Five Lessons Learned
1. Putting Yourself In A Position To Learn Is Critical
I quickly learned this lesson while working at Hotwire. The site was about to launch and everyone had to take on many different roles if the company was to be successful. In my four years at the company I worked as a Software Engineer, a System Administrator and a Data Warehouse/Analytics Engineer. The experiences taken from each of those roles continue to help me on a regular basis.
Learning can come in many different forms and it doesn’t have to be about learning a new technology. For example, learning to be a great manager that people respect is just as difficult as learning to code a complex product. If you find yourself in a position where you are not learning new skills it is time to move on. The quickest way to reduce your value to the tech industry is to sit in a role that you find boring and that isn’t challenging you on a daily basis.
2. Most Companies Will Never Be Great
“Great” in this context is best defined by the fantastic book “Good To Great” (think Google, Amazon, Apple, etc.). Many companies are good and there’s nothing wrong with working for a good company, just be aware that most good companies will never be great. If you pay attention there’ll be many subtle signs that a company will never be truly great. At that point it is a personal decision as to whether you want to work for a “Good Company” or a “Great Company”. Some of the subtle signs I look out for are:
A fear of loss: when a company is scared to take risks due to the fear of losing what they’ve already achieved.
A lack of innovation: great companies have a track record of creating new markets. They don’t always have to be first but they should be innovating and trying new things.
Complacency: when staff start to think they’ve “won”. In the world of technology you’ve “never won” – just ask Microsoft how they felt when Apple became a more valuable company.
Loss of talent: no company can expect to retain all of the talented people but great companies can retain the majority of their best talent. If the best talent at a company is leaving it is a sign that the company is stagnating.
3. Stock Options Are Complicated (Know Their True Worth)
Note: I’m not a financial advisor and as always you should consult a professional when making investment decisions. If you’re completely unfamiliar with how stock options work you should research the topic.
After three startups (Hotwire, Zillow and Yelp) I am finally getting my head around the stock option world. I’m going to write a more detailed blog post on all of my stock option learnings but here are some useful tips:
The number of options you receive means NOTHING, it is all about the percentage of the company that you will own if you fully vest those options. Several companies I’ve worked for have performed stock splits simply to make the number of options a potential employee will receive sound more appealing. For example: offering 100,000 options sounds much better than 1,000 options even though the percentage of the company might be the same. Make sure you know what percentage of the company your options represent and please don’t do calculations that assume the company is going to be the next Google/Apple.
The percentage of the company that you own is likely to be reduced through dilution. Keep in mind that when a company raises money it reduces the percentage of the company that you own (since the company has to grant more shares to sell to the investor(s) – thus increasing the total number of shares).
Taxes associated with stock options can be extremely complicated (hopefully I’ll get around to doing a dedicated blog post on this topic in the future). My number one tip would be to get the right to “early exercise” if you are joining a very early stage company. For example, if the total cost of exercising your options is an amount you can handle, the advantages to early exercising can be immense (assuming the company doesn’t go under). If the company is successful you’ll end up paying less tax and you are less likely to find yourself in a golden handcuff situation. A balance might be to early exercise half of the options so once you hit 50% vesting you can decide if you want to stay at the company before vesting more stock. I for one will not join another startup without being given the right to early exercise – I can make a decision on whether I want to execute that right if/when the time comes.
4. Don’t Concern Yourself With Other People’s Compensation
I first ran into this situation when I was 20. I was constantly answering 3am phone calls relating to site stability (so much so that a statistician at the company actually claimed that we sold fewer tickets on a particular week that I took a vacation – that was a nice compliment although I’m not sure his math would stand up to much scrutiny). After months of a pretty hectic schedule I was informed (compensation numbers do get out sometimes) that a peer doing far less work was earning much more than me. I was devastated since I was suffering from exhaustion and was absolutely pouring my heart and soul into the postion. My mentor at the time (a person I will be forever grateful to) calmed me down and informed me that it would all work out in the end. My mentor was right, I eventually got a raise and the person doing less work was let go when the company had a round of cuts following the dot-com bust.
Don’t let compensation injustice distract you. In the work place you are bound to run into a situation where someone is undeservedly earning more than you. Put it out of your mind because in all likelihood there’s little that can be done about it and in the end it will work out. If you continue to be a star employee you’ll get your just rewards (it may take a while but ultimately the star employees will win out).
5. Time Is The Most Precious Commodity
Inertia is a powerful force but don’t let it stop you from making a change if you’re stagnating in a current position. Making the best use of your time is a key to success. The tech industry moves fast and you don’t want to miss out on opportunities. I’m not suggesting that you change companies every 2 years but I am suggesting that you keep your mind open to new opportunities that come your way.