019. The Career Casino – The Good/Bad/Ugly of startups
This one's going to get some hate comments.
I’ve been around the startup scene a while, long enough to forget that startups are freakin’ weird.
As Founder/CEO of Workflow, I lead a team that provides a Fractional Head of People/Recruiting resource to ambitious startups that are building high-performance orgs driven by people-first practices. 90% of our work deals with the ways that the company needs to improve – e.g. building their People processes and upskilling the leadership, so the startup can reach its full potential.
But 10% of the time… the challenge is with the employees themselves. Folks who are openly critiquing leadership decisions, or railing against the work/life balance, or just struggling to keep up.
Very very few employees are trying to be difficult. Generally, the thorniest employee and culture challenges come down to misaligned expectations, and not having the unique social contract of a startup job explicitly explained and understood.
Startups work differently than any other environment, and there’s a learning curve to it. Most of us learn the hard way – through our first startups. Of course, the nature of hypergrowth means we’re moving so fast, we promptly forget about what it was like to be a startup n00b, and the lessons don’t always get passed down.
We’re like fish in David Foster Wallace’s “This is Water.” But we could prevent a lot of headaches – and build much faster – by talking more explicitly about the water that we’re swimming in.
In this post, I’ll go beyond the clichés like “9 out of 10 startups fail” or “When you’re offered a seat on the rocketship, don’t ask which seat” – and dive into some of the under-explored angles – The Good, The Bad, and The Ugly of joining a startup.
(Disclaimers: 1. This post is not meant to be comprehensive – simply what’s top of mind for me in the last few days. 2. Below points are generalities, in real life there will always be exceptions.)
The Good
🤩 Startups are a casino, with a chance at an outsized outcome.
Whether you’re an employee, founder, or an investor – everyone is there to gamble. Of course, mission matters, as does culture. But at the end of the day, it’s all a game with a chance of winning. Nothing is guaranteed, and in fact the odds are against you. But the thrill is in potentially being able to walk out with a life-changing payout.
🤩 VC-subsidized career development.
Grow, grow, grow, is the name of the game, and while the goal is to take an idea to a massive company, the journey can also be a career booster like no other. At most startups, the biggest cost center is employee salaries. One of the primary reasons a startup takes VC (Venture Capital) funding is so that they can pay YOU, before customers can cover the bills.
If everything works as planned, there will be a constant need for people to do new things and take on new roles. If you’re good at your job and opportunistic, there will be TONs of ways to take on new responsibilities and move up the ladder. The people who are intentional about their career, and deliberately position themselves to grow with their company can take the most advantage of this scenario.
🤩 The ability to ask for Forgiveness instead of Permission.
Generally speaking, at large companies, you have to wait to earn a promotion, which gives you new responsibilities and rewards. But startups could not work more differently: You do not need a title to be useful and start proving yourself. Chances are, if the company is growing, there are infinite challenges to be solved and not nearly enough hands available. Pick up a problem and run with it. If you do well, the impact and rewards will come much faster than you’d expect. This is what’s meant by the phrase “You get promoted for the job you’re already doing, not based on your potential,” and it’s a big contrast to Big Company norms. (A corollary: At a startup you get hired on potential, but promoted on proof. This is the reverse of Big Companies, see this post.)
Looking at it another way – asking (or complaining) “When will I get promoted?” is the wrong move. And, unfortunately, it can signal to people around you that you don't actually understand the game you’re playing. Not your fault, but recognize that it’s a symptom of no one having explained it to you – until now! Now you know, you can do something about it. “No one is giving me a chance” is a poor excuse at a startup. Change the mindset and start doing what you can to solve problems.
🤩 If you’re a certain type of weirdo, there’s nothing more fun and fulfilling. Much like how some people are really into board games – because a low-stakes competition provides the structure to socialize properly without feeling too awkward – startups provide an environment for ambitious people to spend a lot of time together on something they’re passionate about.The common shared characteristics are:
Seeking a dynamic, fast-paced work environment – chaos is preferred over monotony
A desire to work hard, even though it’s against current trends – e.g. anti-work movements, “I don’t dream of labor,” etc.
A passion for figuring things out / how to solve problems, instead of being given a script
Startups for people who want work to be intense. That’s not true for everyone, and that’s ok! It’s a weird place for weird people. It doesn’t mean founders/leaders shouldn’t hold some responsibility to smooth the chaos, of course, just that unique things are possible when everyone buys into the intensity.
The Bad
😬 It’s a casino – you’re probably not going to win.
As the saying goes… the House always wins. VCs and founders don’t feel the brunt of economic shifts the same way employees do, with the way layoff or acquisition news comes down the chain. As an employee, you can realistically only bet one startup at a time, with your career. And the odds are, your equity will be worthless and the startup will eventually shut down.
😬 It’s supposed to be a pressure cooker.
A business model that takes on venture funding means the company is expressly buying into a very specific way of building, and that’s on a running clock. This isn’t about building slow and steady (maybe very briefly at the very early stages of Pre-Seed/Seed). As soon as Product-Market Fit is reached, the goal is to scale as fast and high as you can, hence the “rocketship” metaphor. Joining a venture-backed startup means jumping into the pressure cooker.
That’s why “work-life balance” is such a touchy subject in this space. Don’t get me wrong, work-life balance IS important, and founders should not be forcing employees to regularly work 80-100 hours/week (One startup employee told me that the majority of their coworkers were ending up at the hospital due to overwork). But at the same time, I also see a lot of people who apply to startups, yet their #1 priority is WLB due to burnout. This is a recipe for disaster.
A separate post for another day but: Work-life balance at a startup is achieved by great management (goal-setting, prioritization, individualization, etc.), not by employees’ complaints / the founders’ feeling guilty.
While you can achieve work-life balance to some extent, there will always be some pressure and a large part of responsibility is the individual’s. Again, that means startups are not for everyone, at all times – and that is okay!
😬 Compensation can be… complicated.
This is a post unto itself but TL;DR: Startups do NOT know how much to pay people. Comparable market data is not available for the earliest stages, so mistakes do happen quite often – and often, the company isn’t even aware of the errors!
Of course, there are some toxic bosses who deliberately try to underpay people. But at startups, it’s more likely that they just don’t know what they’re doing. It’s their first time figuring things out, too. And this is on top of the wild market fluctuations of the last ~3 years that makes compensation even more of a mess.
Stepping into the casino/pressure cooker means whether you meant to or not, you chose to prioritize other factors besides maximizing your salary. So do your research to make sure you’re not getting screwed over – but also… negotiate in good faith, your founder is probably not trying to f*ck you.
The Ugly
💀 Founders are strange, strange creatures.
What kind of a person wakes up one day, and decides to do the thing that’s statistically likely to fail, at the cost of many years’ of commitment and singular focus, to be worked to the bone and sacrificing every other aspect of life? Not normal people!
At some point, you will end up questioning the founder’s behaviors and decisions. This is also part of the game. Don’t assume they are rational human beings all the time. Nor should you assume the founder to have the same motivation, context, and values as you. You won’t always understand why they do the things they do. Hopefully, you can ask questions and they’ll be open to explaining, but know that won’t always be available. This doesn’t mean give them an automatic hall pass or that they shouldn’t ever be held accountable – just that employees should be realistic about the fact there’s a lot that’s inherently not accessible to them. Some examples:
Founders may be more drawn to making risky big bets like pivoting or entering a bigger market, rather than trying for the sure thing.
A founder may be called heartless for a layoff, when people don’t realize the decision was about letting go 20% of employees for a chance to stay afloat and try to make it with the remaining 80%.
💀 It’s the wild, wild west – you gotta take care of yourself.
Scaling from ~50 → 150 employees is an especially challenging period. I call it “The Awkward Middle School Years” – much like hormonal pre-teens who insist they’re not kids anymore, but are definitely not mature enough to handle… anything, really – At this stage, every process starts breaking down with newfound scale, but none of the solutions are built out yet. (Side note: The Workflow team and I can help with this.) Some of the growing pains include:
A decentralized, totally unprepared management layer
A People team that’s some combination of impotent / aimless / burnt out
Some truly disastrous executive mis-hires
Angsty culture transitions between the old guard vs. the new
Bonkers level of politics
... and so much more.
Good People work, which scales good Leadership, is the only sustainable solution to these challenges. But startups chronically under-invest in this area, which leads to overwhelming amounts of org debt. Employees don’t have to take this lying down, but can ask their leadership to raise their standards. If they’re not responsive, you should ask yourself if the growth of the company – and the rewards that come with it – justifies the lack of Org infrastructure – and the human costs that come with it. From there, you should make a decision about what’s best for you.
Facing the reality head-on
This is the importance of seeing the water you’re swimming in. People who go into startups with the expectation that everything will be cool! And easy! And a guaranteed lottery ticket! …will crash head-first into the cold, hard reality. This is how cynicism, entitlement, and in-fighting starts, and nothing productive can emerge from that place.
The gamble of startups is that you work hard, you’ll learn a lot, and there is a chance of an outsized outcome… but probably not. The founder’s job is to keep taking and doubling down on bets in the hopes of growing a $1B+ business – if they succeed, you do too, so your job is to help them achieve it. Mission, culture, impact – that’s all important, but it’s frosting on the cake, because none of those things are even relevant if the company dies tomorrow.
If you don’t like this, a startup might not be right for you, at least right now. You can go work at a bigger, more stable company – there’s no shame in it. They pay well! And you won’t have to work nearly as hard!
If you’re a startup employee, I’d love to hear about your personal Good/Bad/Ugly in the comments. And if you’re a startup leader that’s struggling with the 10% of problems that deal with misaligned employee expectations, my DMs are open and I can help 😉
Agree with this post? Disagree? Either way, throw some 🔥 into your startup’s Slack by dropping the link to this post and spark a discussion!
Jennifer Kim is the CEO/Founder of Workflow, an education and consulting company that trains the next generation of startup leaders on all things Recruiting, People Ops, and DEI. Through its flagship program, the HireEd Accelerator, Jen and her team have taught hundreds of startup leaders to make hiring a competitive advantage. Previously, Jen was Head of People at Lever and advised dozens of top startups. She is known for her hot takes on tech industry and culture as @jenistyping.
Thanks to Lauren Friedman, the best employee #1 I could ask for – for her contributions to this post.
ICYMI
Two viral posts from last week – check out the lively discussions in the comments!