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Transition from Being a Big Company Employee to Working at a Startup (Part 2 of 2)

A couple of weeks ago, I attended a talk by Bryan Starbuck (on Twitter @BryanStarbuck), a serial tech startup entrepreneur and a former Microsoft Engineering Manager, about how to transition from a big company (Microsoft, Google, Amazon, etc.) employee to a career at startups.  Bryan provided great insights and practical advice for people interested in this process.  I’d like to share with you a summary of this talk and the main takeaways.

Last week, we talked about understanding the type of startups you are interested and what startups look for in technical people, program/product managers, and marketing folks.

Today, we’ll continue with the second half of “Become a Startup Employee from a Big Company”:

Compensation package

  • Salary
    • VC funded companies and profitable companies tend to give “Market Rate” salaries
    • Market Rate is for startup companies, NOT BigCo salaries
    • You need to find value in the stock
    • VC funded software engineers are often $80k to $120k, and sometimes $140k
    • Early-stage startups
      • Even lower salary than VC funded companies
      • You need to value the stock (even more)
      • Software Engineer salaries stay high for startups because they are critical and rare
      • All other job titles have more pressure for lower salaries
    • Microsoft offers incredible salaries for level ~68
    • These salaries are unique and almost never occur outside of Microsoft
    • Staying at Microsoft and often be the best solution if salary matters a lot to you
    • Startups almost never can match your BigCo salary
  • Stock
    • Don’t do the following:
      • “My salary at BigCo is $190k per year. At a $80k salary for 3 years, I need it made up in stock. That is $110k per year.”
      • The company at the very early days is valued at $500k. This means you own 66% of the company
      • “I need to make sure I get my cash back from my reduction in BigCo salary”
    • Focus on only joining a startup that can reach $300 million in revenue or higher
    • This is why employees are Google, Microsoft, Facebook, eBay and other are well off
    • Here is a SECRET:
      • Startup employees make less ON AVERAGE than BigCo employees who are great savers and 401k investors
      • Startup founders make less ON AVERAGE than BigCo employees who are great savers and 401k investors
    • You MUST join a startup for the LOVE of the work
    • Only join startups that can reach a HUGE market size
    • Questions on Stock Options
      • How many TOTAL outstanding shares are there? (If they won’t answer this, then worry.)
      • If people VEST, do they keep their shares when they leave the company? (Almost always yes, if you pay off the strike price.  A few companies take them back.)

Different mentality

  • BigCo
    • Organizing big groups – for an advantage
    • People specialize by job title
    • Huge support staff (finance, HR, admins, etc.)
    • Have profitable existing products to fund new products
    • Time deadlines are artificial
    • Failure results in a “re-org”
    • Career holdback is politics and visibility
  • Startups
    • Very focused – solve one problem very well
    • Little overhead and politics
    • Employees have to span several job titles
    • Little to no support
    • Deadlines and results are do-or-die
    • Raising capital is necessary
    • Long hours, incredible dedication, risk taking and no bureaucracy are a weapon against BigCo competitors
    • Successfully growing revenue = survival

Next steps (for Seattleites)

  • Get involved in Seattle Startup Community
  • Constant learning
    • Focus on learning best, cutting-edge from Silicon Valley
    • Hacker News is a must-read – news.ycombinator.com
    • Build a list of blogs for learning
    • Join Founders Institute if you’re creating your own startup

Working at tech startups can be very different from holding a job at tech giants even though you continue the same line of work.  Each career choice has its own risks and rewards.  Just like career transition in any other industries, taking well-planned steps and thorough research will make this transition smooth and gratifying.

If you’re a software professional, please help and take this quick career survey.  We will compile the result and write a blog about software professionals’ career satisfaction.

 

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