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Business Misc. Startups

Joining an Early Stage Startup or Joining “The Man”

Joining or doing a startup is not for everyone.  It doesn’t matter whether you are in the US, China, the UK, France, or India.  It takes a certain amount of energy, self-discipline, determination, creativity and faith to be able to survive in a startup. Most of all, it takes an incredibly strong constitution to deal with the stress of being at a startup.

I have been involved with a few failed and one very successful startup.  My advice to people considering joining a startup, do it if you’re more interested in learning above everything else.  A startup is where you will learn more than any of your peers at a large organization.  You will have much more responsibility and you won’t have time for BS.  It’s all about getting things done, frrom cleaning the office, to picking up the water, to budgeting, to raising capital, to developing the business.

If you’re afraid of working 18 or more hours a day, seven days a week, then a startup isn’t for you. If you’re limited in what kind of risks you can take because of responsibilities and obligations then don’t go to a startup. If you have a need for current income and cannot easily risk any current income by taking stock options and living on a very tight budget, then don’t go to a startup. If you’re interested in a paycheck that pays you market or above market, then you’re better off going to a larger, more established company.

Startups will usually pay less than market, but they will provide you with an experience that will be quantifiable only when 1) you leave the startup and look for a job at a large company and 2) if and when your startup grows up, management adjusts your total compensation to be more in line with the market.  Of course, there are many other factors involved in negotiating higher compensation and there are many books on the topic.

Stock option plans are very difficult to structure and put together unless you’re an experienced entrepreneur and know exactly how things are done, or if you have deep pockets to pay the right lawyers.  I’m sure in places like India it’s much more difficult since the legal and business infrastructure for startups is in its infancy. Many resources are becoming available to tech entrepreneurs in countries like India but it will still be a few years before the legal and business infrastructure matures. This is a significant risk for the startup, the entrepreneur(s), and those employees who took a chance at making this startup the next big thing.

My experience has taught me that the most nimble (and many times – chaotic) startups are the ones that have very flat organizational hierarchies. Adding multiple levels of management in a startup creates confusion, bureaucracy, and slows things down. At the early stages of a company, it’s incredibly important to be quick and be able to adapt to changing market conditions. Multiple layers of management along with too much procedure slows things down. There’s a time for procedure and process to be embedded into a company but doing it too early can cripple a startup.

A startup is all about risk and taking chances. If you can’t bear the stress of not getting a paycheck next week because the company is short on cash, then you really need to think about whether a startup is right for you. A startup is always changing. You might have been hired to be a biz dev associate but three months into the job, you could get moved into operations. If changing positions and careers at the drop of a hat doesn’t allow you to build the skills that you want in one specific area then a startup may not be right for you.

Each individual must assess their risk tolerance separately before even thinking of interviewing at a startup.


Joining a pre-VC startup « sameer’s blog

Joining a pre-VC startup is not only a job or a career choice; it’s a lifestyle choice. This is truer for folks who join in early and join as part of the early management team (senior/m

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Business Misc. Open Source Startups Technology

Entrepreneurship and Open Source Software Charity?

Rajiv Poodar has a great post on Wireless Utopia: Open Source and Charity about his frustration in explaining open source business models to others in Bangalore. It’s not a problem specific to Bangalore, though.

Charity is a dirty word in business circles. Free Open Source Software is considered charity. Therefore FOSS == Dirty. Free Software Business == stupid idea. FOSS Entrepreneur == BIG LOSER.

Wireless Utopia: Open Source and Charity

I think it is impossible for most people to comprehend that OSS is not charity. Open Source Software is a way of increasing the value of software faster than proprietary software and it is a way of improving software development efficiency (some will say it improves software quality but I’m not so sure about this). OSS allows people to customize, build upon previous works, improve upon previous works, and add value faster than closed systems can do. This isn’t to say that there isn’t a place for closed systems but it is meant more to highlight that a company built on open source software (and creating open source software) can be much more valuable than a company building only closed source software.

Creating a technology business is more than creating software. Most people don’t understand that. They believe that the software is the secret sauce. It’s usually just a very important ingredient of the secret sauce. As most successful entrepreneurs will tell you, the secret sauce is the execution, not the software, not the team. These are all ingredients in having flawless execution.

Though the Linux source code is free and open source software, it is not charity. It is the underpinning of a multi-billion dollar software industry (RedHat, Novell, IBM, HP, Mandriva, etc). The source code for MySQL is widely available, though no other companies have been as efficient at building services around MySQL than MySQL AB.

Preach the open source business model to those who have a chance of understanding it. Those that can’t get it, will eventually be left behind.

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