Should I Join a Start-Up: A Guide for Managers
After my last post, a bunch of people got in touch to ask me for more general advice. All the folks who reached out had two commonalities. They were considering going from a Large company to a Start-up; and they were all managers.
So, to extend and augment the advice given in my prior post - here is my general advice for how to think about the decision to join a start-up if you are a manager.
Note: This is a series of questions, a decision flow, where each question is binary yes/no. If your answer at the end of a question is No - then you can and should stop considering a start-up and don't need to answer further questions. If you get through all questions, then by all means you should consider the entrepreneurial world!
Question One: Are you comfortable with the idea of being paid a salary equal to your cost of living?
The whole point of joining a start-up (as opposed to working at a Large company) is that you believe in the vision and goals and people of the company and believe that it is going to be a massive win (a success which translated to a liquidity event). If you do not believe in the company, then you should not join that particular start-up. Period. If on the other hand, you do believe in the company - then you should be okay with going "all in" and maximizing your upside. In other words, you should be completely comfortable with not saving a penny from your salary and trading it all for equity. Doing anything else would, in fact, be stupid.
So right now you're probably thinking one of a number of things.
1 - "I worked hard to get to the salary I'm at right now and damn it I'm worth the money and even a start-up should pay me!"
2 - "That sounds really risky. What if there is no liquidity event? I'd feel better if I were making a little cushion in salary."
3 - "Only a chump doesn't negotiate their salary!! You get what you can get."
So, point by point...
1 - Yes. You are worth the money. And that is why you should negotiate for a stock package that reflects your worth. Because, again, you are doing this for the upside. Hedging your bets is for people who don't work in start-ups.
2 - You shouldn't work at a start-up. Sorry. Start-ups are risky. And they are for people who are okay with risk. Joining a start-up is going to give you ulcers.
3 - Again, you negotiate on your upside, not your salary. Now... that said... the attitude of "I've got to get mine" is antithetical to a good start-up culture. You'll either need to adjust your attitude or you're going to fail.
So... after thinking it through... would you be okay with the idea of telling your employer your (true) cost of living and them paying you a salary that is equal to that? Yes/No.
Question Two: Does the risk of a bad decision you make costing people their jobs scare you LESS than not being able to stop someone else from making that kind of bad decision?
As a manager at a start-up, you will be making decisions. All the time. And not through consensus. There will be no "I'm going to get buy-in from stakeholders." There is no CYA. You just make the fucking decision.
And a lot of the time, you're making the decision with nowhere near the amount of time or data that you need to make a really good decision that you are confident in. But you have to make the decision none the less.
And if you make the wrong decision - it will be 100% on you.
And as a manager, your bad decisions can cost people their jobs; can cost the company business and funding; and could cost the founders and employees and investors their company, dreams and upside.
This should scare you. It is scary.
But is it more scary than being powerless to stop execs doing dumb Yahoo-esque things?
So would you be more afraid of this pressure than of being helpless to watch a manager make bad business critical decisions? Yes/No.
Question Three: Do you view corporate management politics as a tool for getting ahead?
As with everyone who advanced to an executive position within a Large company (in my case a publicly traded one), I was a high adept of the organizational martial arts known as "corporate politics." To be a manager much less an exec in these companies you have to play the game. To win at the game, you have to enjoy it.
But these behaviors are seen (rightly) by most start-up cultures as cancerous - and the organization will expel you if you engage in them.
So can you put this aside? Can you stop playing the game? Can you be honest and transparent and focus on the goals and interests of the company over your own goals and interests?
If the best thing for the company is for you to be demoted and a new manager hired in over you - can you do that?
You must be honest about this one. It's easy to lie to yourself. But trust me - it will not only work out poorly for you, it will work out poorly for the company and for your reputation and career.
So are you able to place the interest of the company over your own self-interest? Yes/No.
And a final bonus point (not a question but rather a statement).
You'll need to put your ego aside. Management is not seen as the High and Mighty Priests of the company in a start-up. Management is seen as something between a necessary evil and a burden. It doesn't matter what your career accomplishments are or where you got your MBA from or how many times you've been mentioned in the WSJ.
Each and every day you will need to prove your worth.
Are you ready for it?