It’s become depressingly trendy to be a startup. Even the United States Federal Government is out stumping the benefits of the startup economy. Just like being an investment banker in 2006, co-founding (or hell, just working at) the next Instagram is bound to get you bottle service and phone numbers.

Ashton Kutcher is still cool ‘cuz he makes startup investments.

Everybody wants to be the cool kids. Which means it probably works pretty well when Fortune 500 recruiters start spinning lines like “Just think of us as the world’s best funded startup.”

Even I know this kind of pitch is riddled with inaccuracies. I’ve heard this phrase, or similar, proudly issued from the lips of no fewer than three employees at three different large public companies. I wonder who they’ve snookered so far, and if they’ve imbibed too much kool-aid to even know they’re snookering.

A startup is definitely a squishy concept. It could be funded or bootstrapped, it could be one person or many more, it could be six years old or six days old, it could have employees or contractors, it could even be birthed from a larger organization, and still be a startup. But if you want to sell your division or product as “like a startup” to anyone remotely attached to an actual startup, there are a few startup staples you’d better be prepared to demonstrate:

Stock Options

Jason Preston

Like it or not, startups offer different styles of compensation than most major companies. Specifically, startups attract a lot of really talented people by offering them a small chance to earn a very large pile of money through some kind of equity ownership (commonly stock options). And just to be clear: a stock grant plan as part of a compensation package is not the same thing.

If you want to be like a startup, you should be prepared to offer your new hires an option on some real lottery-style winnings. If your stock is not a growth stock, that makes it tricky. Maybe you could do some kind of revenue-sharing with your employees. Sound daunting? Do you even have the authority to do it if you wanted to? Stop pretending you’re a startup.

Your Boss Is The Boss

In a startup, decisions get made by the guy sitting in the office with you. There is no weeks-long process of preparing presentations for successively higher bosses until you find someone who can actually write checks.

If you have to go outside your department for authority on anything — especially anything major — then you’re not a startup. Sure, you could call it a trivial difference. If you’re a mostly autonomous part of a big company, then it’s inevitable that some decisions will require a visit upstairs, but to a lot of folks who want to work at a startup that’s a difference that actually matters.

I know plenty of people who are frustrated by the distance between themselves and the ultimate decision maker. Working at a startup can go a long way towards curing that.

Structure

There’d better not be much. Do you do scheduled and formulaic performance reviews and use level numbers to put employees in a defined hierarchy?

Yeah.

Bosses Work

Yeah, I know. Management is work, and often management is actually very difficult work, and it’s very important work. And there’s some management involved in running a start up, but by and large, when you join a startup you expect the executive team to be contributing directly to the product (or service, or whatever).

It’s hard to explain to people who don’t have this kind of experience in their past, but easy to understand for those who do: a critical piece of the startup magic is the enviable bond you share with your fellow adventurers. This kind of bond gets created when everyone feels like they’re part of a group that all contributes to the same vision.

But There Really Are Advantages!

Yes, you’re right. There really are advantages to working at a well-funded and highly autonomous project at a large publicly funded company. But those advantages are not the same advantages that you find at a startup.

Stop trying to recruit people like they’re the same: you’re not going to get startup talent, you’re going to get the people who think they’re joining a startup when they’re not. And are those really the people you want to hire?

Jason Preston (@jasonp) is a Seattle entrepreneur and co-founder of the upcoming project Dent. Read more of his writing at http://blog.dentthefuture.com, like this post on How To Manufacture Creative Success.

Comments

  • Maria Guzman

    Loved the last line, ha!

  • http://moniguzman.com Monica Guzman

    I heard this line a time or two when the Hearst-owned Seattle Post-Intelligencer first went online-only in 2009. It would be smaller, flatter, with each employee able to go beyond previously specialized tasks to contribute to more of the overall content, process and product. That would make it nimble, quick, flexible. So, of course, it would be a lot like a startup. I later learned why the elements that were missing — employee ownership, for one, and, most importantly, real, homegrown authority — limited that flexibility and made it in some key ways not very much like a startup at all.

    • http://www.jason-preston.com Jason Preston

      Yeah, being nimble is definitely a matter of decision turnaround time. If you have a lot of consensus building in the process, or if you have to rely on people who are too disconnected form the “front lines” of the product, your decision lag is going to become a real hindrance. 

  • http://natala.net natala

    Microsoft pitched this “startup” inside concept when I joined them (I didn’t believe them – but I wasn’t looking for a startup). I think one of the key elements of being at a startup is the instability — you don’t know if you will actually make it, and if you don’t things could go POOF. And it is a long arduous crazy adventure to figure out how to make it work. Anytime you have stability — that’s there’s no end to the launch pad — then it probably isn’t a startup. Most big companies guarantee things like transfers and replacement jobs if something goes awry, which takes out a lot of the risk. That risk, IMHO, is often what causes people to do extraordinary things — that change the world. 

    Great post Jason!

    • http://www.jason-preston.com Jason Preston

      Thanks Natala!

      Yeah, there’s a definite sense that real, actual failure could be a big motivator for startup teams. 

      I think some people are more externally motivated, and some people are more internally motivated. But either way you slice it, you’re going to be more motivated if failure leads to no company which means no job. 

  • http://twitter.com/fijiaaron Aaron Evans

    I can offer you extreme instability and really poor wages.  I hope you don’t mind doing boring corporate grunt work to pay the bills and web monkey gigs when in a pinch too.

    But you’ll get a lot of autonomy, be able to work from home, make architecture and business strategy decisions, and a the occasional “work retreat” on the Ecuador coast with surf sessions instead of meetings.

  • http://twitter.com/DarrenGAustin Darren G. Austin

    Great article here, Jason.  Having been recruited into “innovation teams” at large companies in the past, this bait-and-switch recruiting tactic is all too familiar to me.

    Except in very rare cases, large firms are BS-ing themselves if they think that they can offer the work environment, lifestyle and benefits that a start up provides.  Their recruiting efforts would be better focused on the things they can offer that start ups cannot — namely, a higher salary and the opportunity to work on a big brand.

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