Before graduating from grad school, I was thinking about starting a startup with two classmates – but that never materialized. Later, I joined Google, and after half a year, quit, relocated to San Francisco, and joined Xobni.
While I am not the ultimate expert on career advice, I have thought through the options many times. I have flip-flopped on my decisions enough to have achieved wisdom through pain. Here’s what I learned.
As a high achiever, there are four things you might want to optimize for:
- financial rewards
- public credit for your achievements
- work-life balance
- leaving a lasting positive influence on the world
(If you don’t agree with at least two of these goals, this article is not for you.)
This article tries to answer the question: Should I
- join an established company,
- start my own company, or
- join an existing startup?
I deliberately excluded the option of joining a mediocre large company. At a landlocked company, you’ll learn about upholding the status quo. If you join a company that isn’t number 1 or 2 in its field, and you’re in a junior position, you’ll see mediocrity, not strength. Mediocrity won’t let you to achieve the goals I outlined above.
Let’s go through your options, in the order given above.
1. Joining an Established Company[+] Getting your resume stamped
[+] Best work-life balance
[+] Higher initial compensation
[-] Harder to get public credit for your achievements
[-] Politics, established organizational structure
[-] Lower long-term financial upside
This is by far the safest choice. Joining BigCo is an society’s template. Your grandma will be proud of you. Your friends will congratulate you when hearing about the job offer. But is it a good deal?
Working for BigCo has great advantages: The company is already set up for success. All the infrastructure is in place. You can start working quickly, training and documentation are available. If you’re working on BigCo’s distributed file system project, you will learn about building distributed file systems (valuable experience), instead of spending time installing Linux on your startup’s server (less valuable experience). If you get in trouble, there will be smart people working there to ask questions. At the startup, you’ll be on your own.
You will have time off, and will enough time and money to burn to go to Barcelona for the weekend. You’ll lead a more balanced life.
But there are downsides to BigCo. While you will receive some equity and bonus in your compensation package, you won’t be rewarded as much for exceptional achievements as if you owned the place yourself. You’ll deal with office politics: People might be incentivized to make themselves bottlenecks, not to help you achieve ambitious goals. The public face of the company will be the founders, the CEO, and exceptional people with good relationships to the PR department, not you.
Here are two tips for people who decide to go this route:
First, make it clear to your manager that you have high goals. Set specific, measurable, ambitious goals. This will drive you to work harder, set you apart from peers, while at the same time allowing for rapid advancement.
More importantly, find a good mentor. Find someone whose incentives are aligned with the company’s, not your manager’s. Don’t choose a fellow engineer who’s just been at the company longer. Find someone several levels up. Higher-ups have a broader view. They’ll be happy to mentor you if you appeal to their sense of ego. Don’t be shy about emailing that Engineering Director.
2. Starting a Startup[+] Massive financial upside if it goes well
[+] Best if you’re an entrepreneurial type
[+] Best for getting public credit
[+] Best for positive world impact
[-] Hard to find co-founder
[-] Highest risk, potential public failure
[-] Need to build infrastructure that already exists elsewhere
[-] By far the most work
Paul Graham wrote the book on this topic. I’ll just give you my diffs.
If all goes well, starting your own thing will propel you into the stratosphere. You’ll be rich and famous. You might even have changed the world for the better.
There are risks and difficulties: If you fail (and you probably will), you risk public humiliation. This is especially true in European and Asian cultures, where you’ll have a lot of ‘splainin to do.
Out of all the options, this one takes the most work, and will lead to the most grey hair: Founders need to be emotionally stable.
At the onset, finding the right cofounder is success factor number one. You don’t want someone who’s a clone of yourself. If you’re an engineer, get an engineer with business talent. You’ll need technically proficient people, but also the guy who can negotiate good deals with investors and business partners.
Any place likes big companies. But for a high-tech startup, you need to be in a place that is accepting of you. A place where you can surround yourself with people of similar aspirations. Zurich is not that place, and Wichita, Kansas isn’t either. If you’re in Europe, move to London. If you’re in the US, move to the Valley.
3. Joining a Startup[+] More financial upside than BigCo
[+] Lower financial risk than starting your own company
[+] Stable income, especially when venture backed
[-] Less public credit than if you are a founder
[-] Less financial upside than starting startup
Doing your own startup is the adventuresome path to follow, but there’s a less risky middle way: Joining an existing one.
This is a hybrid model of 1 and 2: If the company does well, money will rain, not pour (early employees receive significant amounts of equity). You’ll have credit for being one of the people who made a future BigCo a success, but the cover of BusinessWeek will show the CEO, not you. If you join after significant funding, you’ll have a stable income to live from.
Before you decide about joining, make sure the startup is set up for success. Meet with the key people, and ask them all the hard questions about what product they will build, how it will make money, what the equity structure is like, who controls the company, what the relationship between the founders is like, and what their plans are if things go awry. Do the due diligence. Join if you’re convinced.
After a startup, you can always go back to BigCo (but with more battlefield experience), or start your own. That’s what makes this option a good launching pad.
Want to backtrack my agonizing about career options? Read these entries:
Update: Another take on this topic, but from a macro perspective: Marc Andreesen’s Pmarca guide to Career Planning.