Not a day goes past that I don’t speak to a strategy management consultant with aspirations of moving from consulting into a “sexy” start-up environment… bring on the free lunches and foosball!! From juniors to senior level consultants, it seems everyone wants a piece of the dynamic, fast paced rollercoaster lifestyle that comes with working for such a business.
So I decided to investigate the allure of this trendy industry and see if it really does meet the hype…. I spoke to my esteemed network, consisting of serial entrepreneurs who have worked in many a start-up or tech environment, and some have been there and done that in both start up world and the ASX corporates and have war wounds to show. I have compiled and analysed their input and have come up with my top 10 things to consider when considering this career path.
So it seems that… yes, there are some definite pro’s with this career path. Start-ups can offer you massive amounts of freedom; you get involved in a wide variety of tasks for a company where every day is different. You get direct access to C-suite, you are at the centre of power, and decisions are made quickly. It is a casual working environment and there is usually a strong culture filled with missionaries (rather than mercenaries) and there can be some equity incentives for the right roles.
However you also need to consider…
1/ A lot of the “tech start-ups” in Australia are actually local branches being set up by tech companies that HQ’s are based in the US/London/Singapore. The reality is being based in Australia and working for one of these satellite branches removes you from the centre of power and decision making. The Australian team will often be handed decisions and key strategic changes as fait accompli and won’t have any real input into it. This can often mean regular shifts in strategy and tactics without much advance notice which can be extremely frustrating, especially when the decisions are being made by people who don’t really understand local market conditions. So you need to go into such a company and role with your eyes open and a realistic assessment of how much impact you are going to be able to have on the business.
2/ With regard to a “local” tech start-up, my veteran contacts believe most people they talk to have a completely unrealistic view of what it will be like when they are leaving a management consultancy or industry position. They cite “They are used to the trappings of the corporate environment…nice offices, good pay, bonuses, expense accounts, business class travel….and also very defined roles where they can focus on say “pure strategy” because there is a whole hierarchy of other support staff to look after everything else for them. In a true start-up, you need to be prepared to pitch in and work right across the business, often doing work that is tangential or completely unrelated to what you see as your core role. There aren’t big teams of support staff so suddenly you are doing everything yourself and there certainly aren’t big expense accounts and luxury travel. Working in a true tech start-up is not like what people see at Google or Facebook. It is unglamorous, often involves “unsexy” work, very long hours, and few perks while the business is struggling through its first years”.
3/ Because of the points above, the people who thrive in start-ups are typically different to people who love corporate consulting. To really enjoy your start-up experience you need to have a high risk tolerance, a huge degree of comfort with ambiguity and uncertainty, a willingness to work across a really diverse range of activities (so you might be a strategy consultant but suddenly find yourself having to attend an expo, man a stall, and sell the product face-to-face to a potential customer). Have no pretensions about the work you are doing, and an ability to get on with people from very different backgrounds to yourself (you will no longer only be working with commerce-law and engineering graduates from UNSW and Sydney Uni).
5/ Many typically have completely unrealistic views on the likely success of start-ups. An almost infinitesimal number of start-ups become unicorns. The vast majority of start-ups fail. So you have to go into this with the mindset that you may devote 3-5 years of your life to this business and end up with little more than a modest salary and a huge amount of experience. Some scale ups can burn out in spectacular fashion but the experience certainly can be character building.
6/ People also often also have unrealistic views about the value they add and therefore the equity stake they should be given. Unless you are a founder or one of the senior management, if you are lucky enough to get any equity at all, your stake is likely be very small and simply as part of a general employee equity scheme. You are very unlikely to get super rich on this due to the high level of business failure and the small stake that you have been given.
7/When thinking about career development generally start-ups (and digital business generally) do a better job of accelerating capable people through levels of seniority quicker. You often see people with 5-10 years of experience reaching quite senior levels in digital businesses. In corporates, this is less the case – promotion tends to be more a balance of experience gained and capability. However unless a start-up really hits it big, then the brand recognition is likely to be far less than any brand name corporate. Therefore, a future corporate employer could undervalue your experience.
8/The lack of structure can be a real issue for some people, especially those who are coming straight out of a top tier management consulting environment like McKinsey, Bain or BCG. In start-ups people often work outside of the traditional org structure, and tenure is often just as important as role title.
9/Many have visions of changing mindsets and being a thought-leader when they join a start-up however it takes a special type of entrepreneur to listen to an outsider and admit they are wrong. In many cases they will just plough on with their gut feel, so gaining their trust is key, but this is also difficult as most of the other execs have also been on the journey with them.
10/And finally a word on remuneration. For most start-ups, a significant proportion of income can be through equity in the business. This has the potential to be quite lucrative over the longer term but won’t pay the mortgage in the short term. When candidates come to me asking about roles in a start-up the first thing I tell them to consider is if they can currently afford it… Many are unaware of the drop in base salary that will be offered compared to many corporate or consulting roles.
So there you have it… there is certainly a lot to think about when considering a move into this space, it can be hugely rewarding for some but it is certainly not for everyone.
If you have anything to add to the above I would love to hear your thoughts.