With a huge number of founders in the valley, make sure you explore your options
Too often, I see people go, “I want to start my own company,” and then months later, nothing happens. For those who take the leap, the majority either never scales into anything significant or eventually fails.
After all, 90% of new startups fail for various reasons, from product-market fit, team or cash flow problems.
The truth is, being an entrepreneur is tough work and isn’t as lavish as the media paints it out to be.
Now I am not saying it’s not rewarding or something you shouldn’t pursue. The least you get is experience within the industry, especially building something of your own. However, for many who want to work in the startup industry, I want to paint a different picture.
Instead of needing to take the reins and co-found one yourself, there is an equal amount to learn by joining the team of one that has already launched and possibly even raised a round or two.
So why is joining a startup better than launching your own? Here are some points to consider.
Learn from experienced founders
If you’re inexperienced, there is a tonne to learn off other founders, especially ones that might have more experience within the industry or were ex-founders previously.
According to data collected by Crunchbase, the more experience a founder has, the better the chance the startup will perform.
With this data, founder and founding teams can be correlated with success by experience. If we take a look at a real-world example, even by looking at Medium’s success, Ev Williams had previously started Blogger and Twitter before he built Medium. He most likely learned from those experiences and then reinforced them into his methodology when building out the wildly successful blogging website (that you’re reading on!).
If you’re someone who wants to start their own startup but might not have the experience or confidence to boot, working for someone else at an early-stage startup could be the middle ground of what you’re looking for.
You still get early-stage equity and the potential to learn a lot but with the backing of a more experienced founder and, of course, less risk.
Less commitment of capital and no/low salary
Although starting a business in today’s day of age is a lot easier than decades ago, it still requires a huge heap of legal, admin, stress, and finance matters to worry about on top of their business.
Worse, you’re most likely going to be sitting on $0 or a very low salary for at least a few years, especially if you’re a founder.
If you’re interested in launching a startup and you can’t handle all of these shoved into one ball and thrown at you constantly, you might want to reconsider launching one.
If you’re not ready mentally to handle everything, joining a startup, even if it’s an early stage one, makes your journey much easier. You can still wear many hats and progress quickly in the company (and grab a fair share of equity) without the added stress of managing all the back-end logistics and sitting at no or low salaries.
Of course, this doesn’t mean it’s an easy journey or a relaxing one, it’s just a lot less stressful.
You could join a startup that has potentially found product-market fit or close to
One of the key reasons for a startup’s failure is its inability to find proper product-market fit. After all, this is the golden ticket to a startup’s success and growth.
A startup that has found product-market fit will have taken a lot of risk out of failing early on.
If a startup can grow successfully, it can always raise more money, so finding product market early on is huge.
According to the statistics, almost half of startups fail due to the lack of product-market fit. If you’re not confident in your own startup, it might be more suitable to join one that has found it.
Experienced founders know how to get started and handle potential problems
When I was interviewing at a position at a startup (Series B), I had the chance to speak to the CEO who had sold his previous startup to a larger corporation.
One of the things he brought up to me was how he wanted to do things differently after being screwed over by a VC firm's conditions set around his cap table for his first startup. It basically meant his employees received very little of the acquisition capital since their equity was incredibly diluted.
When he started his new company, he began by allocating his own money into the startup and established all the groundwork so he could set up how the equity and rules will be distributed.
This is an advantage of working for someone who has seen it and done it before. They have no issue with setting up the foundation, raising money, and know-how to get the wheel moving. When Drift CEO and co-founder David Cancel started his 5th startup, he knew exactly what to do.
“When I started my fifth company I knew exactly how I wanted to build the team. So, on day one I hired a head of recruiting to get things off to a strong start. I also knew market adoption would be critical to fundraising so (we) focused on growth very early on — before we even had a product!” — David Cancel, CEO and co-founder, Drift
They also know how to handle potential problems that a first-time founder might not know how to deal with.
Final Note
Although there is nothing like launching your own startup, there are other ways to think and approach the situation to help set you up for future success or get your foot into the industry.
Of course, every person has a different situation, and it’s important to have an open mind when thinking about working within the startup environment.
“I joined Drift in part because I wanted to learn from the experience of the co-founders. They’ve seen it before so they anticipate issues, they know when (and how) to hire experts to level up the team, and they know what’s “normal” for a hypergrowth company. It’s the best of both worlds: you get the rollercoaster startup experience with some of the more measured leadership and strategic characteristics of a bigger company.” — Maggie Crowley, Product Manager, Drift
With so many recently wanting to be their own entrepreneur, I instead wanted to showcase the potential of working for another entrepreneur who has had more success. You can always tailor your risk appetite by either joining one that might be in their seed rounds or a later stage.
In my opinion, there are many advantages to joining a startup rather than launching your own that are often overlooked, and hopefully, this summarizes it well enough for you.