If you think you are the perfect fit for the entrepreneur lifestyle, but you’re not yet sure if you’re ready to start your own, then I recommend that you take a job with an existing startup first to validate the culture realities against your dream. Without risking all your life savings, you may find that corporate desk you have as an alternative is a lot more satisfying.
Running or working for a startup is more of a lifestyle than a career choice. Be prepared for chaos, long hours, and small paychecks in the short-term. Founders stock, and stock options, will be worth nothing for the first several years, if not forever. The fun is the long-term potential of changing the world, and maybe even hitting it big financially.
So here is a rational hedge strategy I recommend, and see playing out every day in Silicon Valley and other startup hubs. If you have a spouse and kids, one of you needs to keep a solid job at a dependable large company like Intel, Apple, or HP. That one will provide the stable base income, medical and dental benefits for all, and the schedule flexibility to administer your kids’ activities.
The partner most obsessed with the startup lifestyle tests the water by going to work in an early-stage startup, similar to one they might hope to start someday. Here are some thoughts on how you can find that perfect test environment, and some recommendations along the way:
Look for startup job openings. Check Craigslist first, since most new ventures don’t have the money for executive search firms and the major job listing sites. If the startup has its own website, that is the next place to look. As with any job search, always play to your strengths, and stick to business domains and roles you already know.
Hang out where entrepreneurs meet. There are many organizations which cater to entrepreneurs, including The Indus Entrepreneurs (TiE) and local startup incubators. Get to know the people there, and ask them for pointers to new ventures that are still in the formative stage. Your best job leads will come from other entrepreneurs.
Explore investor websites and conferences. Most Angel groups and VCs advertise the startups they have recently funded, with pointers to startup websites, sometimes including open positions. Investor conferences are also a good place to keep up with what is going on, get to know some potential investors for you, and find what is hot.
Search online startup platforms and crowdfunding sites. There are a wealth of sources today for startups, including Gust, VentureLoop, AngelList, and KickStarter. Typically you can browse them by region or technology to find founders. Use LinkedIn to check for a fit, and craft personal resume emails and letters to make your case.
Kick your networking up a notch. Every geographic area has entrepreneur networking activities, such as startup weekends and tech meetups. There are many networking groups on FaceBook, LinkedIn, and others social media sites, which can help you increase your odds of finding a match early.
Once you find a startup that seems like a good fit, it’s still important to do some of your own due diligence. Every startup has a unique culture, driven by the founders, so talk to as many people in the organization as you can. Unfortunately, some startup teams are almost as dysfunctional as some families, and you need to avoid these.
As much as possible, make sure you understand the risk and the challenges ahead. Build yourself a list of specific questions, like the following, and get the answers, both informally and formally as you interview and make the rounds:
- Do you feel strongly about the product or service?
- How much money has been invested so far?
- What is the startup cash burn rate per month?
- Are more investment rounds required (runway)?
- Who gets stock options, and how many?
- When is cash-flow-positive anticipated?
Now it’s time to make a decision about working for a startup. Believe me, this one is a lot easier and less risky than the decision to start your own. But if you believe that you can drive the next big thing, and you are not afraid chaos and constant pivots, a startup is the place to work. It’s the best way to test your appetite for the lifestyle, and the best way to prepare for starting your own venture.