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The Truth About Being a Software Engineer At a Startup

Should a software engineer join a startup?

The Good, The Bad, and the Sensible of Joining a Startup. One of the most common questions from professionals looking for their next software engineer job is, “Should I join a startup?” The answer lies in knowing who you are, and what you want from your career.

A software engineering role at a startup could provide experience you simply wouldn’t get from working in a large corporate job. The potential financial rewards are mouthwatering. On the other hand, the hours could be long, the responsibilities arduous, and if the company doesn’t meet its potential those promising financial rewards might not materialize.

As specialist recruiters in the sector, we know a thing or two about specifically working in startups. In this article, we pull no punches. If you’re considering joining a startup, you should understand the cons as well as the pros.

Startups – the good

Working for a startup could be the best career move you make. If you have belief in the product and mission of the company, the journey you find yourself on could be incredible. Here are five fantastic advantages of working for a startup.

1. The financial upside

The earlier you join a startup, the higher the potential financial rewards. If the product is successful, who knows what the financial upside could be when you cash in your share options? You may not receive as high a salary as you would when working for a big corporation, but, as Dr. Jeff Jensen, CEO and Co-Founder of Keto AI tells us about working for an early-stage startup (fewer than 10 employees), “Your financial upside if the startup goes big is likely life-changing.”

2. The variety in your role and the skills you embed

When you work at a startup, you’ll be expected to wear a lot of different hats. You’ll learn things you wouldn’t in a larger company, and that’s great preparation for bigger things to come as your career progresses. We asked ex-VP of Engineering Franklin Aguinaldo about his experience. He says: “On larger teams, it’s easy to fall into going through the motions. I’ve never had the chance to do a lot of things associated with launching a product, building a new team, new projects. You can’t do those in a larger company.” “You get to wear more hats in smaller ones… Being in a startup is way different. I had to go in and fix cabling sometimes… we were such a small company that they thought I was the IT guy… I even had to manage an offshore IT team… I think it’s good for people who want to do a lot of different things and have more responsibility.”

3. You’ll work with entrepreneurial innovators

Founders and employees in startups tend to be entrepreneurial and innovative. They look at the world differently, and seek more creative solutions. You’ll learn from ideas that are bounced around and discussed openly. It’s a refreshing difference to corporate process.

4. Your contribution will be noticed

Working in a startup, you’re not a number. You’re more like a member of the family. When you make a significant difference to a product or process, your contribution will be noticed, and credit will be given to you – not your boss.

5. Your colleagues will be equally as driven as you

Pretty much everyone who works in a startup is on the same page. They want to succeed. They enjoy the ride. They want to innovate, and be part of something that makes a real difference to their customers. We agree with Dr. Jensen when he tells us that, “Most software engineers I’ve worked with love to have the immediate gratification that their knowledge and skill will be realized into a product for customers.” At a startup, you really do have the opportunity to deliver a world-changing product or to solve someone’s real problems.

Potential upsides of working in start ups

We approached a CTO working in a FinTech startup in New York for their opinion. “An early stage startup promises speed of execution, dynamism in problems solved, and opportunities for creative craftsmanship. At a startup, decisions are made quicker so the rate at which you ship new software to users tends to be faster. This allows engineers to get the needed user feedback for quicker iteration.”

They continue, “Additionally, the problems startups tend to solve are usually ambiguous in nature. This is because the problems have either never been solved or your company is looking at the problem from a unique perspective. As a result, an engineer working at a startup is forced to lean in to their creativity to get around antiquated systems and APIs, mitigate security risks, and inspire delightful user experiences.

Furthermore as an early stage member of a startup, you have the unique opportunity to not only join a shared mission early on but also rise up the ladder as your company progresses. Startups can be one of the quickest ways to get to a senior position in a company.”

Startups – the bad

On the flip side, working at a startup does have its disadvantages. Financially, a miss is as good as a mile. A flop. For you and for them. If the company doesn’t hit its targets, your equity won’t be worth what you expected. The company may also find it more difficult to acquire further funding. Dr. Jensen says: “Startups don’t always work out and in most cases today software engineers will work really hard at reduced salaries of likely what they could be making for a bigger company all to see their big ‘payday’ not work out.”

However, get your employer choice right and funding shouldn’t be a problem: take a look through the Angel List of 52 best startup companies to work for in 2020, and you’ll see that tens of billions of dollars have been committed in funding by investors who are convinced of the potential of the startup.

1. You could overwork and suffer early burnout

While wearing so many hats is exciting and gives you a fantastic opportunity for rapid development, you risk overworking. Dr. Jensen explains it well when he says: “A lot of software engineers tend to overwork themselves and get burnt out fast. Chances are that the CEO or main founder of the company isn’t as ‘technical’ and so there will be a lot of excitement and drive as engineers complete work that others in the organization will continue to ask for more and get there faster. Consequently, a lot of software engineers just love to build and don’t know when to stop, wherein burnout becomes inevitable.”

Franklin Aguinaldo agrees, saying: “You could be taking on too much responsibility. If you don’t know how to say no, then you could end up in a mess. Not everyone is built for a startup. The people who I’ve seen succeed in startups are a little tougher – they come in prepared and have high energy levels.”

2. Company growth could be limited

It’s easy to get attached to what you create, and the desire to hold on to your creation could limit the growth of the company. Dr. Jensen has seen this happen and tells us that, “This unfortunately doesn’t allow the organization to scale well and can cause early growth friction which can be tough to deal with in a highly ambiguous environment.”
The resources that are available within a startup could also limit its potential to grow. This could cause higher employee turnover, and when the company reaches its critical growth point, Aguinaldo points out that:
“When the company pivots the people need to pivot as well, and sometimes that requires the team to be changed completely.”

3. Startups – the sensible

If you’re considering joining a startup, it’s best to take a pragmatic view. It’s easy to get carried away by your instinct, especially if the product and company values excite you. Dr Jensen’s advice is to take a step back and ask a few key questions about the opportunity:

• Do you like what the company is building?
• Do you really understand the equity upside?
• What are you missing from your current job, and will this replace it (such as autonomy, freedom, grit, etc.)

Franklin Aguinaldo adds that you should ask: How does the company fit into your career goals? Learn about the company’s funding, their challenges, and their partners

4. Eliminate the red flags

As you discuss a new job working in a startup, there are some red flags that might set alarm bells ringing. For example, a CEO might discuss people and culture, or product and financials. Aguinaldo says, “This will give you some insights about their priorities.” He goes on to say that “you should also be concerned if the company isn’t transparent about its funding, and always be aware that the number you’re told may be inflated. Of course, the best way to be sure about the opportunity you’re about to sign up to is to get everything in writing.”

“Even though every detail may seem super small, always get everything in writing – working remotely, vacation, salary, options, earn outs, etc.,” says Dr. Jensen. He further advises that, “A lot of people building teams in early-stage companies want people to ‘wear many hats’. It’s important for you to realize that this will likely be the case, even if you’re a software engineer, so try and get the person hiring you to explain the chaos that’s going on in the company and anticipate what you might end up doing.”

What are the potential downsides?

Early startups can be risky. Outside of the risks of finding product market fit, startups have to work towards being financially sound to cover payroll and other expenses. Struggling startups might struggle financially and in the worst case let employees go.

Moreover, early stage startups tend to lack formalized mentorship structures that you might otherwise get at a big company. At an early stage startup, the emphasis is on shipping fast and growth. As a result, conversations on career growth may be sidelined leading to stagnant professional growth and planning.

Lastly, joining a startup could mean you will be working longer hours than you normally would. This could be stressful to your mental health and could affect other parts of your life outside of work.

Questions software engineers should ask before joining an early-stage startup

It is critical to do a lot of research on the founders. You should ask questions like:

• “What are the backgrounds of the founders?”
• “What specific knowledge do they bring to the space the company operates?”
• “What are their track records?

As a software engineer, it is also critical to understand how the engineering team functions. I would ask if there is a VP of Engineering or a CTO. If there is, I would be curious about their background and what their working style is.
Lastly, engineers should seek more information on the financial health of the startup.

• What is the current run rate?
• Are there plans to raise another round of financing?
• The more transparent the company is about its financial health, the better.

What red flags should you be aware of?

1. Lack of a technical leader (i.e part of the founding team or full time hire).
2. Lack of transparency around the financial health of the business
3. Lack of clarity of both the short term mission and the long term vision of the company
4. Minimal or no demonstrated intentionality around culture building.

When asked about their favorite startup experience, this CTO based in New York sums up how best to choose working in a start up. “I have found that two key ingredients make the best startup experience: First, you should be aligned with the vision of the company. Second you need motivational alignment to join the company – this is usually economic in nature but there could be other types of motivations such as autonomy and leadership.