Downsides of Working At An Early-Stage Startup
There are many reasons you shouldn’t work at an early-stage startup, by which I mean a startup that has raised less than $10m:
• Uncertainty of income: You don’t know if you’ll get paid next month. I know one person whose salary was delayed for 10 months, and finally left unpaid, because the company never got the next round of funding.
• Low income: You won’t earn your market salary. This will affect other things you want to do, be it living a comfortable life, taking care of your parents, creating an emergency fund, saving for your retirement (it’s never too soon for that!), taking a career break to upskill yourself, or starting your startup some years down the line. All these goals will be delayed if you earn less. I’m not saying that salary is the only factor in choosing a job, just that you should think about these tradeoffs first.
• Probability of failure: The majority of startups that fail do so at the early stage, so joining after they raised $10m can be a better risk-reward ratio. It’s still early enough for you to make a big impact and be productive, before you’re hobbled by bureaucratic team processes.
• Quality of people: The competence of the people you work with is an important aspect of choosing a job, and the best people are often unaffordable or don’t want to work with an early-stage startup. So early-stage startups settle for people they can find and afford.
• No time to learn: Sometimes, this is explicit, such as founders who come from a business background putting engineers on a treadmill where they never get to learn anything, like a backend engineer learning DevOps. Sometimes, this is subtle: to learn, you have to take time off and reflect on your experiences, as sportspeople do when they record their performance and go through it with their coach after the match. But when you’re in an early-stage startup, you’re running from one match to another without a rest period in between. I’ve seen founders get into a local maxima and keep making the mistakes again and again. They don’t have time to think, because they’re running.
• Work-life balance: Early-stage startups screw up your work-life balance. Despite what opinionated people like Basecamp espouse, and despite what some of us want, you can’t build a startup while having work-life balance.
• Stress: In a startup you’re undermanned and have too many things to do, so you have to commit to unreasonable deadlines, taking on the stress that comes with it. And the stress is passed on to you from other people who’re stressed, like founders.
• Emotional damage: Early-stage startups demand more from people than is sustainable. This takes an emotional toll on people. This emotional damage comes in many forms: the feeling of having a string of failures to one’s name. A feeling that one is not good enough. Burning out, unable to put in effort to do anything, spending hours watching dumb Youtube videos. Emotional damage is subtle and hard to see, just as damage to your organs from an unhealthy lifestyle is not always visible when you look at someone. But that doesn’t make it any less real. If anything, such subtle problems are the hardest to overcome, since we don’t even recognise them. Early-stage startups take in people who’re fully charged batteries, and they leave discharged.
• Under-resourced to solve the problem: I did an analysis where I identified all the areas of work required in an early-stage startup: feature development, UX, latency, scalability, reliability, researching technologies, prototyping, hiring and so on. Adding them up results in an engineering team salary of crores of rupees a year 1. Most startups don’t have that money. They’re trying to do something they’re under-equipped to do.
I’m happy taking on challenges like building a great team. Choosing the right architecture. Putting the right team processes in place like coding standards, code review, continuous deployment, and canary, to balance quality and speed of execution. Thinking about how to speed up iterations. Building the right level of UX. Thinking about how to build a differentiated product. I love taking on all these challenges. But I don’t love taking on the challenge of doing all the above with funding mismatched to the problem.
Early-stage startups is not where good engineering happens. If you’re a highly skilled person, and you have the high standards that go with high skill, you’ll find it deeply frustrating when you find that you’re not able to do what you can because you don’t have the team to do it.
If you ask me to climb Mt. Everest, I look forward to the challenge. I’m not afraid of trying something I haven’t done before. But if you then tell me that we don’t have funding to buy equipment like the proper shoes, and I should use my bathroom slippers, I would consider that a dumb challenge to take on.
But if you think that’s a good challenge to take on, then it shows that your personality matches what an early-stage startup requires, in which case you should ignore everything here and start climbing. One size doesn’t fit all, so you should understand your personality, and do what fits you.
Hundreds of thousands of dollars, in case you don’t know what a crore is.