Doing the opposite now. Spent the last year in a very early stage startup. Finally got fed up with the low pay ("but we're giving you equity...") and the lack of direction. It seemed like every other week we had a new direction. And the latest new direction was so bizarre that I'm tempted to make a mockumentary about the whole thing.
Finally had enough of the startup scene; I'm going to go to work for a very large semiconductor company getting paid 2.5x what I was making at the startup. Feels like I'm getting a real adult job again.
tl;dr: I learned that not every statup idea is worthwhile.
It can feel that way for some startups. I was at one early startup and the direction was constantly changing, with feature and code thrown out weekly, or daily at some point.
The problem was the founder wasn't being honest with himself or us. He should have said, we didn't know what we were doing and we were just exploring, throwing anything on the wall to see what stuck, rather saying we were on a sure path and we were building software for real. We were really building demoware or PPT, not real software.
The cost and effort in building demoware is vastly different from building real software. It became incredibly frustrating to have misaligned goals.
I shouldn't. It's possible that some of the folks back there read HN and the idea would be immediately identifiable. Heck, maybe they'd even sue me for violating the NDA or something (but it's not like the bizarre idea is even monetizable).
But in a couple of years... that mockumentary idea would be comedy gold.
Startups aren't for everyone and not all startups are created equal. It would be unfair to assume all startups are misdirected and low paying. There are plenty of positions that pay market rate salaries and give equity. While you can definitely make a greater base salary at a semiconductor company or "adult" job. You miss out of the potential upside of startup equity, the excitement of a growing startup, wearing many different hats and trying to build something disruptive.
> Startups aren't for everyone and not all startups are created equal. It would be unfair to assume all startups are misdirected and low paying.
True. Didn't mean to imply that. This particular one was misdirected and low-paying.
> You miss out of the potential upside of startup equity
How many startups actually make it to the point where the equity is worth something? I'm guessing it's under 5% of them (even in good times). So at some point you need to make the calculation as to whether the equity that you're trading pay for is going to be worth anything. In my case I determined that it would never be worth anything.
Over here at TripLingo, we collaborate on the direction of the company. Our fearless leader(tm) however, has set the vision from the beginning, and continues to impress the vision with some small tweaks as we've moved forward. But we're a small team still - only 6 core folks - so YMMV if you're in a larger startup.
One yearns to work in/start a startup, yet the other side of mind is too accustomed to the stable, perhaps a bit predictable and boring, life that comes with a job in a stable company. Its a hard choice!
curious that this is the top rated comment. Seems a lot of people have had this experience. It's a shame that you joined a startup with no direction. Give the scene another try. There are entrepreneurs who know what they're doing.
same here - gave six years of my life to a startup, finally threw in the towel, joined a large company and (three weeks into my new job) have never been happier at work.
It seems to me like he is replacing money with "status." Building something on your own, and wanting to tell a room full of people about building something are completely different.
I second that. I do not know him personally but I've spoken to him at a Product meetup in NYC and came away impressed by his level-headedness, tenacity and willingness to share what he had learnt the hard way. I've been following his blog since then.
250k 3 years out of college? Jesus... I have plenty of Ivy league friends in IB & PE making no where near that.. He landed a serious gig. Definitely tough to leave something so cushy so young. Sometimes it really is all about the game.
It seems like a baller gig like that would make it _easier_ to quit and start something up. You'd be able to save so much more money, than say, someone who took a typical Silicon Valley entry level programming job. If he had chosen to work at Google, he'd have been lucky to make 1/2 that.
If you were guaranteed $250k a year with potential to receive more every 5 years or so, were able to buy a house, nice car, and support a family without worrying about any financial hardships, you think it would be _easier_ to quit? To go to what, the potential for no salary, constant paranoia of whether you made the right decision or not, and get into a field you know relatively nothing about?
It's a pity that these tremendous acts of courage are often overlooked because its _easier_ to walk away from a lot of money.
If you were guaranteed $250k a year with potential to receive more every 5 years or so, were able to buy a house, nice car, and support a family without worrying about any financial hardships, you think it would be _easier_ to quit?
Yes. If he was being paid $250K/yr, that means he did a great job while he was there. It would not be that difficult for him to return to finance. I've quit my job a couple times to travel and when I returned to the workforce my new position paid more than I made previously...
A. On the one end, one optimizes for overall expected yield. There's no finite target, the goal is "as much as possible". With this objective, walking away from a lot of low-risk money for much less and high-risk is much harder. Similarly, the lower the starting point, the more open you are to take up risk because you don't have much to lose anyway.
B. On the other end, one has specific targets. Once these targets are met, money ceases to be a decision criterion. With this frame, it is actually easier to walk away from a lot of money after you have achieved X, Y and Z.
These are simplified extremes of course, in reality it's a mix of both and shifts over time, but it goes to show that there's no single "correct" answer.
Starting anything and seeing it through takes courage. However, it doesn't seem more courageous to me to start a company with, say, $200k in the bank than to start with no money. Runway matters.
Agreed. Money is not really the thing in shortage, the ability to execute is. And the ability to implement the product, and by extension, understand what and how much resources are needed to implement a product, is a big part of that.
Privileged person decides to try hand at entrepreneurship, congratulates self for courage. Reading these is the textual equivalent of watching someone jerk off.
Man, I am getting tired of people shitting all over an article and getting rewarded with top comment status. Note, I didn't say "giving a critical critique". That's fine and should be encouraged. But this is just slinging mud for the sake of it.
Comments like this offer no value. Maybe it doesn't deserve a downvote, but it certainly shouldn't be #1.
EDIT - Just realized this post may technically not have the most votes, but since I can't see the score I have no way of knowing. I still stand by everything I said otherwise.
Some people just want to downvote the article itself, but there's no option to do that here—so when they see a comment expressing the semantic equivalent of "shit sux", they upvote that instead, for the same feeling of justice.
A person who spends his childhood as a poor immigrant and then goes on to achieve considerable financial success through hard work and merit is "accomplished," not "privileged."
That he would be willing to risk everything on a startup is indeed courageous.
It's such a sad spectacle to see petty jealousy (or at least lack of empathy) by commenters here. As someone who grew up in a poor family and is now an immigrant, I can confirm that anything you achieve is earned and accomplished. There is no privilege, just because one manages to make 6 figures a year through hard work. OP has balls, big ones, to give up such a good job to try his hand at a startup.
As other people have mentioned, it's a lot easier to try a startup when you've had a chance to save money from a $250,000 salary. Plus, you have the experience working for a big PE firm so you know you can always find another great job. I love hearing these stories, but his 'risk' wasn't really as great as someone who quits an $80,000 job with $10,000 in savings. I know that story too well :)
On the flipside, someone who makes very little also knows how to live with very little. I make $30k and have $5k in the bank - I am not terribly worried about quitting my job in the near future. I already make garbage salary, living off my own savings won't be very different.
No straight male gets sexually exited when they watch other male jerking off. But many people dreaming about starting their own company will find this really exiting and inspiring.
And seriously, i can't believe that this (probably) is the most upvoted comment in this article.
Yipit is an aggregator, so they actually arent a daily deal site in the traditional sense. Since the space keeps growing and more sites pop up, Yipit becomes increasingly more useful to consumers (in finding deals) and to the providers (they have a data product)
they aren't just another "daily deal site"--they're trying to own the space. also, from what I hear, their yipit data product (data and analytics on the daily deal space) has already experienced good traction from hedge funds and others interested in this growing space.
sorry, I meant that as daily deal sites keep popping up, it's much easier to use an aggregator than to browse individual sites. I assume they're trying to be a layer upon the daily deal space, not just a singular deal provider.
One observation: the slight against Warren Buffett is unmerited and undeserved. He is at least as good an example as this person of not living lavishly even with adequate money to do so.
My interpretation of this "slight" is that Warren Buffett uses money as a measure of success. It does not imply any sort of lifestyle just that he strives to be more successful and that means having more dollars. After having read a biography on Mr. Buffett I agree with OP on this and disagree that it is "unmerited and undeserved"
Of course he uses money as a measure of success, he's an investor!
Buffet did an interview on CNBC some years ago where the question where he was asked about success and his reply was something to effect of "Success doing what you love and doing it well".
This rings true to me.
A little anecdote told by my father in law, who was Buffett's pilot for a time, tells of Buffett being welcomed home to Omaha by a hostess. On remarking that he'd lived in the same house for 50 years it's claimed she said "Gee! You must have a lot of equity in that house Mr. Buffett."
Whether this speaks to the unpretentiousness of Warren Buffett or the unworldliness of the hostess is an exercise for the reader.
I totally agree. Buffett is extremely frugal and philanthropic. I think he is driven more by the thrill of business and deal making, rather than the pursuit of money.
Similar position here! Spent 4 years working as a programmer for a few faceless corps. While some of that was pretty interesting (wrote a quant investing engine from scratch) the politics eventually took its toll. So I spent the whole of last year travelling, came back refreshed and am now in the middle of a startup with two other college friends.
If anyone else is in a similar position I wholeheartedly recommend both ( the travelling and/or the startup)
Private Equity is an asset class focusing on equity in non-public companies. Technically, even Venture Capital is a part of PE. But people have started using the term PE for investing in mid to late stage companies, and the term VC for investing in early stage companies. In other words, PE invests in growth, makes leveraged buyouts or buys distressed assets. Recently VCs are also getting into the growth stage, making the distinction between PE and VC difficult.
A lot of MBA students in top business schools dream of getting into PE firms after MBA. But only those who have some finance background (Investment Banking, for example) have a realistic shot of getting in.
1) Private Equity is different from hedge funds... PE is investing rich people and institutional money in private companies, Hedge funds invest mostly in public stocks, though recently there has been a lot of alternative investments in this sector too... They "hedge" the market by having a mix of shorts and longs. PE and HF are very different, though related.
2) It's pretty hard... typically you go to banking for 2 years and then get to Private Equity via a headhunter (there are plenty that specialize in this exact thing)
It is worth keeping in mind that pithy little catch phrases like this typically ignore the fact that failure can come with some life-altering consequences. It seems like nobody wants to talk about filing for bankruptcy after running up a quarter of a mil in combined school loans and credit card debt.
It's also worth keeping in mind that he was making $250k a year doing something shortly after school and then started this company. Presumably he has a lot more of something or rather than the average (or even above average) person. His story is an extreme outlier.
It is about the success of an individual, not about the success of a company.
The success of a company, IMHO (and in the not so humble opinion of M. Ford) has three components : the bottom line, the reputation and the employees. So yes, buzz and money are on the top 3.
Quitting to start a tech company is much easier when you have had 3 years of banking $250k per year. It reduces the risk and stress of possibly eating ramen daily. Also investors love when entrepreneurs are willing to invest some of their own money into a concept.
More people on HN, in my opinion, would quit today if they had enough money in a war chest to survive for year or more.
Finally had enough of the startup scene; I'm going to go to work for a very large semiconductor company getting paid 2.5x what I was making at the startup. Feels like I'm getting a real adult job again.
tl;dr: I learned that not every statup idea is worthwhile.