10 Reasons Why You Shouldn't Join a Startup Beyond the glitz and hype, a new businesses may present a certain gritty reality. Steer clear if you're not prepared.
By John Rampton Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
For the last several years the startup machine has been cranking out new ventures in a wide range of fields, from software to whaling. No matter where you look, an awesome new startup seems to be popping up. And you want to be in on the action.
As luck would have it, you notice that a startup is hiring and you're more than qualified for the gig. You know going in that it's going to be tough and challenging, but you think the potential that lies ahead is just too good to pass up. It's almost a no-brainer. You're considering joining an exciting startup that will change your professional and personal life forever.
But should you really join a startup? While it is true that the position may be full of potential, more likely than not you've been sold a series of myths. So before doing drastic, check out the following 10 reasons why you might not want to join a startup.
Related: The Pros and Cons of Working for Equity
1. You might not get paid.
Some startup employees work with the understanding that they are sacrificing a decent salary in return for receiving equity in the business. They'll just work their tail off for a couple of years and then reap the benefits when the startup takes off.
But this assumption has two major holes: First, the startup may never succeed. If that's the case, the equity in a failed or failing business really isn't worth much. Second, startups are notorious for being frugal once they're being funded. That money has to last for who know how long.
So if you take a position at a startup with the assumption that eventually the owners will feel favorably disposed to handing you a beefy salary or pay raise, you're sadly mistaken.
Indeed you may want to second-guess your inclination to take that startup post if you're content with your current position or have an opportunity to join a better-paying company.
Related: Want to Work at a Startup? Here Is How.
2. You may not land a role on the executive team.
A reason some individuals gravitate toward startups is the idea that it might be easier to eventually land an executive position. But how many startups have high-level executives who are not the founders?
And the promise of an executive promotion down the road could be more of a ploy to compensate for low pay. You may end up not making a lot but have an awesome title. Such titles can also be offered during the initial recruitment. Since the startup owners are being careful with their money, the titles are used as bargaining chips.
3. Startups typically fail.
When you join a startup, there's a very real chance that it's going to fail. That's not being harsh. That's just the nature of the beast, despite what you may have been told.
In 2012 the Wall Street Journal reported that three out of four startups fail, based on research, conducted from 2004 to 2010, examining 2,000 companies that had received at least $1 million in funding.
4. You're going to work really hard.
You obviously intend to work really hard at any job you've lined up, but there's something completely different about startups. You might work like a maniac for an excessive amount of hours each week because the startup is in a race to beat the clock, trying to create a product or service and establish a market before the money runs out.
If you enjoy that kind of pressure, then go for it. (Most people want to keep their heart rate and blood pressure at healthy levels.) If you're willing to work more than 12 hours a day for little to no pay, then the startup may just be your thing.
5. Your list of responsibilities may be lengthy.
On top of the stress, long hours and low pay, you will have a lot of duties. You may be asked to do multiple jobs. Some people enjoy wearing multiple hats. Others like to know exactly what they have to do during the workweek.
But, there's a flip side to all of this. Startup jobs also include the same mind-numbing responsibilities that the big companies have. So, if you were expecting to try your hand at certain specific exciting tasks, you may be severely disappointed.
Related: Why So Many Startups Never Reach Their Second Funding Round
6. Everything can change quickly.
You may think that if things go south, you'll have plenty of notice. But that isn't how startups function.
What if the venture capitalists pull their funding? What if the competition demolishes your business? What if Google enters the space? Or what if another recession hits? Numerous factors can determine the success or failure of a startup. And when the circumstances change, everything changes. One day you're working for a promising startup and the next you are let go.
7. It's chaotic.
Steve Blank, a professor at Stanford and founder of several companies, asks those interested in joining a startup, "How comfortable are you with chaos?" If you're joining a small startup, one with less than 10 employees, expect chaos every day you arrive to work. I've worked at several startups and it can be very frustrating some days.
If you're not one who enjoys having to be on your toes every day, a startup is definitely not for you.
Related: Ever Had a Boss Who Seemingly Thrived on Endless Chaos?
8. You'll still have a boss (or bosses).
One of the most enticing things about jumping on board a startup is sense that it means that you're no longer "working for the man."
But even startups have managers, CEOs and venture capitalists. If you're lucky enough to have a great manager, that's not a bad thing. This person will pull the team together and get things done.
And a startup funded by a venture capital firm is expected to deliver results on a deadline that the it probably set. It's the firm's money after all. So, don't be shocked if the office dynamics change if the startup fails to produce results or there's been a personality clash between the leaders of the startup and the venture capital firm.
9. You have to build a company.
Say you're an engineer or a developer who has gained notice from a startup. Instead of accepting the job and going back to work in a specified field, you have to build a company. That may sound like an intriguing challenge, but it's not the job you signed up for. As entrepreneur David Bluhm notes, "All start-up people need to be "business builders' versus single contributors and view building the processes around their job as a primary role of the job itself."
10. You may have to pay for expenses.
orget getting wined and dined by a startup. The young company probably doesn't have the money. So who will pay for the expenses when it comes time to impress the media, investors and clients? Yep. This could be coming out of your own pocket if wining and dining is a part of your job description.
Everything from office supplies to cleaning services may have to be provided by employees because of a lack of cash flow. Though you could live without a cleaning service, will anyone really want to step into that workplace after a month or so?
A footnote: I happen to love working as an advisor and investor for the startup SEO Engine and wouldn't trade this gig for the world. Every day is so hard and yet different from any other. (Some days I'm not sure if my credit card will even be able to pay for lunch.) I continue to work on this startup's team because despite all the drawbacks, the rewards far outweigh the risks. I wish you the best of luck in making your decision.
This Entrepreneur.com favorite article was originally posted June 3, 2014.
