So, you want to put up a startup.
You want to take the leap.
But it’s sooooo hard to let go of the cushy job you’ve spent numerous years cultivating…
You worry about the sudden disruption of that bi-monthly cashflow you’re now so accustomed to and built your life around.
So what now?
Here’s a solution – work for a startup. But don’t just work for ANY startup – work for a startup with traction.
What’s traction? I like Naval Ravikant’s (Angelist founder) efficient definition of traction: “Quantitative evidence of market demand.”
A startup has traction when it has increasing numbers – revenue, users, profitability, engagement, traffic, etc…
These are evident signs that the startup is WORKING, that the business idea has merit and potential.
I’ve been mulling about my own leap into entrepreneurship, and I think one of aspects of my own leap that I underrate the most was my stint in Chikka back in the mid-2000’s.
I underrate it because I started forming STORM before my stint in Chikka. But I think my 5-year stint in the startup (it was 3 years old when I joined) helped solidify my readiness in taking my full leap into entrepreneurship in 2008.
Recalling my stint in Chikka, and my own experiences in running startups, here are 7 reasons why you should quit your job now and pursue a job in a startup with traction.
1. It’s Inspiring
After 5 years in a very “corporate” environment (IT consulting), I had a very different experience on my first day, when our CEO sent me an email welcoming me to the team, and on the last line saying: “Let’s kick ass and rule the world!” I don’t think I’ve ever seen the word “ass” in formal company channels.
But after that, I was sucked in. I loved the informality and culture they were trying to create. I loved that everyone was in t-shirts. (my previous firm made me wear a tie)
More than this, however, I loved experiencing the growth.
In seasoned corporations, you’d expect conservative growth figures of perhaps 12% or 15%. In startups with traction, we’ve experience numbers like 700%, or even 3000% growth. This is undeniably exciting for everyone in the firm. When a startup CEO makes announcements about growth figures – everyone feels giddy (because everyone feels he/she contributed).
I remember reading that in Amazon’s early years, they made a bell ring whenever a customer would purchase from Amazon. This made the culture electric, they created a real buzz (pun intended) in the air. (obviously they stopped this after there came a point when the bell just rang incessantly.
Traction makes things ultra-exciting for a startup.
2. You Can Get Paid (!)
Here is where the big difference I think lies. At STORM, I tell people who come in: “You probably won’t get the same salary as you would command in a multinational – but present salary isn’t why you would join a company like us.”
But you know what? We would come close.
And combined with everything else we offer (culture, learning, excitement, contribution, input, upward mobility, etc…), this makes it a sweet deal.
You get to work in a startup without sacrificing that big a monetary sacrifice.
“But I won’t get equity.”
No, probably not the big 20%-30% ownership that you would get when you join a pure from-scratch startup with no traction, but….
3. You Have A Shot at Significant Shares
Noah Kagan was one of Facebook’s first 40 employees. He was there when Facebook was still in that rented house we saw in The Social Network. He was fired in his first year (so he didn’t get his shares, because it was vested). He basically lost $100,000,000. Of course, not every startup will be Facebook, but what I want you to look at here is the shares given to Noah. No, as the 40th employee, he won’t have the same % as Zuckerberg or Sean Parker, but got a much, much larger percentage than current employees get. (and he doesn’t need to buy them at $100,000,000 if he bought the same shares now).
Let me break it gently to you: you have NO chance of gaining significant shares in a seasoned corporation, especially if its public.
On the other hand, a number of startups offer equity shares to strategic/loyal employees. I know some young startups who give all their starting set of employees shares in the firm. In some startups, you need to prove yourself (if you do, most entrepreneurs I know would be happy to give you shares). Dino Alcoseba now owns a portion of the startup he leads, Strata.
If your goal in becoming an entrepreneur is equity (which makes a ton of sense, as this is how most billionaires acquire their wealth), then you might actually find it by working for a startup with traction.
You’re going to have to prove yourself, though. Bottom-line, you have a shot.
4. Learning From Success
You now have so many stories on entrepreneurs learning from their mistakes. We hear a lot of quotes like:
That company I started failed, but the learning I garnered from it was why I now succeed…yada, yada..
This is true, of course (in fact I write about it here).
But you know what? You can also learn from successes! Yes!
By joining a startup with traction, you can see what it takes.
You can work for a dozen failed startups, amass a TON of experience, and STILL have no clue about how a startup can succeed.
In working for a startup with traction, you can see and observe best practices. Want to be a successful startup CEO? Then learn from a successful one.
5. Upward AND Horizontal Mobility
Dino is my poster boy for upward mobility in a startup. 5 years from “Junior HR Consultant” to CEO. (We have numerous examples of less dramatic upward movements as well 🙂 I think this is a clear advantage of working for startups – you get to grow with the firm.
But horizontal mobility is extremely important as well. Increased horizontal mobility allows you to find your own traction within a firm, and contribute where you can do your BEST work (a tremendous difference)
In a large corporation, it is often very difficult to change departments. Let’s say you start a career in Sales. You go up the ranks. If, suddenly, after some discernment, you decide, “I want to transfer to supply chain,” don’t be surprised if it takes time for your request to happen, or more likely, it doesn’t happen.
With a startup with traction, you can be flexible. With traction comes growth. With growth comes the need for new positions. Hence comes the opportunity to not only contribute in different areas – and try them out!
Longtime JGL advocates would be familiar with AR, who originally worked as a recruiter in (the now defunct) Searchlight, then she was hired by STORM. She then became STORM’s HR Officer, then HR Manager, then transferred into Consulting, then became our Content Management Head, before occupying the position she holds now in STORM, which is Customer Service Head. All in 2-3 years!
For startups, traction is king. Once a startup experiences traction, the possibilities are endless.
Make your possibilities endless as well and join one.
(Part 2 coming up soon!)