So, what can you expect if you join a start-up, that is, a company younger than five years old? For starters, the work differs significantly based on funding, age and even the number of employees, said Simon Parker, director of the Entrepreneurship Cross-Enterprise Leadership Centre at Western University’s Ivey Business School in London, Ontario in Canada.
“Young start-ups are higher energy and can go off in all directions,” he said. “Longer-established ventures tend to be a little more stable.”
Jobseekers dreaming of taking a more entrepreneurial route take note: not all start-ups or new ventures are created equal. Here’s what it’s really like to work at a start-up as the company matures.
Welcome, employee number five
Pros: Being one of the first ones on the ground has its advantages. It’s the more storied start-up environment: days ending at 02:00, few defined roles and a collegiate environment, said Denise Doran, 41, director of Smart Wall Paint an office supply start-up in Dublin.
“We were all working in one room — it was busy and it was cramped,” said Doran who held corporate jobs at Dell and Hitachi before joining Smart Wall Paint in 2012. When the company received its first “six-figure order” for a paint that turns walls into whiteboards, the entire staff had to stop their day-to-day tasks to help with packing. Being responsible for everything led to some of the first employees become more entrenched in the team.
“It was almost like a family,” Doran said.
Cons: Early employees can expect a lower base salary than those joining at a later stage. (Though there’s more opportunity to earn money through equity if the business grows.) Doran said she took a salary cut when she joined Smart Wall Paint, but holds shares in the company.
Attending social events outside of work is almost mandatory if you want to fit into early-stage company culture. That can make it more difficult for employees with families, non-work commitments or serious outside hobbies to become entrenched in the team. At Smart Wall Paint, 90% of after-hours work events are attended by all 23 employees and only two people have children, Doran said.
For those who are not twenty-something males — the demographic predominant in many start-ups, according to PayScale.com, a salary comparison website that conducted a 2013 survey of top companies in the tech sector, which included start-ups — it can be difficult to relate to colleagues. Because she was about 15 years older than all of the early employees, Doran took on more of a coaching role at the start.
Joining after the millions roll in
Pros: Not all start-ups seek outside investors, but those that do offer something of an instant safety net for incoming employees, said Parker. Funded start-ups have “lower risk of imminent demise,” he said. The company can also be more selective when it chooses new hires and is usually able to pay higher salaries to those who join.
At Move Loot, a company that created an app that helps users get rid of used furniture, the $2.8m seed round has helped it hire employees who “wear multiple hats and work on different projects at the same time,” said chief executive Bill Bobbitt, based in San Francisco, California.
Cons: As the company settles in, employees can suddenly find themselves with a new job description or even a new boss — without much notice.
“They don’t yet have the right team in place to execute, so there is constant change,” said Tim Williamson, chief executive of Idea Village, a New Orleans organisation for local entrepreneurs. As the company grows, there’s likely to be little structure in your role, he added.
For some employees, succeeding in a start-up at this stage can be more difficult because it’s not easy to predict how you’ll get along with a small team. Move Loot’s Bobbitt said the company’s 25 employees are valued less for their technical experience, and more on how they work with other personalities on the team. “We definitely prioritise [cultural] fit,” he said.
It’s growing now, it’s really growing
Pros: As a start-up starts focusing on profit, employees often begin to feel as if they are working in a more corporate setting. New hires no longer get an equity stake in the company and each person’s role is more defined.
At Appster, a three-year-old mobile app developer based in Melbourne, working 40 or 50 hours per week is typical for employees who aren’t in management. That makes for a less hectic experience than the early days of working 08:30 to 02:00, said cofounder Mark McDonald. Some charms of a start-up remain intact. For instance, even as the 110-employee company grows, Appster has implemented “free monthly adventures” where the entire office spends part of the day skydiving or racing go-carts.
Cons: It’s tough to retain an informal start-up vibe as a more experienced team puts performance metrics in place to measure employee effectiveness. With more hierarchy within the company, waltzing into an executive’s office is no longer acceptable.
While McDonald and co-founder Josiah Humphrey were 18 and 19, respectively, when they started Appster in 2011, three recently-hired C-suite executives have more than 20 years of experience each. That sense of having more grown-ups in the room has made the company more focused on growth and execution, McDonald said.
Andrew Mason, Groupon CEO and founder, talks to the Stanford Graduate School of Business about why you should work at a start-up.