Setting up for overnight success
Equity grows with character
Firstly, don’t listen to me because I have not tasted any success in a startup. Although it has been a decade of working in small companies and closely following startups, I am writing this from my experience in building two ramen profitable businesses — HelloMeets and Inkredo. I would listen to this suggestion if I were in a dilemma to continue working in a startup.
I was excited in gloomy times of 2008
I was extremely excited in the last quarter of 2008 when global giants were going through bankruptcy and many developed economies were again facing a crash after it had just begun to recover from 9/11 crisis. I had just quit, once considered safest private job with Tatas, and joined a fledgling company called Stratanalysis, as one of its earliest team members.
Little did I know what was ahead. The first thing that got me excited is the opportunity — if this bet worked I won’t ever have to climb the corporate ladder! Secondly, an opportunity to work closer to the management of the company who were from coveted backgrounds — talk of their pedigree or experience and none would question whether the company was set up for success! There were not many who wanted to work in a startup in 2008 and despite that I was rejected here without an interview! Why? I had no relevant experience! Then how did I get the job? I requested them to interview and then reject. Thanks to the open-mindedness of the management, I made my way through it (That’s a story for another day).
Prior to this, I had only one year of experience as a “developer” at the IT company mentioned earlier, I never realised that it is one of the hardest parts to navigate at the beginning of a career. Never did I know that one needs to evaluate a company, especially a startup, before joining one because those were times when banking & consulting jobs were absorbing the top talent. Nor there was an ecosystem or a network to lean upon that could give me a direction. (I was lucky to meet Vishal Chandra then!). I had one clarity that I never wanted to work in a defined environment where my growth is dependent on the count of years of experience. This is what I love about startups — they are merit-based rather than seniority-based.
I understood that if the startup grew, I would get rich and I had nothing to lose because I was ready to experiment. A startup can have an exponential impact on one’s career, so much that it could leave you jobless in those days while you had a possibility to enjoy a lifestyle without worrying about your pay-check. This is not only an outcome of quickly rising through the ranks but also an outcome of owning substantial equity in a company where you have worked with your heart and soul.
“If you’re not getting promoted up through the ranks, it gets a lot harder to catch up later in life. It’s good to be in a smaller company early because…there’s less of an infrastructure to prevent early promotion.” — Naval Ravikant
Step 1: Evaluate your next step
Evaluating whether a company is interested in your success is very simple — is it offering equity? Don’t work in a startup without an equity plan else it’s even worse than working in a corporate. (Note: You have to prove you are worth it before you get a chance to strike your options). What’s the extra edge you own while working hard in a startup if you are only there for monthly checks?
Startups don’t pay you because you can learn quickly, they reward you because you are shipping (not building) what market is ready to pay. Learning is just a by-product. When a startup grows exponentially month-on-month, your salary won’t! The surest way to keep pace with the exponential growth is owning equity. I must also inform you that not every early employee earns equity. One needs to perform exceptionally well so that the management offers you options (or equity) to retain. So how do set yourself for it?
Step 2: Developing a character for growth: Avoiding stupidity
Either the startup will be growing very fast or growing slower than your expectation and it is very common to get lonely because you are solving for many known-unknowns and unknown-unknowns. One is lucky if you have a highly experienced team to discuss but startups seldom overstaff.
We’re wired from our childhood to look for solutions from our peers or mentors or those who have already been through that path. It’s fine to seek help, but often the context of learning of peers will be very different from that of your problem. Since it requires compounded effort to learn and to execute known-unknowns and unknown-unknowns, we often pray if there was a person who could be the magic wand to our problems.
Mentors or no mentors?
The most successful people have always developed their own ways rather than finding a mentor or becoming another follower. The quest to find solutions have kept them aloof from loneliness. Loneliness is a result of desperation, lack of curiosity & eventual frustration to find solutions. Most often it is impossible to describe such a loneliness. This is the point where characters are developed — those who really deserve to taste success are the most aware ones. What separates leaders from the rest is their awareness to be part of a solution than just pointing out problems. (We all have read it a number of times; how many are actually applying it?)
Step 3: Leaders avoid herd mentality
During frustrating times, the herd mentality of finding excuses such as stagnating growth, lack of learning environment, lack of freedom to develop, comparing pay with peers (those who are earning more than you!), bad luck, lack of leadership, etc. begins to sink in. Anything that convinces your mind! One of the easiest ways is to look for sympathy by expressing your frustration. Beware of people or your peers who sympathise with such excuses because it amplifies your whining. Don’t fall in to Herd Mentality! Smart people do get demoralised but stupidity cannot be fixed with advice.
Leaders are those who look up when others are looking sideways. Smart ones make themselves dependable and indispensable at work. They are tenacious and stubborn to deliver rather than whining about getting stuck or luck. Please read Inverted Passion’s blog on leadership by Paras Chopra as many times as you can.
Step 4: Good life is a result of compound interest: Interaction > Impression
I have often been reminded by people and books that compound interest is the eighth wonder of the world.
If you continue building an organisation for 10+ years, you begin to form a strong association. The trust you build with the group is so great that you can do incredible things. When a group is working on a complex problem, the group has no other choice than going beyond pleasantries and dig deeper. The group stops working on creating an impression and starts creating perfect interaction. Trust is not built through conversation but by solving problems with high uncertainty. You can start a company together or invest in a company because today’s colleague can be your investor tomorrow. When you’re playing for the long run it is better to be truthful — you’ll make up any short-term losses with long-term gains.
In Paul Graham words, good founding teams are like real estate. You can change ideas (everything inside the house) easily but it’s hard to move a strong-headed team (the real estate). One thing I have learned while building Inkredo in the last 24 months is that we got to being ramen profitable by just hanging around — constantly talking to users. We decided to survive when we could have died at least half a dozen times. Now we can say that we found our moment of epiphany by merely not giving up. It’s a fact that more than 90% (or even more) startups die. So here’s something we learned on the go, every time we decided to not give up, we gave ourselves a strong chance to get rich while the rest 90% get nothing. That’s how the world will know one day that you got lucky overnight!
If this resonates with you then we are hiring.
