An Attempt to work at a startup

Hi everyone. This is my first post. A quick introduction about myself. I am Vivek and currently located in Chennai. Aspiring to be an entrepreneur in the days/months/Years to come :) This article is an attempt to understand the process of hiring at a startup. Your comments would help me understand what went on.

To understand the situation, you need to know that I have been trying to work for a startup because I thought it would give me the flexibility to learn how to run one down the line. Having said this, I always knew the kind of challenges and sacrifices that I would have to make if at all I joined a startup. But I am also of the opinion that the passion to work in a startup varies with your association with the group. For instance, if you are the founder, you would be practically working 24×7 and also in your sleep you would probably be working out strategies. The level of commitment would slightly reduce say for a co-founder who came on board a little later and keep going down with a new hire. This is true even more for a company which is performing regular hires (post funding).

Now, having said this (and I am sure many of you would agree/disagree), I was called by one of the founders of a company to work with them. We had various rounds of interviews, tests and lengthy discussions. Coming from a product management/marketing background, I was offered a marketing role in the organization. The company itself was funded by an entity and were in a position to offer stable income to the new recruits.

At the end of these interviews, I was selected and offered the job. However the pay was significantly lower than what I was drawing at my current job. The reasons stated included that I come from a different background and the nature of the job would be entirely different from what I have been doing all these years, that a disparity might be created if they even matched my current pay; let alone exceed it.

My expectations were not high at all. To begin with since I knew the pulse of startups, I was ready to accept an offer which would be below my current CTC and also fore-go other benefits which are offered in a corporate world. I was also prepared to work long hours (startups don’t have any working hours, isn’t it?) including weekends if the situation demanded. But the company simply couldn’t meet my threshold of acceptance and the offer was cancelled as a result.

My questions to fellow entrepreneurs here are:

  • How do you balance the pay packet for a potential employee? Please give two scenarios – (a) You are self funded. (b) You are financially backed by an angel or a VC.
  • Would you consider the prior experience of a candidate from a different domain, or would you simply consider him/her to be a fresher from your company’s perspective?
  • What kind of commitment would you expect from the new hire? What kind of notice periods/bonds would you look at?
  • What are the legal aspects which you would look into before hiring someone? Would you do extensive background check on the candidate or rely on references or just hire him/her for what value they can bring in?
  • Would you have an age criteria to hire? In other words would you believe that a 21 year old could be as valuable as a 40 year old?

Your comments would help me ascertain where I should have my expectations as a potential hire/employer.

19 Responses to “An Attempt to work at a startup”

  1. Chetan says:

    Startups looking to attract potential talent to work on their next big idea, check http://www.workforastartup.in – a definite source to find potential talent for your budding startup.

  2. Hi Pal,
    As an entrepreneur myself, and one with turnover around Rs. 1 Crore , I do think I can also try to answer you from the other side of the table

    a) Age – not a problem. Our Vice President, is 55 yrs. And very very dynamic. We think we are lucky, we have him in midst of us. Answer for you is that whether 21 or 40 or even 55, Spirit matters, not age.
    b) Pay packet = of course, each penny is worth a lot of sweat, blood and pain , which each other existing member of the company is spending for the company(startup) , we cant just throw away money. Answer for you is that SME’s are pricey on money, but give results , get results.
    c) Commitment = yes, bonds= irrelevant, we don’t have time to follow up on the legal bonds, it is more in the “regards in each other eyes”
    d) Background – hardly, it is in the gut feeling — whether this man is a profit earner, or not

    Sangeet Gupta
    MLG Infotech Pvt Ltd – Finsys ERP company
    Skg.sangeet@gmail.com

  3. Gaurav says:

    Vivek,

    IMO the “package” for a startup is not just the money you get. It includes chances of success, what you’ll learn, what contacts you’ll establish, etc.

    “I saw no visible direction to the financial growth or equity or both” – All this is money (which everyone likes to have). However, how close do you think you will be to start your own startup after 1-2 years of working in that startup? We generally don’t consider gain of knowledge, experience, contacts, etc. as a measure of growth.

    If I really wanted to join a startup (100 KM driving) and knew that they can pay me no more than X amount of money, I’d bargain for things like Work from home/remote location 2-3 days a week. I don’t know if that is possible for your position/company, but it certainly is helpful.

    All the best!

  4. @Raxit

    good feedback about the various stages a startup will tend to operate on. I gather from your comment that an individual has the right to get more salary than what his previous job had to offer. I have to also add one thought here that – sometimes you CAN actually hire someone even though their domain experience is not significant. One of my managers always used to tell – “I would rather hire someone who has the willingness to learn and perform rather than a domain expert would has no passion to perform”.

    I also agree that many startups only hire freshers as they can be moulded and trained easily and they do not carry any lag from their previous companies.

    Experienced hires are primarily for networking – again rightly said. But there exists a small portion of people who can actually multitask and also manage the team of freshers effectively leaving the core team to focus on business development.

    @rajesh

    I read through many a links like that including a write up by Guy Kawasaki about the questions one should raise before joining a startup. Most of these articles (atleast from my perspective) are focussed on sillicon valley based companies (american). Indian guys do not have the maturity to discuss details which they percieve to be confidential.

    @SK

    I would fall into the first statement of yours – I didnt join because of the low pay. Having said this, some of them would probably take a plunge if they have some savings or close to zero financial commitments.

    I also agree with your “change in function” argument. but the reward should be predefined. In my case I had asked if I would be eligible for a raise after a pre-defined period of time. There was no clear answer to this. In other words I was ok to start low on pay only to get rewarded (pay hiked) after a period of time.

    By “sacrifice” i was referring to finances and social life. I think we have to be mature enough to delink the term “work” and “personal life”. I probably need to travel 100 kilometeres a day to get to work and back. That is a sacrifice on my personal lifestyle but this does not necessarily mean that I dont/wont enjoy my work !

    @ shashank

    Most people including the guy who tried to hire me said – if you are looking at getting rich by working in a startup its not the best of reasons to join. Primarily because offers are lower and also the risk that the company wont be acquired/hit the IPO is high.

    I would say the only reason why someone would join a startup would be for the challenge, learning curve, to express creativity and enjoy responsibility.

    @ chetan

    Very true – the freshers make the most of the training and get the facts on the CV and move on to high paying corporate jobs where they can easily convince the panel that they are equal to atleast 5 employees.

    What we all need to understand is how to curb the attrition. The attrition hits the startups the hardest. We just wont have resources to keep hiring and keep training people. Hence the post you know !

    The guy (say me) has no problem to join as a fresher. The learning is awesome and so is the environment. But solely from a long term perspective, I felt that taking a hit in my pay was not worth it. I wanted to work towards my startup in mind where I would need to save some capital.

    Well companies sometimes do call up references in the name of background check. In my case with 6 years of work ex – I was asked to produce my HSC, SSLC and degree certificates and all my salary details. This was apart from reference calls!

    @ saurabh

    Yes – VC backed companies have a lot of fund. I am not saying that this should be the reason to hire someone.But atleast these companies should be able to use their funds judicioulsy.

    Your answer to the second question is spot on.

    @ asutosh

    I agree that you can learn a lot by working in a startup which could fuel your venture down the line. In this case, the person who wanted to hire me was telling me that he had pumped a lot of his money into the company before they got funded. Now, for me to be able to emulate this (as everyone knows funding is tough to get asap), I would need some savings of my own. I realized that working in a startup is not going to get me that.

    Your lines of hiring through reference is really spot on. Many people have missed quoting this.

    @ vyaas

    20% more in CTC seems lucrative for a startup. Your justification is also reasonable. Most people cant stomach risks and responsibilities at the same time when they are drawing lesser pay.

    I am surprised why you wont take freshers. Eager to know why not.

    You are lucky not to have attrition. Make sure you treat your team well always !

    I would be keen to know if you did some kind of profiling tests before hiring someone.

    your answers surely helped vyaas.

    @ deepak

    Interesting observation. You have your employees market salary and some (non critical) equity too. That would be a sure shot attraction for talent into your company. i wonder if all people have the option of giving equity. With the exception of freshers, i think experienced people would be happy to get some equity. It would give them some sense of belonging in the company. Freshers can actually be rewarded for performance by disbursal of equity. my thoughts.

    Your view on domains is really interesting too. I kind of believe in that. With the exception of coding jobs – I believe that hiring a person with a strong attitude, aptitude and good EQ is the best thing to do.

    @ Ari

    I am not disappointed that I didnt not get hired. On the contrary, I was given an appointment letter. The pay package mentioned on the letter was also an agreed amount. the only reason I did not join was that I saw no visible direction to the financial growth or equity or both.

    the article is not exactly “why this happened to me” but more on how things can happen in the entreprenerial world.

    The quote of yours is very inspiring. Time to convince some people :)

    @ krish

    The first para is exactly my image in the mirror. COuldnt have said it in a better way than you my man.

    Just one note krish – I didnt drool over ESOPS at all. and as for the trade off is concerned, I have no doubt that the startup is the best place to work in. Provided some personal wishes come true. (on a case by case basis).

    @ indus

    I know i sound contrary when i said i want to work in a startup AND get paid well too. But everyone has some constraints in life and I am in that list too. But if you ask me to weigh my passion – it is 100% towards a startup.

    The questions you raised are little difficult for any person to answer in my opinion.

    To answer your questions putting myself in the shoes of an employer , here goes:

    - Yes
    - Yes
    - Not really
    - You would be seen at par with the founding team i.e. you would be given greater responsibility with high risks but with bigger rewards. The salary part though is something which needs to be worked out on a case by case basis.

    I am looking forward to get a proper synonym from you for “job” ;)

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