NO. 3
The Startup You Work At Is Going To Fail
“Dad, one day, I want to walk on the moon,” says the little boy to his father, bumbling his way off the cleat-shredded field. His dad smiles and tells him that maybe, if he works hard enough and gets a little bit lucky, he can. Just like if he works hard enough at throwing the football, they might let him play quarterback. Only this is a little bit harder than that. The boy smiles and the two of them walk hand-in-hand to their old four-door Kia. They drive home.
The kid never becomes an astronaut.
* * *
A few weeks ago, a startup I had been advising for more than two-and-a-half years finally failed. The founder burnt out from constantly fundraising, realized the idea was never going to be the world-eating unicorn that it was supposed to be.
It was a reminder of what I have often told myself—that working at a startup with the idea that you’ll one day make millions from equity is akin to a little kid thinking they’ll one day land on the moon. Because while there are theoretically things you can do to make these events more likely, there is a vast universe of influencing forces outside of your control. These forces have far more to do with your chances of success than you ever will.
For one, the startup you work at is probably going to fail. Statistically speaking. And, talented as you are, your individual contributions are a lot more meaningless than you might think (unless you’re already jaded by this whole thing).
OK, but what if it doesn’t? What if you did pick right? What if your sacrifices pay off and the startup exits for >$1B?
Bad news, again. If you joined after ~Series C, you are probably not going to make very much money. In fact, you are almost certainly going to make less money from the acquisition than you would have if you had just taken a comfy job in Big Tech. If you joined at Series D, or E, or later, you are straight out of luck (in most cases).
You probably need to join a winning startup before Series C—ideally at the seed stage, or Series A at latest—to make off with millions.
Soul-crushing news yet again, because picking startups at this stage has a lot less to do with metrics and traction and a lot more to do with qualitative features, like how much faith you have in the founders. This is especially disappointing because even the best VCs, people who devote their entire livelihoods to this stuff, can’t pick winning startups at this stage with any optimistic degree of success.
It’s not just about equity, though. One oft-repeated piece of career advice from foudners and VCs is something like “Play for the front of the jersey”, meaning that if you want to grow your career, you should put the company first.
This holds more water (like a few droplets, but still) than the equity argument. If you join a startup at Series D and it eventually goes public, you probably won’t make ltos of moeny from the qeuity. But you will have a shiny “Series D to IPO” badge on your resume, which might help you with future job opportunities.
I will let you decide whether that morsel of clout is worth sacrificing lots of other parts of your life for. I’ve made up my mind, though.
My solution?
If you work at a startup, everything you do should be self-serving. And the definition of self-serving cannot include “increasing the chances the startup succeeds”, because realistically, that’s a pipe-dream. Everything you do should serve to increase your own personal wealth (either actual wealth, social wealth, or intellectual wealth) regardless of the equity or company outcome.
Enjoy it. Learn stuff. Make money. Make connections. But don’t fall into the trap that many people fall into.
Don’t emotionally or personally invest into the startup you work at. Don’t listen to advice like “treat the startup like it’s your own” from ex-employees at unicorns, taking comfy interviews on their sabbatical from their fall home in Europe. Don’t get too wrapped up. Don’t put in too many extra hours. Don’t care too much.
Simply don’t. Because it’s all going to end. Probably.
So have fun while you can, do good work, learn a lot. And find more meaningful things in life. Because the startup you work at, like a little boy’s dreams of one day walking on the moon, is probably already walking the path towards its inevitable resting place — dissolution; obsolesence.
“Dad, one day, I want to walk on the moon,” says the little boy to his father, bumbling his way off the cleat-shredded field. His dad smiles and tells him that maybe, if he works hard enough and gets a little bit lucky, he can. Just like if he works hard enough at throwing the football, they might let him play quarterback. Only this is a little bit harder than that. The boy smiles and the two of them walk hand-in-hand to their old four-door Kia. They drive home.
The kid never becomes an astronaut.
* * *
A few weeks ago, a startup I had been advising for more than two-and-a-half years finally failed. The founder burnt out from constantly fundraising, realized the idea was never going to be the world-eating unicorn that it was supposed to be.
It was a reminder of what I have often told myself—that working at a startup with the idea that you’ll one day make millions from equity is akin to a little kid thinking they’ll one day land on the moon. Because while there are theoretically things you can do to make these events more likely, there is a vast universe of influencing forces outside of your control. These forces have far more to do with your chances of success than you ever will.
For one, the startup you work at is probably going to fail. Statistically speaking. And, talented as you are, your individual contributions are a lot more meaningless than you might think (unless you’re already jaded by this whole thing).
OK, but what if it doesn’t? What if you did pick right? What if your sacrifices pay off and the startup exits for >$1B?
Bad news, again. If you joined after ~Series C, you are probably not going to make very much money. In fact, you are almost certainly going to make less money from the acquisition than you would have if you had just taken a comfy job in Big Tech. If you joined at Series D, or E, or later, you are straight out of luck (in most cases).
You probably need to join a winning startup before Series C—ideally at the seed stage, or Series A at latest—to make off with millions.
Soul-crushing news yet again, because picking startups at this stage has a lot less to do with metrics and traction and a lot more to do with qualitative features, like how much faith you have in the founders. This is especially disappointing because even the best VCs, people who devote their entire livelihoods to this stuff, can’t pick winning startups at this stage with any optimistic degree of success.
It’s not just about equity, though. One oft-repeated piece of career advice from foudners and VCs is something like “Play for the front of the jersey”, meaning that if you want to grow your career, you should put the company first.
This holds more water (like a few droplets, but still) than the equity argument. If you join a startup at Series D and it eventually goes public, you probably won’t make ltos of moeny from the qeuity. But you will have a shiny “Series D to IPO” badge on your resume, which might help you with future job opportunities.
I will let you decide whether that morsel of clout is worth sacrificing lots of other parts of your life for. I’ve made up my mind, though.
My solution?
If you work at a startup, everything you do should be self-serving. And the definition of self-serving cannot include “increasing the chances the startup succeeds”, because realistically, that’s a pipe-dream. Everything you do should serve to increase your own personal wealth (either actual wealth, social wealth, or intellectual wealth) regardless of the equity or company outcome.
Enjoy it. Learn stuff. Make money. Make connections. But don’t fall into the trap that many people fall into.
Don’t emotionally or personally invest into the startup you work at. Don’t listen to advice like “treat the startup like it’s your own” from ex-employees at unicorns, taking comfy interviews on their sabbatical from their fall home in Europe. Don’t get too wrapped up. Don’t put in too many extra hours. Don’t care too much.
Simply don’t. Because it’s all going to end. Probably.
So have fun while you can, do good work, learn a lot. And find more meaningful things in life. Because the startup you work at, like a little boy’s dreams of one day walking on the moon, is probably already walking the path towards its inevitable resting place — dissolution; obsolesence.