When I joined a startup straight out of college, I had 3 goals in mind: 1. To help people make data-driven decisions; 2. To learn how to lead and grow a team without risking my own dollars; and 3. To make a positive impact on the world.
So when I found work at a 12 people strong business intelligence start-up that just raised a seed round, the fit couldn’t have been better. Throughout this adventure, I had the chance to work with tons of talented and ambitious individuals, who instead of taking a well paying job at an established company, also decided to join an unproven startup.
I always asked myself why these other people took the plunge… So I started asking them and documenting their motives. In this blog post, I’ll be sharing the top reasons behind why people take startup jobs. This insight has been crucial in helping our team retain talent.
Why do we join startups? Because we want…
“… to have an impact”
During job interviews, I always ask candidates why they want to join a startup. And I can’t remember the number of times that people respond with: “I want to have an impact.”
Many of these candidates have worked at larger and more established organizations where their ideas weren’t listened to, or just graduated from PHD programs where they grew frustrated of academic politics. And they’ve definitely come to the right place.
Because startup companies lack proven business models, functional processes, and sometimes experienced leadership, opportunities for each single individual to make an impact are found everywhere.
Let’s however recognize that as our organization grows, there are high chances that structure, processes, and politics affect our team members’ ability to voice their ideas and have an impact.
So what can we do to maintain our innovative culture? Here’s what I think: 1. Never lose trust of team members; 2. Strive to coach and delegate, not micro-manage; and 3. Involve team members in decision making and be transparent about our choices. In the wise words of my boss: “Just do the right thing.“
Team members will be happy as long as they can influence decisions. It won’t matter how large our organization grows.
“… to learn”
Another recurring theme when I probe team members about their motivations is the desire to learn. To learn new technical skills, lead projects, and how to manage people. To learn in an environment where making mistakes is OK, even rewarded.
Sounds familiar? That’s right, startup team members aren’t that different from founders: We all want to push ourselves to the limit, get out of our comfort zones.
That said, learning also happens at established organizations, not just startups. It takes the form of observing senior people do things “right” and receiving some kind of structured education. However, the missing piece is the opportunity to learn by trial and error.
Ambitious (and sometimes impatient) people want to learn by doing. And because established companies usually have proven business models and functional processes, they have little incentive to let inexperienced people try things and make mistakes. They are simply more conservative and risk averse.
However, I do want to share a word of caution. Completely learning by trial and error can be taxing on a startup’s growth. It takes a lot more time to get things right. So I personally like to adopt a hybrid model, where we have experienced managers and senior technical people available that can coach younger team members while they try things for themselves. This allows our younger team members to learn by doing, but also leverage the experience and insights of those that have already made mistakes. As result, the number of mistakes made before getting it right and chances of making the same mistakes are greatly minimized.
“… to have a quick win”
Another trend that I’ve noticed among startup employees is the desire to have a quick win. To become successful now, not when we hit 40 or 50. Some people want this more than others, but we all hope for a successful exit.
Why do I think that this mindset is prominent among startup employees?
For one, I don’t notice people joining social or non-profit startups as much as I notice people joining for profit companies, especially well funded and fast-growth ones. How many social entrepreneurs or startup companies can we actually name? We’re lucky if we know one. Fact is, society and media outlets find for-profit ventures that receive billion dollar valuations much more sexy than non-profits. Our goal is therefore to flip those stock options of ours and make a quick dollar.
Second, startup team members have extremely high, sometimes unrealistic, expectations for their companies to succeed. I witnessed this after our startup, unfortunately, had to perform a strategic layoff. While most individuals took the news with maturity, there was a good number of individuals that were extremely upset at the company’s failure to hit its goals. What I realized was that these individuals expected the company to succeed. Even when the chances of a startup making it to an IPO or getting acquired is only 1 in 10, some team members expect success as an outcome. They expected a quick win.
So how can we satisfy our team’s thirst for quick wins without promising IPOs? By accelerating other aspects of their careers, which gets to the next point…
“… to accelerate our career and be valued”
Media outlets continuously report on stories of people straight out of college making millions. While most of us know that the chances of actually becoming millionaires is slim, we’re still attracted to the thought. And by joining startups, we’re hoping to jumpstart our careers.
We want to do meaningful work, to lead, to get big titles, and to get big money.
So in my opinion, in order to retain talent, startups need to delegate responsibilities and promote employees at a faster pace than established companies do. If banks promote an engineer to senior engineer in 3 years, startups need to do so in 2 years or less.
I’d also argue that we need to promote in the form of added responsibilities, titles, and leadership opportunities, rather than a high salary. We care about comparing our career progress against their friends, and salary is hard to compare, so we value it slightly less.
“… to work with smart people”
During interviews, job candidates often ask my team “what is the best part of working here?”
To my great pleasure, all our team members tend to respond with “the people here.”
So number four on the list: Startup employees want to work with talented and ambitious people like themselves.
When I took on my job, I also moved to a new city. And because most of my colleagues shared similar interest, outlook on life, and values as myself, they also became my social circle. Even when we hired new team members, it felt like we were hiring friends. We had people of all backgrounds, demographics, and ages, but all shared the same drive to create something great.
This culture is very hard to create at established companies, where some employees have been there for ages, may not prioritize their professional life as much, or simply don’t have the same amount of energy anymore.
So one simple thing we can all do to keep ourselves happy is to continue hiring top talent, and never be OK with mediocrity.
“… to be cared for”
I’m going to bring up benefits for a moment. I’m currently witnessing a trend where startups promise unlimited vacation, free lunches, beer… thinking that it motivates people and that these things are the basis of a good culture. Yet nothing could be further from the truth (this Bloomberg article supports my argument).
Honestly, I believe that much of these material perks are unnecessary and unproductive. If we do everything mentioned in the points above, our team members will be motivated by what they do, not what they have. Free food and material perks such as the latest Macbooks may actually set the expectation that our unproven startup is already successful. That we’ve got so much cash in the bank that we can afford these perks.
Yet what we actually need is for team members to feel that we’ve yet to achieve success, and that we have to continue working hard and smart. Perks work against that perception.
And regarding unlimited vacation days, I’ve always found that policy confusing. In my opinion, it sets unclear expectations around what is a reasonable amount of time off. Some individuals will take 5 weeks off, yet their managers will complain about it – the policy clears states unlimited, so why are we making the individual feel bad? On the other hand, some individuals will only take a couple weeks off every year, the norm in the USA, but envy colleagues that take more time off – as if others were abusing the system.
The problem is that everyone interprets “unlimited” differently. Some judge unlimited to be 2 weeks, while others judge it to be 5 weeks. It all comes down to what individual managers agree to, but whatever they decide, it’s unlikely to be anywhere close to unlimited. So to set clear expectations for everyone, I strongly advocate for an absolute amount of vacation time every year (e.g. 4 weeks).
The one element of a compensation package that we should not neglect is a fair market rate salary. Many startups underpay their workforce and compensate by giving titles and perks. However, we need to realize that it’s not a replacement for salary. As our team members age, they start having family and kids. This changes their priorities.
I’ve witnessed many talented colleagues leave the organization because of undermarket pay, joining organizations that can afford to pay them more. They also tend to be our A players, individuals that acquired a ton of experience and knowledge through trial and error training. Quite valuable assets that we lose to established firms…
So forget the material perks. We want market rate compensation and a clear amount of vacation time. We want to feel cared for.
“… and to work for a visionary leader”
Startups are a chaotic affair. Our priorities change month to month, and sometimes even our business models pivot.
Among all these changes, I’ve found that team members often find comfort in a visionary leader. An individual that knows exactly where we are going, why, and how. By believing in their leader, team members don’t doubt their eventual success.
So how can we, as leaders, create the perception that we know where we’re going, why, and how? Well, for one, we need to know these things. I thus find it helpful to:
- Make sure to have a competitive strategy;
- Explain why before implementing any changes;
- Care honestly about team members’ well being and personal growth;
- Be around the team, experience their daily work, and empathize with their daily challenges;
- Facilitate problem solving and provide active guidance on what solutions are aligned with our company strategy (know what not to do prioritize and undertake); and
- Avoid micro-managing as it undermines the team’s ability to execute.
Ultimately, we all want to feel important. As long as we feel purpose in our work and have the means to live comfortably, we will fight ferociously to achieve our team goals.
Let’s conduct a survey with our team members and ask them: “Why did you choose to work with us? What is important to you in your time here and what is not?”
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