10 Reasons Why Startups Suck
Startup companies are a way of life in Silicon Valley, not to mention all the other tech Meccas that have sprung up all over the place like Silicon Alley, Silicon Prairie, Silicon Plateau (India), Silicon Oasis (Dubai), and Silicon Wadi (Israel).
Never mind that biotech, software, cleantech, and Internet dominate venture capital these days while funding for semiconductor (silicon) startups is at a 10-year low. Guess the name's perfunctory.
Regardless of what it's called, as a Silicon Valley consultant and former executive, what I'm about to say amounts to heresy in these parts, especially among entrepreneur types. Still, if you bear with me, you'll find method to the madness, or at least some logic.
Now, don't get me wrong. I've worked for and had good luck with startups during my career. But there's a time and a place for everything. For some, at a certain point in your career, startups are great. But for most, here are:
10 Reasons Why Startups Suck
- Long hours and low pay. In general (all of these are generalizations, of course), startups expect longer hours and offer lower pay than their larger counterparts do.
- Vast majority fail. You can debate the percentage, but it's a true statement, regardless.
- IPOs are few and far between. Liquidity events, i.e. big payoffs, are rare, especially these days.
- Employees lose out in an acquisition. In the majority of startup acquisitions, VCs and founders make out; employees get to keep their jobs.
- Poor benefits. Again, in general, the benefits aren't comparable to bigger companies, especially for senior management or executives.
- Long, long payoff, if any. We can argue how long is long, but again, it's generally a true statement.
- A game for the young. If you're past the midpoint of your career, the question of how many startups doyou have left in you for the odds to work out in your favor looms large.
- Dysfunctional leadership is common. It's not scientific, but based on a large amount of anecdotal data.
- Little or no job security. Obviously, not that you get much in any company these days.
- High frustration level. Granted, the satisfaction level can be high for a while, but that tends to fall flat when the company fails and/or the product never sees the light of day.
- Late stage startup. Okay, it's still a startup, but a very specific type. If you can find a "late stage" startup with decent odds of "making it," that's a great score. The rub, of course, is determining the odds.
- Small-to-mid-sized public company. Especially if you're management or executive level, you can still get a lot of equity (that actually has value) and a big title, while all the negative factors are marginalized.
- Turnaround or struggling public company. Again, the equity has value and a big potential payoff if the turnaround works - considerably better odds than a startup liquidity event.