I recently met four people who are considering going to work for young startups. Their declared goal is the big money. They want the generous options package reserved for the first people to join a company, in the hope that it will make an exit or an IPO.
What the four have in common is that not one of them is a technology professional. All of them work in the ancillary professions (marketing, finance, human resources) in middle management positions in multinational companies, medium size and large, some of them public. They are aged 37-42, with children, and they are the main breadwinners in the family, including the two women in the group.
The statistics are known
All four know the statistics, and are aware of the chances of an early-stage startup eventually being sold or floated. They know that their long experience in technology companies is no guarantee that they will succeed in selecting a startup with high chances of success, and they are fairly clear that they will have to go through 2-3 startups (if not more) before they make a killing. It’s important to them to set out on this journey now, for fear that at a more advanced age they will become less attractive to young companies.
Despite the downturn in the tech industry, from time to time they receive offers from startup companies at various stages of maturity, thanks to high brand value, a result of impressive employment records and good education. So the question arises, whether to leave a stable job and go out into the wilderness of uncertainty. Financial means are of course a decisive variable, and three of them do have resources. For the purposes of the discussion, we’ll assume that all four can afford to set out on the adventure.
With the financial element discounted, the dilemma seems easier. Even if the startup collapses, they can absorb a few months of unemployment, till they find the next one. And what if the plan fails and the wished-for exit doesn’t come along? Never mind. At worst, they’ll about face, and go back to a stable job in an established company.
The big difference
Really? This is exactly where we have to think about the distinction between technology professionals and those in ancillary jobs in technology companies. The technology people, headed by experienced developers who are graduates of leading universities, and others in technology roles for which there is a shortage of high-quality, experienced candidates, can do whatever they like. They will continue to enjoy high brand value, regardless of the path they have taken and switches between different kinds of companies, big or small, local or global, successful or otherwise. It’s enough that they have the right education and the required technological experience for a specific role and they’ll find a good, well-paying job pretty easily.
By contrast, those in the ancillary professions will not succeed in maintaining their brand value over time. This is because brand value mainly depends on the last job, or, more precisely, on the image of the last employer, and when that is a failed startup, brand value suffers accordingly.
Does that sound like an exaggeration? Ask football fans, who will explain that a player is worth his last game. He could be the highest goalscorer in the league, but if in the last game he missed an open goal and the team lost, the fans will turn on him. Now imagine that he did that in two or three games on the run.
Failed entrepreneurs pay a higher price
The same applies to a career. After two failed startups, or, God forbid, three, that’s the fate that awaits workers and managers with high brand value. They’ll shred it to bits, which will considerably reduce their chances of receiving an offer from a decent startup, not to mention of returning to an established multinational. The result will be compromise on a job that isn’t good enough, which is very hard for people who are too young and too talented, with at least another decade and a half ahead of them in the labor market. Of course, none of the four has taken this scenario into account.
It seems to me that there is no need to explain what happens to the brand value of young entrepreneurs who from the outset go from one collapsed venture to another in their quest for the big money, and to their chances of finding adequate work after years of failures.
Is the conclusion that the big money strategy should be rejected out of hand? It’s not my place to tell other people what their priorities should be. I only warmly recommend that they should not ignore the statistics and the range of possible outcomes. Good luck, and remember - a career is the opposite of what you thought.
The writer is an employment market expert.
Published by Globes, Israel business news - en.globes.co.il - on July 6, 2023.
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