Are you bribed to work or is your work a bribe?
For the past 12 years of being involved with Start Ups, I’ve always been quizzed about compensation questions, dilemmas, challenges and upsets that prevail in entrepreneurial set ups. This is my attempt to put my words where my money is.
Are you Bribed to work?
Sure you are, if you in a typical ‘corporate’ Fortune 500 Job!
Characteristics:
- It has a predictable growth curve already set for you. From executive to manager to director to president (of god knows what) over a finite set of years. I vividly remember a meeting at a Fortune 500 Corp’s office a few years ago when seven gentlemen gave their cards and all of them read ‘President’. When I looked at them quizzically, one of them sheepishly smiled and said ‘Alok, even the office boy here is a President’. So, you can be the Junior Prime Minister of a Company, but your moronic boss – ‘the’ Prime Minister will still treat you like an office boy to run the errands.
- It has more politicians than all the members combined of every political party in India. You know what happens when so many politicians assemble together? You have to be mentally numb to survive in that set up.
- Colossal time dedicated to planning, budgeting, forecasting and ‘strategizing’. You have to be a Monk to survive the insane meetings that are meaningless and never-ending.
- You have to do what the system needs you to. It’s built that way. Like an axle that has to drive the wheel. You can never become the wheel and you definitely can’t chuck the job of being an axle. The driver(s) will not allow it.
To endure all this, you need a hefty bribe (pay package) to stay in the job. And that is the sweet numbing pill you swallow each month. Each year, the bribe gets sweeter as does the migraine.
Now, is your work your bribe?
This is the case in a typical start up that survives on pure innovation, energy and entrepreneurial zeal!
You enjoy:
- A massive learning curve from day one. From tech to ops to finance, you learn it all. If you stick around long in a start up, you will be stunned at how many multi disciplinary job functions you will have mastered. I remember one particular day when I opened my contests2win.com office (in a ramshackle room near metro cinema), swept the floor, made some coffee, uploaded my content via FTP, drove to the courier to deliver some prizes and then went and met the CEO of ICICI Ventures – all in the breadth of a few hours. In contests2win.com, we hired a HR professional who enthusiastically put together the processes, etc. in order. I still remember the day when he messaged me via IM at 11 am saying ‘Alok, I don’t have any work, what do I do’? One thing led to another, he got enamored by ‘Sales’ and the next thing we knew, he was in Shanghai and Beijing, selling Mobile2win offerings to clients there!! Try explaining this ‘career plan’ to a silver fox in an MNC organization.
- There is massive OWNERSHIP from day one. So you understand the difference between ‘following’ and ‘leading’. You typically make decisions, not implement them! You can steer the ship towards the ocean or onto the icebergs.
- Mentally you are trained like a ninja. Ready to take on any surprise and turn it into a victory. Fighting till the end. That training at a very formative stage is very important in long-term career success. I meet lots of ‘Corporate Suits’ who have no edge of being able to take hits and downsides.
Working up in a start up is very enriching and heady experience and some folks are happy to accept this job as ’bribe’ rather than fat cash compensation.
2win Team – Their work is their bribe!
Also, from a financial perspective, consider this:
| Description | Fortune 500 Job In lacs | Start Up Job In lacs |
| Middle Manager Salary Year 1 | 15 | 10 |
| Year 2 | 20 | 12 |
| Year 3 | 24 | 15 |
| Year 4 | 28 | 18 |
| Year 5 | 32 | 21 |
| Total moneys earned | 119 lacs | 76 lacs |
| Tax (1/3rd) | 40 lacs | 25 lacs |
| Net take Home | 79 | 50 lacs |
| Shares in Company | 0 % | 2% |
| Exit of Company in 5 years at a minimum sale value of 10mn US$ | 50 crores | |
| Sale value of Shares | 0 | 100 lacs |
| Tax (long term capital gain) | 0 | 0 |
| NET EARNINGS | 79 lacs | 150 lacs |
Interestingly, even financially you could become richer working for a start up than a straitjacketed tight MNC job. Sure, one can argue that the exit may never happen or the equity grant may not be 2%, blah blue blee. Even so, the experience of 5 years in a start up will be so enriching, it will be worth the salary sacrificed and will be easily recoupable in the years going forward.
My 2 paise – Work in a start up early in your life, at least for a decade gaining first hand experience, and then start up your own venture. And sure, as sweet revenge, you can hire the suited goons from the local MNC anytime you want.
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Your every blog makes me think more and more, I am your fan now BUT when I think of taking the first step, older strings and experience makes me fall back.
Thanks for aspiring words, it makes my day…
Thank you Alok for the beautiful insights into a startup and the nature of work in a startup. Its really challenging and interesting too. Now I can suggest my friends with more empirical data to join a startup rather than an MNC. But I am not comfortable with your suggestion to work for a startup for atleast a decade before one starts up on one’s own. I feel ten very productive young years should not be wasted pursuing someone else’s dream. What do you feel?
Nice blog Alok…once again
However i believe that being in startup is not always rewarding. There is lack of job security, salary hike does not happens so frequently and employees do not always get to lead the activities…as most entrepreneurs are themselves involved in all activities of a startup and are scared to give so much leeway to their employees.
Bigger companies are slow moving , but there is a reason behind it . Its simply because big businesses have bigger risks and more stakeholders to be answered to. Hence excessive planning needs to be done.
Also …..by working in bigger cos. one gets to learn a lot about processes which are seldom given importance in a startup ( at least in first few years when things are ad hoc).
So…just to conclude..
I strongly believe that one should keep switching between startups and big cos. and learn the best from both the worlds.
My two cents here – working for a startup is indeed an enriching experience. Just be careful in joining one. Unless you believe in the idea and the entrepreneur behind it, stay away. The startup and you have to be a mutual fit. Any startup is a dream which few people choose to live in. If you have made your choice to be a part of one, welcome to Disneyland! Its fun.
Good luck!
(trying again)
I mostly agree with what you are saying, but I believe there is value in clocking time with some of the large firms (MNCs or otherwise) for the intial part of your career before taking your entrepreneurial plunge.
There is something to be said about the processes, the systems, the organisational structure and the experience of managing teams and sales numbers which does help when you are setting up your own venture.
You also have the benefit of a network of potential clients for your business idea as well as potential partners/ employees you coudl choose from.
——————-
I also wonder if it makes as much economic sense if you are not paid (or don’t pay yourself) as well in the start-up firm and it does not do very well and you are not able to cash out and make your $10 mn in 5 years?
I think the most important thing is to be very honest and brutal with yourself and ask yourself if you want to be an entrepreneur because that’s who you truly are before you take the plunge. And if you have already taken the plunge then you should be able to ask yourself the same questions and have the humility to pull yourself out!
fantastic points!
Hi! This is so correct about startups. Good points. Thanks!
Nice post, Alok! The earnings comparison is amusing. There can be debates on the numbers, but that will provoke thoughts, for sure. The best part of your posts, I think, is your real-life experiences. Thanks for sharing!
Loved this response on Pluggd.in:
Sachin Bhatevara said: On September 11, 2010
Mark Suster in his blog bothsidesofthetable.com, in my opinion put it best:
Join our company if you think you’ll learn from being here. I think you will.
Join if you think your career will progress because you’ll be given more responsibilities than elsewhere and if you’re good at what you do you can move up quickly. We’re a meritocracy.
Join because you know you’ll be earning less than you could elsewhere at some meaningless job cranking out non-core code, producing Powerpoint slides or shuffling paper. You can always earn more. But join here if you want to grow.
Join because you like the culture. You think you’ll have fun. You’ll consider your colleagues close friends.
Join because in three year’s time when you look at this job and this company on your CV you’ll feel proud and it will be part of how you got where you were going.
Join because as we grow our ability to reward you will grow and your income will grow with our success that you contributed to.
We give out stock options. I hope they’re worth money to you some day. But let them be “icing on the cake.” If they pay off handsomely that’s great. But don’t count on it. Don’t let it be your motivator or your driving decision.
Not because we don’t want them to be valuable, but because we don’t want to create an “options culture” around here. Option cultures are corrosive, create the wrong incentives and attract the wrong sort of people.
Link – http://www.pluggd.in/why-work-for-a-startup-297/
superb advice for Professionals !
How much stock should a senior sw ld engr expect for a 60% salary cut in a small startup just angel funded (not first VC round yet, product not out yet)?
I don’t know what the role is …but should be between 1-3% ( u are sure the cut is 60% and not 40 %)? Also, give me a range of the original salary of the person?
I hired a 1 crore + per annum guy for 36 lacs for a 3% equity share…
Lovely shovely article
the feelings that flow out of ones mind after reading your blog is simply unexplained;
cheers and great job for sharing your prespective and life experiences!!
am a regular reader of ur post;subscribed it already;
Absolutely in agreement.
Having myself started career working for startup where I had opportunity to do everything right from finding the office premise to negotiating & finalizing servers to getting the office running (including doing electrical work myself) to finally also talking to our first customers and doing account management for them. The experience was simply fantabulous.
Today when I work for an MNC, dishing out “strategy” ppts faster than an assembly line machine and participating in debates which go no where but take whole day – I cant help but compare the “WORK” I used to do then. The reason I write Work in caps is that I could see my work reaching a conclusion rather than just being filed into documentation system as version x.x only to be sourced and referenced while working on next ppt. I cannot help recall that for 4 months when we were actually setting up then I worked 18 hours a day 7 days a week and yet not feel tired or exhausted which I feel in current job – surprisingly which I also like fairly (for the company I work and for the portions of task I handle – not necessarily the job). But even post this realization I feel scared to be able to jump back to join a start up.
I remember reading a line somewhere and which I later experienced while being there recently – In silicon valley US, there are so many start ups everywhere, all typically starting out as a garage enterprise – and its a honor & matter of pride to say I work for a garage start up. Sadly, back home here, it is only the big name that counts. Not the work you do but the hysteria of & around the company you work in. I know so many of my engg friends and classmates who joined companies like Infy, TCS, etc right from college to only end up as software testers (that too doing just dummy testing by following pre-written test cases).
Thanks for sharing this article.. could relate with it so well….
Keyur
nice article…assumotions/numbers can be debated though…still agree with the basic premise of your work being the bribe…and would be willing to work for you any day at a less than market salary…let me know if you have any openings!