When we look at technology we use everyday, the great success stories all have one thing in common: competition. They all achieved their success despite healthy competition, or perhaps because of it.
For the last couple of months I’ve been plagued with wondering if I should stay at my current startup. I’ve been approached with a few different job offers that I haven’t followed up on, and maybe it’s time I pursued greener pastures. In the words of the Clash: should I stay or should I go now?
Changing jobs is a big, life altering decision and if you have my knack for risk avoidment it can be a horrendous see-saw of uncertainty. It’s this state of uncertainty that is ultimately the cause of the most unhappiness in your life. Leaving your options open is always less satisfactory than making a firm decision.
When comparing offers from other companies, you need to compare the full package which is a lot harder than it looks.
- Health benefits / Health insurance
- Overtime compensation
- Pension plans / Pension matching
- Stock purchase plans / Stock discount
- Stock options / equity
- Travel allowance / food allowance
In particular it’s very hard to figure out what stock options are worth, if anything. The best advice I’ve read is that your stock options aren’t worth considering in any compensation comparison unless you are a founder.
This wiki page does a very good job of explaining how any employee can figure out what their pre-IPO equity is worth. What’s most important is to figure out the percentage of total options and how much funding the options are worth. Don’t forget to include capital gains tax (eg: 40%) when figuring out how much those options are worth.
When will the startup be profitable? How much money has been invested in the company? How much more funding is needed until the startup can stand on its own legs? The more you can find out about this, the better off you’ll be, because you can’t accurately evaluate your monetary compensation and the future of the company without it.
At my previous job I was making more money than I am now, plus there was an average of a 5-8% raise per year. Startups often have no salary increases until they are profitable, or at least have revenue on the books. When you look at the roadmap to profitability you need to factor this in so you can evaluate if the potential payoff if the startup does well comes close to matching the potential revenue lost working at another company.
Most startups fail. The most likely outcome of working at a startup is showing up to work one day and finding the doors locked. There may be no compensation package for the newly unemployed workers until they land another job. Waiting for a golden handshake from downsizing is a worse idea than acting on an opportunity that has presented itself at a different company.
Startups cut corners. You may not have the best tools available to get the job done. You are always squeezed for time and money, which means quality suffers. Poor quality can throw a monkey wrench into schedules, forcing crunch time in order to meet the delivery dates. This technical debt is just like any other debt in that it requires interest payments and you’ll have to pay it off eventually — although project managers often ignore it completely. Steve McConnell covers technical debt in more detail.
Signs of Success
Success should happen early. If things are always running smoothly then the work environment will be enriching and enjoyable. If things never work properly the first time then it can create a big cloud of doom that hangs over the head of everyone in the company and curses the new work being done.
How are employees reinforced for good work? In a startup, it usually won’t be monetary but that’s ok because one of the best rewards is the time to work on pet projects. Interesting work is its own reward.
Monetary compensation might pay off the bills, but it won’t make you feel as satisfied as a job well done. What makes me happiest is learning/improving new skills and knowing that I’ve done a good job. Having to constantly return to the same project that never works properly is one of the most soul-sucking experiences I’ve ever had. It’s like a bad relationship that drags on and on. You’re trying to make things work, but there’s always something new that comes up and drags you back into old issues that you thought were worked out a long time ago.
“Will I enjoy the work?” is the one of the most important criteria for evaluating a job change, because passion can’t be faked and it’s the only way a job will enrich the rest of your life.
Jeff hit the nail so squarely on the head when he said that the most accurate predictor of job satisfaction and success is if you like the people you work with. No matter what the problem is, it’s a people problem and if you don’t enjoy working with your coworkers then you’ll never enjoy your job.
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I came to a rather startling discovery in the past month: magazines are just blogs with the added luxury of being able to read them while on the toilet or in the bathtub (but hopefully not both).
I picked up the October issue of Inc. magazine because Joel Spolsky of Joel On Software has joined the magazine. I’m a Joel fan-boy. Internet Duct Tape was inspired by Joel on Software. Here are some random thoughts from spending a rainy Saturday flipping through the pages. Can this possibly be entertaining or of value to my readers? I have no idea.
I’m going to give each article a +1 or a -1 based on whether or not I found it interesting and discuss it with a short blurb. You can read along with me on the online copy. Follow the bouncing ball.
-1 Editor’s Letter, Contibutors, and Reader Mail: I can’t help but think this stuff should be at the end of a magazine instead of at the front. Below the fold, if you will. Give the reader the most useful tidbits first instead of burying it in the middle.
-1 People Who Were Inspired by Ayn Rand’s Atlas Shrugged: It didn’t sell me that the only entrepreneur’s name I recognized was the one from Doubleclick. Instead of a biographical tidbit about Ayn Rand, tell me what the book was about! How did they miss that there is a 2008 movie with Angelina Jolie in the works? Is Wikipedia the new Coles Notes? Where was the tie-in that Atlas Shrugged inspired the current hit Xbox 360 game Bioshock?
I’m getting the feeling that I’m not the core audience for this magazine.
+1 Netflix vs Blockbuster: Blockbuster proves the adage that startups are R&D for bigger companies by one upping Netflix’s business model. Bad advice from other entrepreneurs follows.
- “Netflix should court CDs” – iTunes and digital downloads are already trailblazing the future of this industry, going up against iTunes on their existing strengths isn’t going to help Netflix. Isn’t CD by mail subscription also going up against Columbia House?
- “Focus on being #1 service without lowering price” – Good, if obvious, advice.
- “Focus on obscure films” – Every company needs to have a passionate minority at their core if they hope to have any success. This would have been good advice if Netflix was starting at a grassroots level, but they already have that core smaller audience from years ago.
- “Hookup with a cable company” – I completely agree that they need to move to digital downloads. Always build the product that will kill your current product. But getting in bed with CableCos is courting the devil.
+1 Investor’s Guide to Inc 500: Bug VCs with the previous issue’s top 500 startups list. Bonus points for mentioning Massage Envy masseuse franchises that are a lawsuit waiting to happen. Bill Me Later is my pick from the list. They act as a proxy between your credit card info and other companies for people who are afraid of buying on the Internet. I also like Vocera who do star trek style voice communicators for hospitals.
+1 Even CEOs Have to Apologize for Screwing Over Workers: I appreciate the message, but felt there was a bit too much emphasis on assigning blame for why the bad decisions happened. Kudos for stepping up to the plate, admitting mistakes, and keeping the team in the loop.
+1 Applying Maslow’s Hierarchy of Needs to Companies: Someone’s written a book about the idea that companies need to fulfill more of an employee’s needs than just the paycheck. Interesting: customers are promiscuous meaning that even if they’re perfectly satisfied with service they might still switch to a competitor they’re also perfectly satisfied with. Article is fluffy, wonder if the book goes any deeper? No mention of creating fulfilling work, just increasing employees self-worth and attitudes towards themselves.
Is this like that bogus psychology from the 80s that encouraged self-confidence without merit and created a generation of self-entitled people who don’t understand why life isn’t handing them the success they deserve?
-1 Estate Planning: I pay someone to pay attention to this stuff for me. That might be stupid on my part.
+1 Is My Social Network Startup Worth Investing In? 55 Alive: Investors get to rip into a young startup. Startup wants $250k but most investors are advicing between $1 to $20 million. I love the VC who points out that common interest ties people together, not demographics like age group. We had a conversation about this last night at a dinner party discussing the people you knew in elementary school and high school that you reconnect with but it goes no where — because where you went to school is no indication of common interests. Same guy tells them to generate their own ad revenue without investors.
More good advice that they need to focus on building up local features. So true, what makes social networking sites work is if they become a communication tool for an existing friends group.
+1 Internet Video Beyond YouTube: Some good discussion on interactive webcasts, livecasting, and promotional videos. HelloWorld is officially my favorite company name ever. I’m so surprised there was no mention of Will It Blend or CommonCraft.
+1 Web Polls: Not enough information on the individual web polling companies, but the use cases of how businesses are incorporating them are phenomenal. Conclusion: don’t manage statistics gathering by hand, but be careful who you go with because it can go from $1,000 to $10,000s of dollars.
+1 Using Marketing to Improve Old Business: One man’s guerilla campaign to revitalize the NY Metropolitan Opera. My favorite example of traditional businesses embracing new media is the Brooklyn Museum’s Flickr page. I liked the idea of giving free tickets to the last dress rehearsal to create buzz and simulcasting the operas onto outside monitors.
+1 Update: An older story of a company in trouble and the advice the Inc. experts gave is updated with the results. Great proof that the magazine advice works.
+1 Questions and Answers: Inc. recommended a survey business support myspace, but ignore Second Life. Unfortunately, no mention of SL’s flying penii. They also give the sage advice that the average person sees 3,000 ads a day so advertisers have to work that much harder to be in the 1% of ads that people notice. Good advice with “do you even know who your audience is?” Huge bonus points for mentioning Made to Stick, one of the best books I’ve ever read.
How to maintain corporate culture: build stories around your brand, have bigger goals than “making money” and fire people who don’t fit with the culture you want to have.
+1 Money Management for Entrepreneurs: Good tip that you should have two financial advisors, one primary and one secondary so that if one doesn’t work out then you can transfer to the other while you look for a replacement.
0 Joel Builds a Shipping System: Reprint from Joel on Software.
-1 Entrepreneurship is Passion: all fluff, no content.
-1 Inc. Gear: hard to believe that this isn’t product placement.
+1 Pandora Story: Cover story about the Pandora music recommendation service. Turning your customers into fans will help you overcome all kinds of roadblocks. But what about your international customers?
+1 The Way I Work: The best interview question is to find out how someone copes with stress. Article focuses on stress management and using external creativity to unwind — maintaining relationships with your support network is more important than the job.
–1 Corporate Retreat: The usual on breaking down people to build a team.
+1 How I Did It: Success story in billboard advertising. Become an expert and buy advertising space that people aren’t using.
-1 Inc. Classifieds: Spam spam spam. Penis enlargement, asian brides, and buy my e-book. It’s like they have blog comments printed right in the magazine.
Overall Score: +7
After an underwhelming start I found some good content in the middle of Inc. Magazine and I’d read it again. Every blog is a self-run small business and every blogger is an entrepreneur, so it isn’t that surprising that I liked the magazine.
It looks like Cambrian House is doing pretty well with their concept of Crowded-source Software. They already have several products developed.
One of the products is an online computer to computer fighting game called Gwabs. I’m impressed with how rapidly they go from idea to development. I decided to spend the $9.95 and support them (hey, they gave me an X-Box and a t-shirt). The pre-order deal looks pretty good, as it gives you an unlimited free play account, plus a pimp cane. Talk about knowing your demographic.
After the break, a trailer of the game in action.