The career dilemma for startup entrepreneurs

Leaving your day job to launch a startup is a big and difficult decision to make. It is made especially difficult because the skill set needed to run a startup is very different from the one you need to make a career in BigCorp, probably even more so if you have a technical background (like me).

How are they different? This is a gross oversimplification but let’s say there are three main activities performed in any company:

  • Producing. In a software company this is what the developer or designer is doing. They build stuff.
  • Managing. This is all the overhead activities that comes with more people, larger projects and multiple offices. It’s everything from managing customer requirements, writing change requests and setting salaries.
  • Selling. Selling is the act of bringing your product to your customers. For simplicity’s sake I include marketing here.

If you have technical background and want to make a career in a large company, most likely you will end up managing something or someone. Unfortunately, very few large companies have good career paths for technical roles. Even worse, “programmer” is usually at the bottom of the food chain and a so called “architect” will be spending more times in meetings with PowerPoints than actually producing (coding). I have spent years managing requirements in large telecom projects, for example.

When it comes to selling, very few people in a large organization work with actually driving and increasing sales. It’s usually a question of managing existing customer relationships. So, the skills needed look like this:

A corporate culture where managing is the most important skill will be characterized by endless meetings, a lot of document overhead, lots of middle managers (often competing with each other in political struggles) and long decision times (often months or even years).

In a startup, on the other hand, there are basically just three roles: hacker, designer (both producers) and hustler (sales). The skills in a startup look like this:

Yes, managing will be important some day in the future, but not when leaving the corporate career path and starting something new.

So there is the dilemma: you’re not just saying goodbye to your corporate salary, you’re also saying goodbye to skills that will reward you in the corporate career ladder. A hard choice.

Of course another way to look at it is: do I want to spend the rest of my life having endless meetings, working with document overhead, fighting political struggles with middle managers and spending most of my days without moving the needle?

Perhaps the choice isn’t so hard after all.

(Discuss on Hacker News.)

  • http://www.facebook.com/matteus.akesson Matteus Åkesson

    Why do big corporations need the management overhead, really? 

    • Pelle Jöns

      They don’t, but the managers do.

  • Pelle Jöns

    There’s another important problem with running a startup that’s not obvious before you do it: You need revenue while the startup hasn’t got any, unless you are lucky enough to get funded immediately so you can lift a salary, or are already well-endowed financially and can take the risk for no pay (consider a wealth of at least $500k before you take such a leap).

    Companies despise employing active entrepreneurs as they think the person will not be loyal nor focused (been there…). An option is to be a freelancing consultant. If so, opt for long assignments that are relatively simple. If you are the developer in the startup, preferably don’t do development consulting. Another option is to simply lie about other engagements. Many do that successfully.

    Once the startup flies financially, you can make a choice where you want to be, but don’t underestimate the time it takes before you can get a healthy salary (typically years, and most likely never, as most startups fail).

    So entrepreneuring is not something I can recommend unless you can secure healthy finances over time. There’s seldomly any point working for free. Professional work should always generate income. That’s the whole point with work. Otherwise it’s a hobby, and people are happy to use you (been there, again…).

    Also, if you are the engineer early on, you have to make a decision whether you want to stay in such roles (and lose power; been there, third strike…) or instead choose a management job leading the company and the development work on a high level (definitely recommended). If anything, move away from system admin and similar work that can require work at any time (nights, weekends; you get the picture). In other words you need to move from a “coding monkey” position to a power position as soon as the company flies. Otherwise, don’t be an entrepreneur.

    I’m currently working with a startup at the very early stage, and I’m the only one in the company that understands anything regarding technology, which means our offering is completely relying on my availability. Without me there’s no offering. If the system fails (even though it might not be my fault) I have to fix it. I’ve promised myself to move away from practical work with the technology latest the end of the year.

    • http://blog.opportunitycloud.com/ Erik Starck

      “consider a wealth of at least $500k before you take such a leap”

      Uhm. That depends completely on your living expenses. 

    • Pelle Jöns

      This is the last startup I’m involved in as a worker. If this one fails I will only be a passive investor in other ventures, and secure revenue elsewhere.

      There’s truth to the classical Scarface phrase: “First you get the money, then you get the power, then you get the women”. That’s what life’s about, however trite it might sound. There’s also a saying (my own probably): “People don’t care where you got your money from, just that you have boatloads, and they will respect and fear you”. Human nature (sadly).

      Life’s not about proving that you are competent. You don’t get rich through competence. Most rich people became rich by sheer luck (owning stock in a company that they might not have contibuted to at all), so if that’s the goal, rather be a passive owner, and preferably in companies that’s found a profitable market. That’s the business model I will pursue from now on.

      I’m probably a cynic, but statements like “the good guys win” and “things come to those who wait” are simply lies. You’ll die before the waiting is over. Money is now and always.