Note: This is Part II in the Startup Team Building series. Read Part I HERE
Bilbo’s offer letter from Thorin in J.R.R. Tolkien’s The Hobbit exemplifies the proper attitude that you must have when joining a startup adVenture.
“For your hospitality our sincerest thanks, and for your offer of professional assistance our grateful acceptance. Terms: cash on delivery, up to and not exceeding one fourteenth of total profits (if any); all traveling expenses guaranteed in any event; funeral expenses to be defrayed by us or our representatives, if occasion arises and the matter is not otherwise arranged for.”
OK. So you are an entrepreneur, but you are not an inventor. You have no plans to found a startup, but you are driven to join a team that is building something from nothing.
No problem. Simply find an adVenture that compliments your passion and talents.
Unlike seeking a position with a Big Dumb Company (BDC), you cannot simply scan the want ads, shotgun your resume and do the interview dance. Finding the right position with a startup requires flexibility, creativity and patience.
Tactics For Joining An AdVenture
Consider which of the following tactics best fit your personality, risk profile, financial standing and temperament. This list is not intended to be a one-size-fits-all recipe. Deploy only those tactics which are appropriate to your unique circumstances.
Equity Focused – Display your belief in the startup by negotiating for an out-sized stock option grant, in exchange for a lower base salary. As discussed in W-2 Income Sucks, favorable tax treatment of capital gains allows you to retain a greater portion of the wealth you have helped to create.
Flexibility – Startups are chronically in need of talented contributors. Because of this perpetual manpower deficit, emerging entrepreneurs are often given senior responsibilities that would not be available to them at a BDC. Conversely, startups generally require early employees to perform menial tasks that would be delegated at a larger company. If your adVenture is successful, you will eventually be in a position to focus on the tasks that you want to accomplish and hire others to perform less desirable tasks.
Egoless – When you join an adVenture, check your ego at the door and subordinate your self-interest to that of the team. Your individual success will ultimately be derived from the team’s overall success. Strive to be a low-maintenance, high-performing contributor, as discussed in more detail in Some People Are Indispensible, But No One Is Irreplaceable.
Leverage The Startup Ecosystem – Establish relationships and gain credibility with the accountants, venture capitalists and entrepreneurial lawyers. Be patient. It will take time for the word to ripple through the entrepreneurial community regarding your availability. Be sure you can answer the following questions (i) Who you are, (ii) Where you are going and, (iii) How you are going to get there, as described more fully in Personal Pitch. As young entrepreneur, Nithin Jilla points out in this interview; never forget that effective networking is based on quid pro quo. Find a way to first help the people with whom you are networking so they will be more apt to lend you a hand when you need it.
Batting Cleanup – If you are fortunate enough to be in a relationship with a significant other, you can swing for the fences while your better-half maintains a secure job. I was lucky enough to deploy this tactic, as my spouse held safe jobs with various BDCs while I worked for far too little pay and accepted significant risks at my various startups.
If you do not have a significant other, you may be able to call upon your family to provide a temporary financial safety net. Irrespective of the availability of a third party to financially lean on, you can create mini-ventures or venturettes that will increase your financial flexibility and allow you to eventually swing for the fences. Venturettes are discussed more fully in Small Ideas, Big Benefits.
Value Before Pay – Add value to your new adVenture before asking for anything in return. In your initial discussions with the startup, identify one or more tasks you can perform which will deliver real value. For instance, at Expertcity (creator of GoToMyPC and GoToMeeting, acquired by Citrix), I negotiated a highly advantageous agreement with an online credit card processor, months before I was added to the company’s payroll. This was in 1999, when it was a challenge to get Big Dumb Company processors (they were all large and dumb back then) to handle transactions for a dot com startup. This agreement added value for several years. The Founders were impressed that I was willing to invest my time to negotiate and craft this agreement, without asking for quid pro quo compensation.
At Computer Motion (NASDAQ: RBOT, acquired by Intuitive Surgical), I helped negotiate the company’s new phone system, which saved over $35,000 before I was an employee. Thus, before ever receiving a dime, I helped the company in a direct and material way.
Not only will this proactive approach give you a chance to display your skills, it will also provide you with an opportunity to familiarize yourself with the company beyond what is possible in the context of the traditional recruitment process. By joining meetings and helping to make decisions before you accept a full-time role, you have an opportunity to assess the company’s fledgling culture and determine if it is a good fit for your temperament and aspirations.
Pay to Play – Another way to secure your position on a startup team is to invest. Bringing capital to the adVenture effectively offsets the incremental cost of adding you to the team. From a Founder’s vantage point, securing investments from early, key employees is a convenient way to further strengthen the employees’ vested interest in the company’s ultimate success. I purchased common stock, at its fair market value, at all of my startups when I was an operational executive.
Standout – I landed my job at Computer Motion, in part, because I took the time to read the Founder’s PhD dissertation, which was titled, A Computer Architecture for Advanced Robot Control. Although it was highly technical, it provided me with a basic understanding of the company’s technology. It also served as a great door-opener with a Founder who did not initially appreciate the value that a businessperson could add to his engineering-oriented startup.
Become a User – If practical, use and rigorously evaluate the startup’s product or service. When I interviewed potential new hires, this is one of the key factors I considered when evaluating each candidate’s commitment. At Expertcity, we offered a free 30-day trial version of GoToMyPC, which made using the service very convenient for any potential new hire. The number of candidates who professed a passionate interest in our mission and did not take the time to download the free version of our product was consistently surprising and disappointing.
It is foolish to commit your life to a startup without a thorough first-hand, user’s perspective of the company’s value proposition. In some instances, the startup’s product or service will be under development and it may not be possible to test-drive their solution. In such cases, ask to become an Alpha user. Hands-on experience with the company’s solution will provide you with invaluable insights as you evaluate the adVenture’s fit with your skills and proclivities as well the startup’s overall chances of success.
Professional Student – If you are on the front-end of your entrepreneurial career, you should consider first taking a job at a BDC. This will give you a chance to learn a bit on their dime and gain some experiences that you can apply when you eventually join an adVenture. This concept is discussed further in Advice For Emerging Entrepreneurs.
There And Back Again
Many people do not realize that the subtitle of The Hobbit is There And Back Again. This subtitle underscores what serial entrepreneurs know to be true – it is the journey that matters most, not the treasure you will split with your team at the journey’s end. Enjoy the journey.
Note: This is Part II in the Startup Team Building series.