In recent years, the number of startups have bloomed with the rise of new technology, the allure of software, and the inject of sweet, pure capital that followed it. From the year 1977 to 1984 was known as the “Harddrive era”. Angel investments at this point in time topped $10 USD billion annually. Following this insurgence of industry and capital acclimatization, more entrepreneurs entered the landscape, as well as investors. The attractiveness of returns from tech IPOs became all of the rage.
In 1984, the hard drive industry became completely obliterated. From $9 billion total dollars invested at its peak, industry income fell by 98% — to a mere $1.4 billion.
The hard drive era had accomplished one feat: the average size of fund sizes skyrocketed. Investors entered the market in droves, increasing the average deal size hence, introducing skyhigh valuations and deal prices. As the market came out of its tumble, valuations trailed on modestly. By 1996, a young e-commerce company by the name of Amazon made its debut on the public market. In the next four years, we would see venture capital investments increase by 15-fold, from $6.3 billion total dollars invested to $90 billion.
In modern day, more startups are betting to become the next Uber or Airbnb. With increased sophistication in technology and hiring comes a lower barrier to entry, meaning there’s more competition than ever. Today, you don’t need to be a software engineer to build an app. With the right resources in hand, you can build a team of developers, project managers, and sales teams distributed across the globe.
Working for a startup is no longer deemed for the cool kids on the block; in fact, it’s become more of the norm. Lower barrier to entry, an ignited sense of belonging and a resume bolster is enough to keep the hirer’s inboxes filled.
In fact, I’ve never actually applied to work for a startup. These opportunities always came from a slight encounter with a so-so at an event, or other informal settings. Startup leaders are notorious networkers and they are always on the outlook for new opportunities, whether that be potential investors, partners or hires.
The First Time
There is no shortcut to mastery and success.
And so at 19, I began my first job at a startup. All I was given was a telephone number, and from there, an invitation to a team meeting to “check it out.” I was immediately called to a position that was highly out of my caliber and experience. But that’s the thing with startups—it’s often choosing your own adventure. Once you’re in, you’ll find yourself always having to wear multiple hats. It’s part of the fun, but it can also be one of the most counterproductive things from my experience.
You don’t just become a “VP” overnight. Getting to that position takes people with MBAs usually at least a decade. And for good reason. There’s no better replacement for skill and knowledge, than experience itself. VPs or Directors have honed in on a very specific skill set over the years, interacting with hundreds to thousands of employees, management and customers. They know the internal fabrics of how a company is run efficiently, the systems, and can predict the roadblocks ahead with greater accuracy.
There is absolutely nothing wrong with giving someone a chance. Or a greater challenge. But it has to be within their caliber.
When you put someone in a position that they weren’t trained to do, you’re probably wasting time in the long run. You’ll give the person access to a slight opportunity for growth before they get squeezed too hard and realize the stark reality of their inadequacy. Then tension starts to build because they fail to meet your expectations.
The summer of ’18 was a heavy one for me. I worked day until night, drinking vision for sustenance. I learned some things too fast. I realized now that taking shortcuts to meet deadlines are only going to bite you later. There is no shortcut to mastery and success.
And this is something very difficult that you have to grapple with working in a startup. In an environment where all the pieces seem to be moving at breakneck speed, how can you slow down without feeling like you’re being left behind?
The Funding Problem
Great teams can be built with little capital, but you’ll be hard pressed to build an excellent one.
The pressure is pertinent, and often the capital is strapped. Those two things combined usually don’t result in great outcomes or morale.
Great teams can be built with little capital, but you’ll be hard pressed to build an excellent one. When you’re investing in someone, you’re not just investing in a particular skill set or personality, but that person’s interactions with the world. Someone who’s spent tens and thousands of dollars on their education or training, worked for a handful of years and has dealt with the day to day in business, is not in the same terrain as a 20 year old that barely knows the fundamentals. Pure drive, sometimes just isn’t enough.
Sink or Swim
Leadership is not inborn, it is bred.
Perhaps, the greatest lesson that comes from startup land is that there’s not just one lesson. Everyday presents an opportunity for growth and a step beyond what you’re accustomed to. If that means prepping for a business negotiation 12 hours before, or writing in a medium you’re completely unfamiliar with – so be it.
Startup leaders are excruciatingly meticulous about the work being done. Everything must be done to pristine quality. They often have overbearing expectations of themselves to succeed, and carry that out into how they communicate with their teams. Imagine a coach in any major league sport. Entrepreneurs are trying to prove to the world and themselves that they can achieve what they set out to do.
Bear in mind that the majority of entrepreneurs are not actually leaders or stellar managers of people. If they were, they’d probably be working in corporate careers. Many entrepreneurs are actually visionary geniuses. They can create a highly technical roadmap to achieving some sort of end goal. But to achieve this, they realize that they need to scale, and to scale you need, you got it— human resources.
Leadership is not inborn, it is bred. Managing a growing team, while under the pressure crunch can become extremely stressful. As an employee working for a startup, you need to be prepared to deal with a CEO that doesn’t have a decade-long experience in management or holds an MBA. This is someone who is still learning every day how to navigate the harsh realities of building a functioning system. And in that process, might lead to personality clashes and mishaps.
I’ve walked away once because of the mismanagement of leadership. The fact is, finding the right place of employment is like finding the right partner. Your values need to be aligned and you need to know where the train track is going. If it’s going to a completely different destination than you’re headed to, it’s best, to be honest with yourself and them earlier on in the process.
The Stress
It’s the feeling of waking up and dreading what’s ahead, and going to bed, heart-pounding because you feel like you didn’t get enough done.
The nice thing about startups is that you can probably avoid the monotone routines because every day is a little different. However, there’s always a sense of uncertainty that lingers which can cause stress for many people. At a corporate job, you’re expected to work a high volume of hours, but in return, you get paid time off, health benefits, and access to bonus structures, stock options. And most importantly, you know the company isn’t going to go under any time soon.
On the contrary, when you work at a startup, there’s always an inevitable “what if?” You’ll have to pour your heart and soul into building the barebone foundation, and bear the greater risk it’ll go to zero.
The pressure to learn things fast, execute perfectly and get the momentum going when there’s no one to look towards other than your own team can be stressful.
At 19, I experienced for the first time what chronic stress felt like. It’s what turned me away from startups for a couple of years. It’s the feeling of waking up and dreading what’s ahead, and going to bed, heart-pounding because you feel like you didn’t get enough done. For people that have partners or families they want to take care of, or social lives they want to maintain, being on the front line of a pre-seed startup is not ideal.
Conclusion
Don’t get me wrong, there will always a special place in my heart that belongs to startups. There’s so much innovation, creativity and pure grit that goes into running one, and I always have the utmost respect for startup entrepreneurs. I got to learn so many things in a short time span that I would have never gotten at a traditional desk job. But it’s not always fun. It takes a degree of sacrifice, a fair amount of patience and risk that you can generally avoid working a normal 9-5. Although I am currently very immersed in the startup life, I always have to give people the caution that it’s not just hipsters and tech nerds sitting around the whiteboard with their colorful sticky notes—a lot of the startup life is a mental uphill battle.
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