How to Get Rich at Someone Else's Startup

If you don't know by now that the most common way to get rich is to start your own company, it's time somebody told you. But what if you don't have a great business idea? Or you lack the drive to be your own boss?

You could hitch your wagon to someone else's startup. Of course, it's not that easy.

I know a guy who worked for seven different startups. Some of his former colleagues have cashed in hugely, either at those startups or others. Now they are philanthropists, venture capitalists, and other idlers. Last time I saw him, he was driving a years-old economy car, working at yet another startup, because he'd either quit or been fired from the startups that succeeded, and none of the ones he'd stuck with had made it.

With that experience in mind, how do you figure out which one to join? You can take one of three strategies:

The conventional approach: Do your due diligence as if you were investing in the company -- check out its products, markets, financing, etc. Pitch yourself to the startups that can charm the checkbook off an investment banker and hope they'll be as congenial to employees. If well executed, this strategy increases your chances of an eventual financial windfall. The risk is that by downplaying what it will be like to actually work there, you could wind up in an environment too corrosive to the human spirit for you to hold out until the IPO.

The backwards approach. Look for a good culture fit, where you share the same attitudes as the rest of the team. This strategy emphasizes the idea that people, not products or opportunities or market niches, are what build companies. Look for a team of people as smart as you, but no smarter. This way you'll avoid the over-hypesters. Focus on joining a like-minded team, rather than landing a specific job title. All good advice. The problem with this one is that you're thinking like an employee, when you should be thinking like an employer. If you're not the right employee, you've just decreased everybody's chances of eventually cashing out huge.

The counter-intuitive approach: Find a startup where you won't be too comfortable and don't go to work for an entrepreneur who is too much like you. People who start companies have a tendency to hire those who think like them. But startups need a variety of viewpoints. A diverse portfolio of skills is better than a bunch of people who share similar educational, professional, or technical backgrounds. If you can finish sentences for others on the team, walk away.

Going to work for a startup gives you an opportunity to make a ton of money through equity. It's also an opportunity to work very hard for not much in the way of benefits and salary. To improve the odds that your chosen startup will pay off, sure, do your due diligence. But don't stop there. Think like an employer. And before you go to work for a startup, be sure the startup should be hiring you.

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