Why your first job should be at a startup
Startups optimize your networks
Startups, almost by definition, are undervalued assets that will become important in the future. Initially they are dismissed and laughed at as “an app for sexting” and in just a few years they are worth $10 billion. This growth in value also applies to the people who make up these companies. Groups of people who work at rapidly growing startups in their early stages form very strong bonds and over time wield really large amounts of leverage. The early team at PayPal (founded by UIUC alum Max Levchin), now known as the “PayPal Mafia” has attained legendary status in technology circles. Members of the PayPal Mafia have gone on to start LinkedIn, Yelp, Youtube, Space X and Tesla.
The effects of the PayPal network extend much farther than the founding team. A young Stanford undergraduate, Joe Lonsdale, joined PayPal as an intern in 2002 and just a couple years later in 2004 went on to found Palantir, a $10B government contractor. Joe along with many allies from his Palantir, PayPal and Stanford networks went on to found wealth management startup Addepar in 2009 and venture capital firm Formation 8 which has $1B under management. Prior to 2002, Joe Lonsdale as well as his network were most certainly undervalued, however, by aligning himself to a rapidly growing startup like PayPal and making strong connections with a mentor like Peter Thiel (PayPal founder), he has been able to create some of the most important and prestigious companies in the Valley.
Besides the PayPal Mafia and its affiliates, other dense networks of people who worked in the early life of a startup are having tremendous impact today. Marissa Mayer, an early software engineer at Google, is now the CEO of Yahoo. Many alums of Zynga are revered for their understanding of how to drive success using analytics and notable early Facebook engineers are now in leadership roles at newer companies and investing in new interesting startups. Besides the obvious benefit of working with great people, the leverage that comes down the line from being involved in the growth stages of a startup is impossible to understate.
Startups optimize your impact
All startups say they are changing the world, but some truly are. As it gets easier to start a technology company due to the hyper-growth of startup ecosystems and Moore’s law deduction in cost & complexity of infrastructure, more innovators leave the red tape of big-company life and do their work in startups. Big companies become holding companies as their innovation strategy shifts from “build” to “buy”. Facebook bought its top products — Instagram, What’s App, and Oculus. Google bought Android & Motorola to compete in mobile. Twitter recently bought Periscope to bolster user engagement. The list goes on.
Today, the most successful startups build products used by hundreds of millions of people. Importantly, they reach often reach these levels with only a few hundred and sometimes tens of employees. Startups tend to have less funding than big companies so naturally there are less employees and each one has more responsibility. One way to measure impact is to look at the ratio of number of users to the number of employees. At Instagram it was a ratio of one engineer to 10 million users. It’s a really incredible feeling to be a part of something that even a few people use. Startups greatly amplify this leverage and by working on the right problems with the right people, you could contribute to products that touch millions of real people and still feel a great sense of ownership of your contributions.
Great startups tap into dynamics about the world that ultimately improve the lives of millions of people and approach them with a singular focus. Of the many paths you could follow, working at a fast growing startup is your best chance to change the world.