Watch Out! What To Look For In Startups For Software Developers

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Hey folks, just headed to CrossFit here. See the TT soon. Sometime soon. Well, I don't actually know. I got to get some time for that. Um, we're going to go to the comments. Uh, this is in response to the one of the videos on startups versus larger companies, especially for new software engineers. And uh this person was asking about um a hypothetical scenario around like joining an early stage startup like what you want to ask for in terms of equity and stuff like that. Um I want to be like very transparent that for this question I don't actually feel um I don't feel qualified to be able to give a good response here. Um and I think that there's a lot of variables And it's not that I don't want to answer, but I don't think that I can give a I don't think I can speak about this from like a place of like some type of expertise.

Uh so I can maybe briefly share like my experience that that I was at an early stage startup but not like um so like I was one of the first engineers hired but I'm not like I didn't partner up with the founder and be like I'm going to build your software Mr. founder. Um, so it wasn't quite like that. Um, and then the other thing that I w I do feel like I can talk more about is like um the the second part to the question is really kind of gauging startups or um the founders kind of thing and I I think I'll talk about that. So uh friendly reminder if you want questions answered just leave below in the comments if they're on software engineering career development and uh if you don't feel comfortable doing that or you want to write more you want to be kept anonymous just uh send a message to dev leader on social media or Nick Cantino on LinkedIn.

I have an open premium profile so you should be able to message me there and if uh you send in a message I can keep you anonymous. You can write more details too that I can do a better job answering hopefully. Um okay. Um so I think to start let's kind of focus on um on some of the like ingredients for a startup, right? I think probably, and I'm not saying this is for everyone, but I think probably one of the biggest misconceptions for startups is like you need to find some company that has like the most bold like novel idea that's never been considered and like it is the next Facebook, it is the next Google, and like this is the only way that you're ever going to be uh you know joining a startup that's going to be worthwhile kind of thing. And I I just think that this is like probably I don't know like in practice probably one of the worst things to to gauge it on.

And I realize that might sound kind of silly because if we look at some of the examples that we're all familiar with, things like Facebook, like Google, right? like these companies built things that were just completely like new. They changed the the world in terms of how we're using technology or socializing like interacting with uh technology. So then doesn't it seem like that's a like stupid advice? Like Nick, obviously I want to be able to work for the next Google. Why wouldn't I go look for a company like that? And um I think it's because of the other factors and like one of them is risk, right? I think that's the the probably one of the biggest factors like you if you're working for a startup, I don't have the stats in front of me. You could just like if you're on the internet watching this right now, just open up a new tab and like literally search for for stats on on startup success rates, right?

And I'm sure they have different uh uh breakdowns of like, you know, years in versus, you know, failing versus when they profit, but the the stats are pretty terrible. Like really bad for for startups turning into something that is even profitable. Most fail, right? So the way that I look at this from a startup perspective and you joining there is like what you want to make your career out of is there's going to be a lot of risk and I think the more sort of extreme or out there the technology is like no one's heard of this but it's going to change the world the more risk there is associated with that now that doesn't mean that it couldn't turn into something amazing it couldn't be the next unicorn but statistically speaking it's just like a pretty wild bet to go take. Okay.

So, I think that if you're just basing it on like this, this is going to change the world or whatever, um like I said, the more out there it is, the less likely it is that it's going to succeed. Um, sorry, I got to merge a couple lanes here. I think that we I don't know like in general we I say we as in you know software developers even just like people in general outside of software engineering when we think about startups we're always I I don't like using the word always very often we're we remember the standout ones right like the ones that were you know groundbreaking but the reality is like especially for businesses is you need to get to a point where you're profitable, right? Like you need to be able to be getting money from customers to pay for a product or service.

So sometimes things that aren't super sexy, I say sometimes, probably if you were to look at success rates of startups and stuff, probably the ones that are like not the most revolutionary, like statistically speaking, are the ones that that end up being successful more often. They might not have like the orders of magnitude like higher exit or something for the the founders evaluation, but the ones that have something probably a little bit less sexy or extreme are probably the ones that are able to get users paying. Um, and I guess maybe another strategy. And I don't think that this is like I don't want to say this is the wrong way to do startups. It's just not how I I rationalize things.

But um if your goal at a startup is just to be part of something that has a really high valuation because you were able to convince investors to put money in um and like I don't know you or the founders or whatever if there's no real interest in I don't know like actually making it a long-term success like a company that exists for years and years or you're building stuff and you're like cool we got our money we exited and like let's just do it And I'm I don't like that idea. It doesn't align with me. Um, and I'm like I said, I'm I'm not trying to sit here and say it's because it's bad or it's you're wrong for doing it or something like that. It's just not for me. And um I think that's another thing to consider with startups is like what's the intention behind the founders, right?

Is that their goal? and they might not even know, right? At some point, if someone's able to put a dollar amount in front of them, they might go, "Man, like that's a pretty good dollar amount." Like, I think we might take that and then, you know, figure out a way to walk away. Um, so it just really depends. I'm driving to CrossFit right now and my I just realized my wife is in this SUV right beside me. He's giving me funny looks. Oh, now she's going to race past me. I don't have my 360 camera on. That would have been a good good use of it. She knows I'm I'm vlogging cuz she teases me for it. There's only a couple days of the week where we can um where we can drive to CrossFit together because she works near CrossFit. So, it just makes sense for her to go to CrossFit and then go to work and I work the exact opposite way or at home.

So, doesn't make a lot of sense to go together. Um, I think the the biggest factor that I would consider for startups is is going to be the people. Sorry, I'm I'm trying to like refocus and bring it back to something else that I can talk about here. I think the people part uh is what I would recommend. Now, I like I'm going to sound hypocritical. I I went to a company out uh out of university where the two founders don't have a track record of running startups and having uh success that way. So for me it would be hypocritical to say like that's the only thing or whatever like I didn't I didn't abide by that. I I didn't know the things I know today though. Um so I I will always say that I was very lucky. I was very fortunate to to come across that opportunity.

But um those guys didn't have the track record yet. But I think that they embodied the characteristics of uh of founders that I think is required. Um, I think that there's there's so many variables when it comes to people, but like on the technology side, if you're just working for a place where they're like, "It's just going to be cool technology. It's just tech. It's just tech. Like we have to focus on either writing the best code or we have to focus on again like the most novel algorithm or or something like when it's just tech and there isn't a plan to get the technology to people that are wanting to pay for it. I think that's risky. I think that's really risky because what we need to remember is that you need people to be paying for the things that you're building cuz if it's not people paying for it, it's investors paying for it, right?

Like if you're getting a salary or anyone's making any money, the money has to come from somewhere. And I realize that sounds like obvious, but I legitimately don't think a lot of people factor this in. Like I feel ridiculous saying it out loud, but um if you're not at a small company, an early stage startup trying to work towards how do we get people to pay for this? I don't know how you plan to be successful. Aside from I don't know how we're going to get people to pay for it, but I guess investors are interested. But like I said, that's not really a strategy I I don't know. Like I just I don't like it. So it's not fair for me to talk about when it comes to people though um and like the characteristics right focused on getting value to customers I think

is huge right you're going to have people that uh like I think what worked really well for us was that we had someone who was very passionate about the user base uh they actually could represent the user base very All so we were making software for law enforcement uh investigators, examiners and the founder of the company was a police officer um that sort of built started building this stuff out of necessity right so I think that was like a good sign right that the person who's sort of in charge of the product direction is very much like they're connected with the people that would use it, they are an expert user of it. Um, it's not like totally disconnected. Now, I'm not saying that again you can't have success at a startup if you have that disconnect, but you have to go spend so much more effort trying to get connected with the audience.

It's going to be the consumer, right? That might mean hiring in the right people to do that, right? Everyone's got different skill sets. So I think when I think about the founders where I was, we had someone who was very good at sales and marketing, extremely good at it, right? Um really good at putting sales teams together, marketing teams together to be able to do that kind of stuff. So they formed like that business side of of the business. And uh the founder or the CTO is um sort of like the expert expert user knows the uh the customer base extremely well. Another note on that too is just because of how the people in the sort of that target market interact. It's very much like uh camaraderie. They're sharing tools. They're sharing information. They're trying to help each other. So very connected.

So he had that plus he was uh like technical enough right not he's not an expert software developer um and you know I'm not insulting him by any means he would tell you this uh if I called him right now I don't have his number but if I called him he would happy happily share he would say I'm not not a strong software developer but was technical enough to understand those things um so I think they had some of the the right ingredients um they trusted the people they hired, right? They were um focused on getting the right people in place and then giving them space to go to go get done. And I think that's important because if you're bringing on people that are not um who aren't also hellbent on making the company successful right from the beginning, it's going to be rough. Like startups aren't for everyone.

And that's I think just a reality, right? Um, in one of the last videos, I can't remember who left the comment, but they were saying, you know, if you're young and full of energy, like a startup might be really good for you. Um, but I would say probably expect to be working your ass off. You're going to learn a ton. But if you're expecting to go in and have it be slow paced, kind of like really good work life balance and stuff, I would just, you know, I could imagine reflecting on things the founders where I was working, they probably would not be enthusiastic about people that just want to to operate like that. They need people that are hungry and want to go get done, right? So when you're evaluating a company, I think like you need to be seeing that kind of attitude uh in the people that are there.

Personally, again, I'm not saying this is the only way to do it, but like if I were evaluating a startup, if I don't if I don't see people that are like, you know, we're going to stop at nothing and like we're going to work our asses off, I I would not want to put any of my energy into that at all. And I realize that might sound like kind of toxic, like it's not a good work life balance. Like who would want to do that? But like from my experience, I I do not know how else you get a startup from nothing to being successful. And perhaps it's because you need capital injection otherwise. We didn't have investment. But I think the people are are what make it um less about the extravagant idea. I think you need something where you can demonstrate you're going to have a competitive advantage.

Uh I think you know I always when I was going through it I never thought like I would we kind of laugh like product sells itself man like so what we're building is so good sells itself but like no uh sales and marketing is like outrageously valuable um and I realize that now from trying to do some stuff on the side. um you know as as engineers like yeah the sales and marketing stuff is um super super valuable. I actually probably should have I'm I'm about to pull into CrossFit. I should have uh saved this for a longer talk cuz I feel like there's a lot more to talk about here. Kind of scratched the surface. So maybe I'll have to do a follow-up. But the equity side of things, right? like I didn't go work at that company and have like a 10% stake or a 5% stake.

Uh and it took me years to even get um to something a little bit more measurable, but like um you don't you don't need um a huge percent of equity to have like like life-changing amounts of money. Um and unfortunately for me based on timing and stuff I sort of missed that. Um so um yeah it would you you don't need a high if the company does very well. You don't need like a a really high percentage to to be in a spot where you never have to work again. So, I take the mindset or have the philosophy that like you don't need to be greedy and you can still win with everyone else. So, that's how I look at things. But, hope that helps as a starting point and uh sorry, there's probably a lot more to say on that, but I'll see you next time.