#1 - Opportunity for rapid personal growth
The blueprint of almost every startup is the combination of a small team working to solve a huge problem and aiming to conquer the world with their solution.
If this mission remotely takes off it means you will experience different stages of the company and get the ability to learn from the challenges associated with them:
In the scrappy startup phase you will learn:
- to be resourceful, as you try to achieve your goals with zero marketing budget and no established brand name behind you to open doors;
- to be flexible and innovative, as you continuously adapt the products you build in search of product/market fit;
- to be a jack-of-all-trades, as you'll be required to write a newsletter on Monday, reply to a customer support ticket on Wednesday and sign a client on Friday;
- from the best, since a flat hierarchy means you'll actually work side-by-side with your CEO, shareholders, and other senior personnel to get work done.
As you grow into/take a job at the scale-up phase you will learn:
- to become a great manager, as you figure out which currently non-existing team-management practices could help your direct reports do their best work;
- to specialize your skillset, as the company now has the resources to let coders code and marketers marketeer;
- to understand business economics, as you find out what happens when you start scaling successful products to new audiences and into new markets;
- to help shape company culture, as you'll become part of “the old guard” after 6 months given new employees join the company each week.
You might have to switch jobs 4x at a traditional corporation to learn all of these things, or it could be a 4-year stretch at a fast-growing startup in the same job.
#2 - Participate in an employee option plan
A common tactic for startups to be able to make you an appealing offer is to issue a form of company ownership as part of your compensation - essentially giving you a way to profit from the future growth of the company.
Employee participation can be structured in multiple ways, but the most common is for the employer to issue stock options that give the employee the right, but not the obligation, to purchase company shares in the future at a discounted rate.
Participating in such a stock option plan has some great advantages:
- it strengthens your alignment with the company — if the entire team does well and executes on its goals, you stand to do well in the future too;
- it adds an interesting component to your compensation — both early and late employees of Airbnb, Uber, Adyen, Zoom, and other tech startup successes made life-changing money when the company IPO'd;
- your early commitment, belief, and hard work in the company is rewarded in the case of an IPO or company sale;
But make sure to understand some of the risks inherent to startup equity:
- you can't always linearly match company value growth to (your) option value growth; founder and/or investor shares will sometimes have a different class of shares that provide preferential treatment in the event of a sale or IPO;
- in the Netherlands, a stock option is seen as a form of salary and profits will be taxed according to the same progressive scale that applies to your regular salary — this could mean forking over +/- 50% of your winnings to the tax authority;
- stock options usually come with certain restrictions on whether or not you're allowed to keep them if/when you decide to leave the company before an IPO or sale;
When you're offered participation in a stock option plan, you could consider asking a few PRO questions to better understand the value of what you're being offered:
- Consider asking what percentage of company ownership your package represents (ie. 10.000 shares of a company that has 10 million total shares outstanding is ultimately less than 1.000 shares of a 500.000 share company);
- The strike price (price at which you can buy shares in the future) is usually based on the valuation assigned during the most recent investment round. If that took place more than a year ago, you could ask the owners what they think a share would be valued at today to understand the discount you're already being gifted.
Adding stock options to your total compensation package has the potential to add a future payout that can range anywhere from an extra holiday allowance to a life-changing payout.
#3 - Flexibility in working hours and location
Since startups are generally so strapped for cash, they've become masters at finding creative ways to compensate you with non-or-low monetary items like:
- choosing your own model work laptop (instead of being stuck with a 10-year old Lenovo that's been passed around the office a hundred times)
- giving you access to free alcohol during Friday company drinks or complimentary lunch at the office each day
While these perks can be a great value add for choosing ‘the startup life', there's nothing quite as valuable as the option of flexibility in working hours and location.
Since most startups are trying to solve such audaciously big problems, they generally don't have time to waste on micromanaging employees*. If you have a job at a startup, all that matters is that you put in the work and deliver results. Nobody has time for the type of ridiculous office games played at Megacorp where you spend more time looking busy than being busy.
If you happen to do your best work at midnight, that's fine. If you prefer starting early in the morning and taking the afternoon off, that's fine too.
If you like the idea of spending 3 months working remotely from Bali, you could probably get your superior to sign off on the idea if you work at a startup.
*If you do find yourself being micromanaged, that might be a red flag about the company or team you joined. Consider addressing the problem or leaving the startup.
#4 - Work hard, play hard with your team
One of the more satisfying aspects of joining a startup in your early career is the fact that you'll likely be working with people in a similar phase of your career and life.
The unexpected turns you take in ‘startup life’ can make for a wild ride, which is why this lifestyle appeals more to people who are in an exploratory phase of life. Consider some of these situations you might encounter at a startup:
- you and a colleague are asked to fly to New York to pitch at an international startup competition and share a shady Airbnb apartment at the outskirts of Brooklyn to make the trip as cost-efficient as possible;
- your team pull an all-nighter to deploy an urgent new feature to save a client deal that will impact 50% of the year's revenue — you manage to save the day and your entire company celebrates your victory like you've won the Superbowl;
These kinds of experiences are formative to your career and personality. You'll find yourself forming lasting friendships with the people you were in the trenches with.
At a startup, work will likely find ways to intertwine with personal life, and for a certain period of your life, this can be the best thing you'll ever experience.