Startups are exciting, always have been, always will be. Today, it’s the coolest job one can have. But at the same time, startups are also delicate, and need a lot of love and caring. You almost need to parent a startup – giving it maximum attention, dedication and being patient while it grows up. There are a variety of considerations when deciding what type of startup is most suited to your values, purpose, experience and skills. Let’s unpack one dimension that is critical – the growth stage of a startup. For the purposes of this article, we will focus on Early Stage Startups.
An early stage (aka emerging) startup is without question the most fun place to be. It’s at its infancy – breaking rules, inventing, testing and achieving break-throughs. You can be a central part of the evolution – building its culture from scratch, hiring talent, selling, marketing, managing finances, doing the admin and making the tea… it’s the best real-life MBA and your biggest test as a new startup leader. The founder (of the startup) will bring you onboard if he/she believes in you. If your thought process, creativity spectrum, IQ , EQ and moonshot ambitions are aligned, then you are all set!
1) Do you REALLY want it?
As in, really, really want it?
If you truly understand what it takes to be a part of a startup then you will know it can be both a deeply consuming and enriching experience. Your work will traverse into your personal life. It will be emotionally intense and requires you to have unshakeable belief in the founder(s) and the startup’s vision and mission. You should ask yourself important questions to gauge your readiness. Are you ready to fully immerse yourself in this experience? Are you willing to make friends with the uncertainty that comes from starting from scratch? Are you open and adaptable to learning and unlearning? Are you happy to wear many hats at once? Are you ready to embrace whatever comes your way – success or failure? Are you ready for the trade offs that come from working in a young company? Do you like building new structures and processes, or prefer to operate in a pre-built environment? Joining a startup is a career altering event – you can thrive and transform yourself, gain courage, resilience, learn to spot patterns and certainly gain wisdom. Go for it.
2) Money cannot be your top priority
You must ask yourself if you are prepared for the lows as well as the highs in terms of what you want to earn and what you actually do on a day to day basis? A common mistake I have seen many executives make is to join a startup and expect the salary and benefits package to be the same as a ‘big enterprise’. This is an unrealistic expectation, especially when joining an early stage startup. It is common however to receive equity and or options in the business to offset the salary reduction and also incentivise loyalty. An early stage startup can get funding from either angel investors or venture capital funds – often referred to as seed, late seed (in the range of $500k-$3m)or pre-series A funding (Series A funding rounds are for scaling startups and range from $3-7m depending on the geography and maturity of the ecosystem). It’s important to understand that early stage startups are walking on a tightrope – they have to be frugal with cost management, invest most of their capital into product development and you could go without salary for months and sometimes years!
3) What if your startup fails?
Startups fail.This is a reality you have to accept.The shutdown rate of startups in the first three years of operation is between 50-70%. It’s crucial that you exercise patience and support the founder(s) and the entire team to get through this phase of growth. The good news is that once you cross, there is a higher likelihood of raising a larger round of funding to scale and grow your startup to its potential.
Accepting that mistakes and failure can happen is an important part of the startup experience, and can provide you with important lessons of business and life. Some painful and some deeply enriching. So, if you are considering joining a startup, you must go into it with your eyes wide open and understand the risks involved.
The biggest mindset difference between a corporate and a startup is that the former is designed to train you to think in a specific way so you can integrate with the wider culture and follow the defined processes and systems intended to provide certainty and reduce risk. Failure is not tolerated and seen as a career limiter or reason to be fired. The latter (startup) is the total opposite. Without mistakes there are no big breakthroughs or rapid learning and development. The lean startup method (Build, Test, Measure, Learn) is an excellent lens to understand the mindset and attitude you will need to succeed.