me at my super early startup.  In doing so I’ve had to educate a lot of my friends on what it’s like to be at a startup, and why you might want to join one.  This blog post is a summary of all that advice.  Oddly enough, I wrote a similar blog post my senior year of college while interning at Redfin.  And since college I joined Cloudera before they were funded and left when the company closed its Series C, or third round of funding.  The advice below mostly comes from my experiences at Redfin and Cloudera.  I’ve also worked at Google and Northrop Grumman.

1) Responsibility, accountability, impact: at a startup it’s unavoidable to have lots of responsibility and accountability. There’s no doubt, too, that being at a startup will put you in a position to make a huge impact.  If you do amazing work the entire company and all of its customers will benefit from it.  And you’ll be loved for it.  You’ll get notes from the CEO and other leaders complimenting you on how awesome your work is.  On the flip side, if you make a big mistake, the whole company pays for it.  But keep in mind that most startup cultures prefer agility and speed to cautiousness.  It’s likely that your mistake won’t actually get you in trouble, as long as you were trying to do the right thing.

2) Risk: working at a startup is riskier.  The startup likely isn’t profitable, and probably only has at most 12-18 months worth of money in the bank (this is called the startup’s runway).  If the company does very well, the CEO will raise more money and extend the runway.  You’ll still have a job and each round you’ll get a salary closer and closer to market rate (more about this later).  If the startup doesn’t do well, you’ll be out of a job when the startup runs out of money.  But you’ll be forewarned if the CEO is transparent — most of them are in earlier stages.  A startup is risky because you’re building something from nothing.  You’re doing something ridiculously hard because you believe in it and want nothing more than to see it succeed.  You’re not failing even when all the odds are against you.  You’re the underdog in many ways.

And by the way, if you’re a good engineer you’ll have zero issue finding another job.  Zero.  Every company in software, big and small, needs more good people.  This trend won’t change for a long, long time, either.

3) Opportunities for generalists: generalists don’t do well at big companies.  Big companies want you to be really, really good at that little thing you spend all your time on.  Not at a startup.  Although specialization is still important at most startups, there are far more opportunities at startups for generalists.  I’m defining generalists as people that have interests in one field or many fields.  For example, if you want to be an engineer and work on the website, the data infrastructure, and the mobile app, you’ll love a startup.  Similarly, if you’re an engineer and want to get your hands dirty in marketing or recruiting or whatever, a startup is also a great place for you to learn and grow.  To be totally clear, I’m not saying specialists don’t do well at startups — they do incredibly well.  Generalists, however, don’t do well at large companies.

4) Ownership and leadership: at a big company you need to wait years and years to become a true leader with big ownership.  Not at a startup.  If you’re awesome you’ll be able to grow and move up in your career far faster.  Mark Zuckerberg would have never been given a CEO role at a big company he started working for after college.  The only way he could find himself at the top of an organization is by starting it, or in the general case by joining a super small team.  Your career will be accelerated in a major way by joining a startup.

5) Transparency: startups usually have far more transparency than big companies.  You’ll know why the CEO decided to raise a new round of funding, or why a VP of marketing was hired, or why the company decided to open a new arm of business, or how the CEO did the recent round of investment.  There will always be information that isn’t shared, though, for example salaries and equity compensation, certain board meeting information, and certain sensitive investor information.  But in general every other decision made about the company will be transparent.  You’ll get to see how the company grows, why certain decisions were made, and how the company reacts to competitors and business plan changes.  All of this will teach you about business and prepare you to do your own startup one day.

6) Company culture: you get to help define it.  A company will be, for the most part, an extension of the founders’ personalities.  But especially in the early stages you’ll have a huge impact on the culture of the company as well.  You’ll be in a position to define company-wide celebratory goals, or traditions that the team rallies behind.  At the end of the day a startup is just a few people in a room.  If you’re one of those people your personality will rub off on everyone else and you’ll help create a company that is as much a part of you as you are of the company.

7) Hiring: you’ll do a lot of interviews, and you’ll be part of the decision to hire or not hire someone.  You’ll interview engineers, marketers, sales people, anyone.  You name the position, and you’ll probably interview any potential candidate.  Even if you’re right out of school you’ll still be asked to interview.  Of course, if you don’t like interviewing, you’ll only need interview potential team mates.  Read: if you’re an engineer you’ll only interview other potential engineers.

8) Financial incentive: in general your salary will be lower than at a big company, but your equity, or ownership in the company, will be significantly bigger.  Depending on the stage of the company you join, you’ll be granted anywhere from a few percentage points to a micro fraction of a point.  If the company is bigger, you’ll get fewer shares and your salary will be more inline with the market rate.  If the company is smaller, your salary will be smaller and your equity will be far greater.  Equity has a long, long tail, meaning the first 5-10 employees get significantly more equity than all other employees that follow, with certain exceptions for executives.  This is especially true for the first and second hires, though.

A little more about stock: if you join a company that is already doing incredibly well, you probably won’t get enough stock to retire unless the company turns into the next Facebook or Google.  In most cases, you’ll only get retirement money if you’re one of the first five employees.  Otherwise you’ll get a large down payment on a nice house, assuming the startup does well of course :).  Let me say that all again: except in very rare occasions like Facebook or Google, you can’t expect to join a company that is already killing it and hope that you’ll retire on the money your equity brings.

9) Politics: I’ve never heard of a company with more than 50 people that didn’t have politics.  Politics are a necessary evil whenever a company reaches a certain size.  The point of no return is when the first middle manager is hired — or when the first job opens up that is about controlling people and nothing more.  Small startups can have politics, too, but in the early days there’s generally too much camaraderie and too much daily work to worry about power or any other bullshit like that.  Oh yeah, and while I’m here, unless the leaders of a startup are lame, there won’t be any bullshit.  Everything is pragmatic at a startup, or at least should be.

10) Be a part of something bigger than you: at a startup you’re a part of something much bigger than just what your job asks of you.  Sure, you need to write code, publish blog posts, whatever, but you’re doing much more than that.  You’re building a company.  It’s hard to describe what that feeling is like, though.  Being a part of a small company is somewhat like creating a community or finding new best friends.  You’re making something from nothing, with people who are in it for the same reasons you are.  You’re at the apex of what might become something big, something meaningful and different.  And the excitement is amazingly powerful.

On Our Online Lives

For as long as I can remember I’ve resisted the urge to put my life on the internet.  I signed up with Facebook just about six years ago, when I was a freshman in college.  Back then I delayed signing up while nearly every other college student was signing up.  Then when the Twitter craze hit I resisted even more adamantly, deciding that I already spent too much time hunched over a computer or phone.

I subscribe to TechCrunch, a very busy tech blog whose posts I read about 5% of the time, and a recent post inspired me to reconsider my aversion to the online life that so many of my friends have embraced.  The post talks about quitting social media, and in the process of reading I realized how much value there is in social media.  Today I’m announcing that I will start blogging again, will start using Twitter, and have connected all of these social services together (along with Yelp, TripIt, and others).  I know, you can’t believe that this blog–idle for just about two years now–will come back.  To be honest I’ve missed writing and am genuinely excited to return to it.  Hopefully you feel the same way.  And maybe you’re wondering what’s behind this sudden urge to catch up with the times …

It all started at the Hadoop Summit this June, where 1000 Hadoop community members got together to chat and listen to relevant talks.  Cloudera’s product manager, Charles Zedlewski, was giving a keynote announcing the cool new products Cloudera had been working on.  All of my coworkers were constantly checking their Twitter searches to see what people were saying on #hadoopsummit, whilst freaking out about the live demo’s progress.  I was completely intrigued with the real-time aspect of tweeting in this context.  I was amazed to see, immediately, how the community reacted to our product announcement.

From that point on I decided that I like to share two types of information: information interesting to one person; and information interesting to an unknown group of people.  In the case of the former I’ll send a SMS, email, or Facebook wall post to the person or group that would be interested in said information.  However, previously I had no good way to communicate the latter case.  Twitter and Facebook let us share information with others in such a way that lets the audience decide what to read, watch, or listen to.  And I think that’s pretty neat.

So wish me luck with my new internet life.  May it be valuable to you, the audience, and a learning experience for me.

In other news I’ve moved my site to alexlod.com (proper redirects are in place), and added a brand new theme.  Oh and I’ll never do 4square.  At least not yet ;).

San Francisco

I’m settled in San Francisco!  I arrived Saturday evening after a six-hour drive from Los Angeles.  The drive wasn’t bad at all; I had the stereo blasting, singing along like there was no tomorrow.

Eric, Eric’s friend, Nick, and I took it easy Saturday evening in preparation for a long Sunday.  In summary, Sunday consisted of a trip to IKEA, the assembling of furniture, a visit to Matt, and dinner with Sierra.  It was a rather eventful day.

Eric and I are living in the Castro Haight, which seems to be an awesome neighborhood, though I haven’t had much time to explore yet.  My first impression of San Francisco is that it’s an awesome town, with plenty to see and do.  What’s exciting me the most now, though, is my settlement in one place for an extended period of time.  I’ve mentioned before how drained I have been from hopping around Europe, Los Angeles, Cape Cod, and China; I am so, so happy to be staying in one place for a long time — to not have to pack and unpack my life.

Hello, San Francisco, you have much exploring to be host to.

San Francisco-Bound

There’s been a change of plans!  I’m flying back to Los Angeles on September 21st, only to be leaving a few days later to move to San Francisco, permanently.

A few factors have influenced this decision, the leading factor being visa complications along with a few other things.

I’m sad to be leaving Shanghai after just a month, but I’m insanely excited to be moving to San Francisco.  After over four years, I am finally returning to California, the land of milk and hunny, my adolescent stomping ground, my home.  I’m a short drive to Los Angeles, a short drive to some surf, a short drive to Tahoe snowmobiling, a short drive to Mammoth snowboarding, a short drive to canyoneering, a short drive to river rafting, and a short drive to all the other adventures that I’ve had in this wonderful state.  Mmmmmmm.

I’ve even considered turning into a wilderness man with a scruffy beard and long hair, though I’ve retired the idea for now.  Instead I decided to post some photos of great California memories.

California, here I come!!!