Learnings from working at early-stage startups
Hey y'all,
I want to apologize for being three weeks late in posting my blog. There are no actual excuses other than poor time management and a lack of self-discipline. I feel bad for letting my readers down, but I will do my best to write a post every two weeks moving forward. Anyways, better late than never, let's get into this week's blog.
A few weeks ago, one of my friends reached out to me asking how to evaluate an offer he received from a startup with Series A funding. Before getting into the details of analyzing the startup my friend got an offer from, I think the first thing is to help my friend understand what he could potentially get out of an early-stage startup.
Having worked at two early-stage startups, I find the things I got out of early-stage startups to be quite similar. This post aims to help people decide whether an early-stage startup is a good fit for them.
What constitutes an early-stage startup?
There's no single metric that could clearly define different stages of a startup, but an early-stage startup typically has one or more of the attributes below:
- Small company size: Company with 50 employees or less, usually no more than a few people per function.
- Raised a small amount of funding: According to the Enterprise Tech 30 report Wing capital released, a startup that raised <$35M (typically pre-Series B) is considered an early-stage startup.
- Pre-product/market fit: According to Marc Andreesen, a renowned venture capitalist, product/market fit means being in a good market with a product that can satisfy that market. Pre-product/market fit means the company has not found a solution that could solve customers' needs very well.
- Minimal brand recognition: An early-stage startup is a company that most people have never heard about. Some examples are Linear.app, Airplane.dev, and Tome.app.
The most important thing you will get out of an early-stage startup
There are many factors people use to assess a job opportunity: learning, money, and work-life balance. Among those factors, learning is the most valuable thing anyone could get from an early-stage startup.
Why money you get doesn't matter that much at an early-stage startup: Some people may argue that you could potentially have a very high financial upside by getting equity in an early-stage startup. This is possible but not very probable.
To get some meaningful financial return from an early-stage startup:
- Your startup needs to do very well and have an exit (an IPO or acquisition): This is very, very hard to do. According to Investopedia, 90% of the startups will fail.
- You need to own enough equity: Unless you are one of the founding members or your role is important enough at the company, the amount of equity you could get is tiny as an entry or mid-level position.
Why work-life balance doesn't matter that much at an early-stage startup:
At an early-stage startup, you will constantly be in survival mode. If you want your company to still exist in six months, you have to do whatever it takes to keep things afloat. There is no work-life balance.
Instead of asking how many hours you need to work, I think it's better to ask how many hours can you work. There is always more work to be done at an early-stage startup, so it depends on how many hours you are willing to put in.
Why learning is the most valuable thing at an early-stage startup:
Since speed is often the most significant competitive advantage of an early-stage startup compared to incumbents, you will be exposed to many things at a very rapid rate.
Early-stage startups also need to develop something innovative to disrupt an industry, so you will get to try things that no one has done before.
Being in a dynamic and innovative environment would undoubtedly teach you different types of learning that you might not get from any other stages of the company.
Learning is the only guaranteed thing you will get out of an early-stage startup.
The types of learning you will get from an early-stage startup
There are two places where you will get most of your learning from at an early-stage startup: your role and the people around you.
Learnings from your role:
- You will learn by figuring things out yourself.
When I was at ForUsAll (FUA), I was the only person doing sales operations. Before joining FUA, I didn't even know what sales operations meant (I will write about sales operations in my future blog post). No one at the company knows how to do sales operations properly.
What I ended up doing was learning how to do my entire job by conducting Google searches. From how to use Salesforce.com to solve sales reps' pain points, I had to learn things from a lot of trial and error. To start performing within one month into the role, I spent countless hours trying to educate myself on how to do sales operations. Figuring things out myself is extremely painful but also very rewarding at the same time.
- You will be exposed to a lot of things.
When I was at Abstract, I needed to support operations for sales, customer success, and customer education teams. From designing each team's target to developing reporting to measure success metrics, I got a glimpse of how each team works at a company.
I also had a chance to work with the finance team to develop a revenue model to forecast how the company will be making money in the next year. Understanding how different departments contribute to a company's revenue is fascinating to me.
However, there's one big caveat to being exposed to a lot of things: if your company is not growing, the types of challenges you will be exposed to will be very limited.
Your learning at an early-stage startup could greatly depend on how well the company performs. If the company becomes stagnant, you will learn what things won't work instead of learning what things would actually work.
- You will learn how to make fast decisions with limited data.
At an early-stage startup, you will often have situations where you have no data or dirty data to help you make decisions. You will need to rely on your gut to make some critical decisions.
The speed of decision-making is what allows an early-stage startup to execute fast. A lot of time, you need to just go with one decision under time and data constraints. You might make many wrong turns initially, but you will gradually develop your intuition over time.
Learnings from people around you:
- You will get most of the learning from the people you work with the closest.
Many people might think your manager is the most important person that will dictate your learnings at a company. However, you will most likely go through many different managers in a short timeframe due to the volatile nature of the early-stage startup.
At ForUsAll, I went through four different managers over a year and a half. Similar things happened to me at Abstract. My first manager at Abstract left the company less than three months after I joined the company. Most of my learning came from my coworkers whom I work with the closest within the company.
You will most likely be spending most of your time with your peers, so your learning will also be highly dependent on the quality and background of your peers.
At an early-stage startup, you will often be surrounded by people with a lot of potential but with less experience. Whenever you couldn’t figure things out, your coworkers may not have the answers immediately, but they will often be your best thought partners.
- You will get direct exposure to the founders and executives.
The org structure in an early-stage startup is very flat, which means you will have a chance to work with the executives/founders at the company frequently.
When I was at ForUsAll, I reported directly to the Chief Revenue Officer (CRO) for a while. Getting exposed to CRO's thought process helped me develop my strategic thinking. In addition to learning directly from the CRO, I also sat across from the CEO, one of the company's co-founders, at the office. I was able to have a lot of organic conversations with the CEO and learned a lot of career advice from him.
Conclusion
It's challenging to evaluate a specific early-stage startup, but it is much easier to understand what you could get out of working at an early-stage startup.
Although an early-stage startup is highly likely to fail, you will certainly takeaway with some learnings. I believe learning is the most important asset you will gain from working at an early-stage startup.
If you enjoy figuring things out yourself, learning a broad set of things, and crave the speed of learning, then an early-stage startup could be a perfect fit.
Feel free to share your reflections, thoughts, or feedback with me @themagichen on Instagram or reach me at themagichen@gmail.com.