The University of Washington computer science department sends more than half of its grads to just four companies: Amazon, Facebook, Google and Microsoft. And while those tech giants pay well — on average more than $100,000 for software developers — they’ve certainly moved well beyond the startup phase.
So, what’s it going to take to get more computer science grads to consider making the startup plunge?
Hearing from folks like Isilon co-founder Sujal Patel — who sold his Seattle startup to EMC for a cool $2.25 billion in 2010— certainly can help. In one of the most compelling and informative talks I’ve seen on the wonders of the entrepreneurial journey, Patel laid out no fewer than six reasons why startups are better than big companies.
Speaking at the University of Washington’s Industry Affiliates Annual Meeting on Tuesday, Patel said he was “absolutely shocked” upon learning that the majority of computer science students headed to those four big companies. He also pledged to help fix that issue.
If anyone were to sing the praises of startups, Patel is the guy.
After graduating from the University of Maryland in 1996, Patel landed a $48,000 per year junior engineering job at RealNetworks (when it was still known as Progressive Networks). He worked his way up through the organization, watching the company grow from 100 people when he arrived to 1,000 employees when he left.
“I gravitated to startups because I really liked the idea of having a huge impact on a business, and I loved the idea of being able to stretch my wings and really be able to show what I was capable of,” said Patel, who continues to run EMC’s Isilon unit. “And I really liked the idea of starting a company eventually, and I thought what better way to figure out how to start a company than to be in a company at a very, very early-stage. That was a really important decision that shaped who I was.”
In 2001, Patel co-founded Isilon with UW grad Paul Mikesell. And after many ups and downs — including a rocky period in 2007 in which the company nearly died — Isilon roared back to life. It sold to EMC for $2.25 billion in November 2010, marking one of the largest tech transactions on record in the Northwest in recent years.
“On the fun side of things, I’ve got to tell you, as (Isilon) got bigger and bigger, the fun got less and less,” said Patel. “There are fun things at $100 million of scale and $200 million, but there is nothing like being inside a young, small, focused organization where every single person is rowing in unison and you are trying to move as fast as possible … trying to innovate and disrupt an industry.”
Patel started his talk by asking students to share their perceptions on the advantages of startups, commenting on each of the remarks, including comments from UW professor Ed Lazowska and yours truly. Here’s what Patel had to say:
Exposure to all Sides of the Business
“The larger an organization gets, and I’ve seen this now within the Isilon organization, which inside of EMC is well north of 1,200 people — big companies, you have narrow jobs. You have narrow focuses. You have predefined boundaries, and it is difficult to get outside of them, whereas at a startup, particularly those that are under 50 people, you have a huge opportunity to play a generalist role. You can ask to be involved. It is a big advantage to grow your career.”
“Large companies typically pay more, and they pay more stable currencies. They pay in restricted stock units, as opposed to options. They pay more in cash and signing bonuses. And there is certainly less risk associated with those larger organizations, but there is much, much more upside and much more potential and reward inside startups.”
Exposure to Change
“Startups are incredibly dynamic. Some of them go through a bell curve, and you see the whole thing. Some of them don’t really get to escape velocity, but they are exciting nonetheless.”
“You are able to go and tangibly connect the work that you do and (have an) impact. There’s huge ability to impact, which, frankly, you just don’t have as companies get bigger…. It’s difficult to make a connection between the work that you do, and the impact that you have on the world. And, for me, that’s one of the big things about being inside of startups and being an entrepreneur: What impact are you going to have?”
Springboard to More Interesting Things
“One of the things that we’re incredibly proud of at Isilon, is that we had so many people who grew up in the organization, and used the organization, as a springboard to do great things.”
“You get to go and stretch a lot of different muscles as opposed to being involved in one thing. There are tons of other things that are advantageous, right? Smaller companies are tighter groups. You hear countless times that they are friends and they live and breathe and eat that startup. They have an incredibly dynamic environment that they love. There’s a huge amount of passion. People really like the fact that small organizations typically aren’t political organizations. There is very open communication within these smaller organizations. You typically have lots of transparency, and you know what is going on. And you also get to use your own brain to try to pick a winner when you go to a small company. When you join a Google, you are joining a company that’s in at least three or four major businesses, and about 100 other smaller businesses. It’s difficult to predict where they go and what’s going on. It’s much easier to have an impact at a smaller company.”
After listening to the explanations from the audience, Patel offered his own short list of reasons of why he loves startups, drawing heavily on his experience at RealNetworks.
“It was an incredibly fun and dynamic atmosphere. We were doing something on the Internet that had never been done before,” he said.
1. Fun: “Absolutely making sure that I found a place where I could have a ton of fun, where every single day, I wanted to jump out of bed and go to work, and have fun.”
2. Have an Impact: “I wanted to be able to connect what I was doing on one computer to how the world was changing.”
3. Accelerate career growth: “I had already made up my mind that I wanted to be an entrepreneur, so I said: ‘Great, I need to figure out how to grow my career in any job I take.’”
4. Swing for the fences: “I was willing to trade off the stability and reward of a large company for the risk-reward of a startup company.”
Patel added of his experience: “I always felt like my RealNetworks was like learning in dog years.”
Previously on GeekWire: Seattle’s unlikely hero? How RealNetworks sparked the region’s startup community