Why are people joining unicorn startups?
I am a newbie and am not aware of why people are joining companies such as Airbnb / Lyft / Uber ? Is the base salary high ? What about TC, I assume it would not be high since the company isn't public yet. Is it because of the company work, like people believe in the company and want to contribute? Sorry if my unawareness is offensive to anyone. ๐
Working for a startup is exciting and your work makes an actual impact on the company.
Having been at Lyft for 4 years : When I joined it was small exciting new and growing rapidly. It was fun. The people were fabulously smart, friendly, young, and all working to a common goal without much red tape higher up. In that time our valuation grew 10x, employee count more than that, and the people are still amazing despite more corporate structure. Total comp was below average when I started but the equity grew in value 10x, so in retrospect it paid better than had I worked at an established company for strictly base salary.
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Less risk than a new startup, but still room for a good upside. Also, more opportunity to make a significant impact, explore newer solutions, and grow your career compared to an established tech company.
Base salary is usually lower, because these startups are usually cash sensitive. Early on, itโs cheaper to pay equity than cash. Other than the gambling on IPO windfall, there is a lot of learning and growth in your personal career that you can only do at a high growth company. The goal for most traditional companies is mainly to keep the lights on. You may grow single digits year over year. When you work for a high growth company, the company grows double or triple digits year over year. That means EVERYTHING is constantly changing. Your user base today is double or triple what it was last year. And will be double or triple what it is now next year. What this means is that the product or technology that you built last year is now obsolete or canโt support the growth and what you build today needs to support future growth as long as possible. This also means headcount is increasing rapidly. For personal career, this is an unique opportunity to learn and experience this. This is an unique skill set to have. In addition, since headcount grows rapidly, youโll have great opportunity to climb up quickly and take on more responsibilities.
For me itโs 1. Money from company potentially going public and 2. More interesting product and challenges (usually theyโre trying to disrupt the industry). If itโs just about the money, just become an accredited investor and invest in private companies. That way you have job security, cuz a lot of these unicorns may go downhill (see Snapchat).
Once they go public, you make all the monies (except Snap and Blue Apron).