Ask HN: What's your experience working for a YC backed startup?

https://news.ycombinator.com/item?id=27636593

by hoerzu • 5 years ago

81 48 5 years ago

news.ycombinator.com

What was experience? How large was the team? Good things, bad things?

If youre looking for data to back up a feeling you have about it “being bad sometimes” youll find it. But you knew that.

I would actually focus more on what kinds of behaviours, skills, and values you appreciate in your coworkers and apply that to the founders. The culture of any company is dictated by them primarily, so meet with them after you decide what works best for you.

dyeje• 5 years ago

I've worked for two YC companies. One was around 10 people, the other around 40. There was good and bad as with any company, none of which was directly attributable to being a YC company. I don't think there's much signal you can derive from it as a candidate really.

ipaddr• 5 years ago

Every YC compant is different. YC provides investment and coaching for senior leadership. YC companies are startups with the good and bad of that.

H8crilA4• 5 years ago

Just remember to price all the equity/options at $0 as you go with the decision making (and double check it's not actually potentially negative, can happen in some cases due to taxes), as you're not a diversified fund with tens/hundreds of companies in your portfolio (which helps with smoothing out the volatility, as well as being able to handle the complexity of the capital structure).

WisNorCan• 5 years ago

This is one of the oft-repeated pieces of advice on HN that happens to be completely wrong.

Let me know if you are willing to sell any options that you have at $0 from YC-backed companies. I’d be happy to buy as much as you have :)

It is true that there is risk, but there is also more upside if things go well. Make some educated guesses on outcomes and adjust by probability. The important thing is to revise your model periodically as you have materially new information.

Of course, this is just the economic consideration. There are many more important considerations.

ska5• 5 years ago

[edit, naturalauction made a good point] A better way to do this, although obviously impossible to do really rigorously, is to estimate expected value of the equity. Note that EV will not be zero even if lots of possible paths lead to equity = 0.

Compare this and the rest of your comp to other opportunities you have, and factor in how miserable it would make you if it fails (you aren't a rational actor).

nrmitchi• 5 years ago

I mean, sure, but that's not really what the commentor meant.

They stated "as you go with the decision making"; which really means "don't make financial decisions based on an assumption that your options are going to be worth what your recruiter says they will be".

Make some educated guesses on outcomes

I have seen tons of people make "educated guesses", which are all extremely rose-y outlooks. "Even if the company only sells for $30M I'll still own 1%", which completely ignores most of the underlying reasons why your stock will be worth absoutely 0.

Of course if you do understand all of the underlying risk and outcomes, go ahead and make educated models, but the majority of the time people don't even know what they don't know.

YuriNiyazov• 5 years ago

Wow. Why even go work for a startup if you are going to do this? Might as well just work for a FAANG and collect immediately liquid equity.

codingdave• 5 years ago

It sounds like you are trying to be snarky, but yes - that is exactly the point. Startups are high-risk/high-reward for founders. They have equally high risk for employees, with lower rewards. For many people, that just isn't the right move, and maximizing their cash salary is a better choice.

Startups are not the right answer for everyone.

mtnGoat3• 5 years ago

You usually have to vest over years to get full value out of that “immediate equity” you are referring to. And in that time a stock can tank.

Still a risk. Albeit smaller.

MattGaiser• 5 years ago

Is there anything in particular that YC does to set up employment structures/ways of working?

As this seems like asking "What is your experience working for a publicly traded company?"

kritiko• 5 years ago

There are some pretty clear answers to the publicly traded company question. Financial statements are much more transparent and regulated, HR policies much more formal, equity awards are easier to value and sell, etc.

A lot of responses seem to believe this question is either naive or asked in bad faith. Insofar as YC is a network of founders and mentors with strong opinions on how to successfully start any grow a venture, it would be shocking if there were no generalizations that you could make.

haliskerbas• 5 years ago

How different is “working for a YC startup” than “working for a funded SV startup”

jmcgough• 5 years ago

YC startups aren't significantly different from any other startup at a similar stage.

taylorlapeyre• 5 years ago

The YC accelerator is really set up to encourage the founders' best qualities and to drive them forward in a supporting environment. The shape and culture of any YC company is almost entirely due to the founders, not YC.

ping_pong2• 5 years ago

Founders made 8 figures, most employees including early ones got less than 100k. Back during the dotcom boom, options were distributed a lot more generously. At the first company I joined, the admin assistant made enough from the IPO to buy a vineyard and retire.

SiliconAlley• 5 years ago

So everybody is in it for the money? Noted.

ping_pong2• 5 years ago

Oh, are we supposed to be in it to "make the world a better place"?

https://www.youtube.com/watch?v=B8C5sjjhsso

spamizbad• 5 years ago

I would hope so. The expectation is to build a multi-billion dollar company. There are more interesting products and ideas to explore out there, but they won't make you rich.

Which is why I'm super-skeptical of anyone who says they're at some rocketship growth startup because they just want to make "great products". Unless their definition of a "great product" is one that makes a lot of money or is popular, they either aren't being honest or don't fully understand their own motivations.

boleary-gl• 5 years ago

That’s typically how a job works…

jedberg• 5 years ago

This has been my observation as well. VCs have gotten really good at extracting maximum value (and leaving a bit for the founders since those are the people they are negotiating with). Sometimes even the founders don't realize how their employees are getting diluted because the deals are so complex.

Back in the 90s they weren't as good at it, so everyone made retirement money. But now you're not making retirement money unless you happen to work for the next Facebook or AirBnb. Basically unless the founders are making 10 figure exits, you aren't making much at all.

akomtu• 5 years ago

The 1:100 proportion sounds about right. A way to fix that would be to tie an employee's comp to the founders comp, e.g. the first employee always gets 25% of the founder's payout. I'd be really curious to see how typical founders evade such a proposal.

DantesKite• 5 years ago

The people are driven. Absurdly driven.

jiltedycthrow• 5 years ago

Took a 50% salary cut for 2% of PagerDuty as the 7th hite. I was devops but spent almost all of my time on marketing, taking us yo conferences and easily closed enough big deals to cover my pathetically low salary.

My father died a couple weeks before re:invent. In my grieving I took us there and hooked us up with netflix and yahoo, probably worth more than the funding we had at that time.

During the conference a creep was hitting on our married office admin and basically stalked her. Our cto and ceo were cowards and did nothing so I protected her.

Ashamed of their cowardice they fired me. A month later we hung out and they offered to bring me on as a marketing consultant. We got drunk and they admitted a higher up at YC told them to fire me because I had too much stock.

I would never, ever do businesd with a YC company again.

I will get shadowbanned for this post.

strikelaserclaw• 5 years ago

i wonder if this sort of stuff doesn't happen more often, people without a seat at the table basically are dependent on the goodwill of the founders, investors etc... and we all know that for many people greed trumps any sort of morality. In your opinion, is there anything you could have done better to protect yourself?

dang• 5 years ago

I will get shadowbanned for this post.

We don't ban people for criticizing YC or YC startups (https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...). When we've banned your previous accounts, it has been for obvious abuses as we explained when we've banned you in each case, and then only after warnings that you were certainly aware of, since you responded to them (rather aggressively as I recall). I have no idea what happened at PagerDuty (though the bit about a "higher up at YC" strikes me as unlikely based on everything I've personally observed at YC). Just generally though, if you want your internet story to have credibility, you should probably omit demonstrable falsehoods.

karaterobot• 5 years ago

Around 50-60 people. Excellent team, wasn't crazy about the founders. Whatever the stated goals of the company were, the only ones that mattered day-to-day were getting to (and maximizing) the next investment round. Eventually left due to frustration with the above: I didn't join for the stock options, I joined to make a good product, and it seemed like every decision leadership made hurt the product in the long run in order to chase short term KPI gains. That strategy ultimately backfired, wouldn't you know it.

mtnGoat3• 5 years ago

This kpi driven decision making persists across VC funded start ups everywhere. Gotta keep those investors happy so they pony up for the next round. Whatever kpi you sold them on, is all that matters now.

version_five• 5 years ago

I've only worked at one startup (not yc); this was my experience too. We did lots of things that felt illogical (mainly related to what was prioritized) that I understood to be based on showing investors what they would want to see. I'm not in a position to judge whether this was s good strategy (it wasn't for us). Personally, I'm not a fan of doing stuff just because it's what I think other people want to see, and if I was going to do that, I'd see no reason in having a startup. But no doubt there are big success stories of higher valuations by focusing on subscription only SaaS over other revenue, for example, and that may be the best way to go.

awillen• 5 years ago

Yeah, this is just the VC-backed model, not specific to YC. The reality is that for startups that choose to go this route, if you can't raise then you're dead. Happened to the last company I worked at. It's not great (though the flipside is that if you do succeed, you're able to scale quickly), but tough to judge the founders for optimizing for the thing they need to keep the lights on.

rickspencer3• 5 years ago

I have worked for two, and the differences between them are so stark at every level that I wouldn't venture to think that there is a lot of commonality between YC companies in general.

muzani2• 5 years ago

I've interviewed with several, worked at none yet, but hopefully that would change soon. Similarities I've noticed:

- They grow fast. Unlike larger companies, there's room for promotion. Unlike smaller companies, you're not stuck being the sole person responsible for a thing for the next two years.

- Lots of tech debt. All startups have them, but YC ones are on another level. Like the Collison validation method, where they'd give an API and there would be a human on the other end handling all payments that went through it. They often acknowledge and manage it better than most startups.

- Product oriented. They believe good product leads to profits, which leads to investors. You don't end up building as much crap that nobody uses.

- Hard work. Some are proud, some are defensive/hide it, some hint it (free dinners).

Other than that, culture is mixed. You have liberals and racists. High and low pay. Bureaucratic and flat. Sincere bosses and charlatans.

ghufran_syed• 5 years ago

high pay is opposite to low pay… bureaucratic is opposite to flat… sincere is opposite to charlatan… liberal is opposite to…”racist”?

It sounds like your definition of “racist” is “disagrees with me politically”? Do you think such a definition helps victims of “old-fashioned” racism where people treat you worse because of your skin color?

muzani2• 5 years ago

You're looking too much into it. Some care a lot about pronouns and minority ratios. And some are reported on glassdoor to pay less and look over minorities for promotion.

For context, a lot of these are Asian, where American political definitions don't apply. Maybe a better word might be "family business".

Some companies are built like gangs. They're there to protect a certain ethnicity. You're expected to speak Mandarin, or it's "expat friendly", or they appreciate those who pray 5 times a day. Certain religious holidays are acknowledged and some are not. But very few people can build a unicorn and a family business at the same time.

Maybe what I meant was some companies try to hire "people like me" and others try to hire "people not like me".

Boxxed• 5 years ago

Exactly the same as a non-YC company

nfw2• 5 years ago

I'm sure there are a lot of really great companies, led by great people, that are backed by YC. But I wouldn't assume anything about the caliber or maturity of a company just because it was accepted into YC.

I spent a couple months on contract with a friend's startup that had been accepted to YC. The company was just 2 founders when I joined with a barebones concept and no customers. I ended up doing (in my biased view) most of the meaningful engineering work during my 2 months there, including 100% of the work to build the marketing page and the product demo that was used for their pre-seed raise. There was no semblance of work-life balance. There was an expectation to work every day. Every coding marathon to ship bled into the next day's work on equally urgent tickets.

The offer I got to stay long-term was a few percentage points, vesting over 4 years, and a salary that would basically just cover living expenses. Another friend of mine had just got an offer at 350k total comp at a large company as a (MID-LEVEL!) engineer, so the decision to leave seemed pretty obvious.

That said, I think there are some decent reasons to join a YC startup.

- If you really believe in the company's mission, product, or founders

- If you prefer the go-go-go work environment. Some people are just wired this way

- If you plan to start your own company, it might make sense as a stepping stone and learning experience

davidajackson• 5 years ago

I've worked for or in some contracting capacity for 3. My thoughts:

1. If you're joining in the very early stages (like YC batch time), make a plan in writing with the founders for how your compensation will change once the company raises/grows. Those early days will be hectic and it's easy to let those changes get delayed, and something unexpected (good or bad) always comes up since they're startups. You are going to be sweating a lot to get things done by Demo Day or whatever the milestone is, so make sure the comp situation is clear.

2. Do your own analysis on the unit economics of the business to evaluate your potential payout. There will be lots of projections thrown around to attract investors -- as an engineer, you will be able to see all the data and make your own projections.

3. The more industry experience the founders have, the better. Worked for a top 100-500 company? Managed? You're de-risking the job culturally.

4. As far as evaluating character/people you want to work with, pay close attention to how people you are considering working with treat people significantly below them in pay grade. Go out for a coffee and see how the founder treats the waiter -- it sounds silly or obvious but I find it's a good judge of character.

Teams I've worked with: 2-6 people, very early stages.

Ask HN: What's your experience working for a YC backed startup?

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