When to Work at a Startup

Selam G.
6 min readOct 23, 2024

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Practical advice for tech grads after half a decade of experience

I feel that grad school (M.S., robotics and machine learning research at Carnegie Mellon) has been beneficial to me in two ways. The first is the traditional way — the ability to gain new and relevant technical skills, to master problem solving and further advance my technical education, and hopefully, to accelerate my career. The second is that it is time away from work so that I can think about what actually happened over the last five years. I’ve mulled over what went well or poorly and what I’d like to do differently the next time around (and oh, how I ruminated on what went poorly). It’s only during this “break” that I’ve been able to really gain some objectivity on my own experience and see that it kind of balanced out in the end.

a lightbulb taking off like a rocket might on a plain background

1. Don’t join a startup (as an employee) for the money

I chose a rather unconventional path when I graduated by becoming employee #1 at a weird lab spinoff venture right out of the gate. In the weeds of pandemic rumination I used to wonder what the hell I was thinking when I’d had a decent shot at being a mechanical designer at much larger companies — and for better pay. In the five years of actually working in startups, I would become intimately familiar with some key financial math: startup equity is largely a myth. For the vast majority, their privately held stock options will be worth $0 compared to the real stocks you can get from a publicly traded company. Furthermore, employees have very little visibility or control over whether their shares get diluted — in an extreme example, the gaming company Zynga once tried to make employees give back their stock or get fired.

Even if some exit event occurs, a $10k or even $100k windfall sure is nice, but will rarely make up for years of below-market compensation. Bob in the comments with a $1M+ cashout success story is in reality very rare, and he probably worked at Juul.

Who makes money from startup exit events? The answer goes in this order: investors, founders, maybe a few super early team members, then the rest of the employees. Sometimes even the founders themselves leave with nothing after a company is sold. In the book Uncanny Valley, Anna Weiner describes a pretty successful cashout of around $200k when Github was bought by Microsoft, so that’s around the order of magnitude paid to rank and file employees from a very successful exit (which, again, is relatively rare). So, if you’re in it to be rich, be a founder/co-founder. If you’re an employee, just aim to get paid market rate, and don’t fall for any promises of future riches.

2. Join a startup as a stepping stone

Through the reflection I’ve done now, I realize I’d forgotten a few key reasons for my choices: 1. I really didn’t want to go to grad school right away, and 2. I really wanted to gain some work experience in robotics. As I mentioned, I had a decent shot at mechanical design roles in big companies, but that wasn’t the field or role I wanted. In robotics, so many roles were asking for at least master’s degrees, and I was burnt out from my undergraduate program.

The wild venture I’d first joined was quite a rollercoaster, and I was very green. But it was a role in robotics, and it led to 2–3 more roles in robotics during my 5-year stint working. In the summer of 2023, I interned at Apple on a team that used and designed robotics and automation systems, before starting my masters in a robotics and machine learning lab. Certainly, my past experience helped. Sure, now that I am older and less cheerful I would probably roll my eyes and ask if it was really that necessary to be in “roles with robotics in the title” during those years, but ultimately I did succeed. There’s a sort of comforting irony that my younger, more optimistic self set me on this path and prevailed (robotics, like getting a PhD, is something people are attracted to independently of its earning potential, but that is a post for another day).

Finally, I want to acknowledge that not all new grads (particularly right now) are necessarily blessed with a plethora of options, and if a startup is your only option, it’s obviously still going to add to your resume, grow your career, teach you new skills, pay you, etcetera. STEM fields are very practical in that even when compensation is a little below-market, it can still be far better than many other jobs or fields on average, especially at the entry level.

3. Join a startup for flexibility or work culture

Startups are not exactly known for a relaxed work culture, but you may be surprised. When startups do pay below-market rate, or maybe market rate salary but cannot provide public stocks, they have two options in order to recruit good people: hire for potential rather than experience, which is why they are sometimes more friendly to new grads, or offer intangible benefits to experienced people. A lot of the small/startup companies I worked at actually had more flexibility than larger corporations.

I observed more flexibility given to working parents for example, more flexible hours, and more experimentation with remote work pre-COVID compared to publicly traded companies. A lack of rigid policies is both a benefit and drawback of startups — if you’re on the right side of it, you can find unique work arrangements (if on the wrong side, you will wish there was a real HR department).

Of course, a lot of startups do have terrible work environments, so it’s on you to get a good idea of what things are really like. Fortunately, I’ve found if I simply ask directly about work life balance, employees and hiring managers are pretty honest about it.

4. Join a startup to learn how to start a startup

Being at a startup does put you closer to how the business actually runs, specifically when there are fewer than 100 employees (if there are more than a few hundred, this may not necessarily be the case). In basically all of my roles, I saw the CEO or another chief executive every day, and often had meetings with them. I think working at startups are a great education for future ventures.

5. RUN in the other direction if:

The startup clearly expects tons of hours for below average pay. A lot of the time, they say this clearly in their job descriptions, because they hope people will fall for the myth that privately held options are worth more than $0. (Sometimes, the founder has just had too much of their own kool-aid.)

Occasionally, a startup with a lot of resources will pay quite well and also expect a lot of hours — that kind of tradeoff is up to you.

6. Start a startup because you think you can do it better

What is the allure of startups, why does it remain? Or at least, why does it remain alluring to me?

Startups are high risk, high reward vehicles for wealth and for change. Companies are inherently top-down organizations. We complain about a lot of things businesses do as employees or even just members of civil society. It’s an attractive idea that you might be able to actually do it better. In reality, companies exist inside complex political, social, and economic systems that make them hard to run all that differently from the next firm over, but I still admire those who try.

These days, I am more and more interested in the idea of bootstrapping a relatively small company. A lot of attention is paid to companies that raise a lot of VC funding or have $100M+ valuations. On the other hand, there are plenty of $5M-$20M businesses with successful exits we never hear about, producing loads of private rich people. It’s also a myth that successful founders are necessarily young. The average age of a successful founder is actually 45.

I’m still not sure where exactly I’ll end up when I complete my master’s degree, but, older and wiser, I feel more equipped than before to assess my options and negotiate, and these points are what I wish someone would have told me. As for a venture of my own…who knows, if nothing else I plan to revisit the idea in my 40’s!

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