This is the first part of the following topic (Where should a technologist work)
I work in a huge organisation, one of the largest financial institutions in the world. I design software and manage a few teams but I come from a start-up background.
If designing a good solution is a process of balancing trade offs deciding where to work is a similar exercise. The first trade-off is Financial.
Generally speaking the bigger the organisation the better the chances of seeing some cash every month. The smaller the company the bigger the risk of not making the rent. This is mostly for reasons of scale, a large company can take a few hits before closing its doors but a smaller company is less resilient to upheavals.
I remember the day working at a start-up for over 2 years when I got a phone call from the MD. It was something like
‘Hi TikiTakaTechy, how are you, I’ve got a little bad news’
‘Not too bad, how are yo…. sorry what type of news now’
‘Well the deal we were due to close last month hasn’t come through yet so we are a little short, were going to have to go with half your salary this month, same with the guys who work for you. The second we see some cash we’ll call you up and pay you straight away.’
‘What, but I have goldfish to feed, and a girlfriend to…. feed I suppose. I might even need to eat.’
‘Sorry, another call coming through, might be the client, have to run, oh can you let the other guys know the news on the money front as you are the team lead, speak to you soon, byeeee……. click’
I was a little shocked, I forgot that we were at the mercy of clients and customers, I mean we were building a first class product that was breaking brand new ground. The code was almost poetry to read. I told myself that it was just a blip and gathered the guys to let them know what had happened. To my surprise nobody freaked out and we all had a bit of a laugh about working for a charity, finished early, went to the pub, got drunk and turned up again the next morning as normal (the implication here is not that we were hungover as normal, that was only semi normal).
So about three weeks later I get another call from the MD. This time the news was even worse.
‘Hey TTT, how’s it hangin, listen we are really close to selling the business to BiggerCompany. We just need to finish features x, y and z and document them and we’ll be set. We are all ready for a big payday my friend, real big, we can swim in Guinness’
‘Great, it should take us about 6 weeks or so to finish the features. Wow that is fantastic news, especially about the Guinness.’
‘Now the only thing is that we are totally out of cash, we need the last reserves to pay the lawyer to write up the contracts. Without you guys finishing the features the sale will fall through.’
‘But we only got half our wages last month and we all have bills’
‘Is there somebody you can borrow the money from? Can you get another credit card? If we don’t finish this the company will disappear and all our work will have been for nothing. It’s all down to you guys, after all it’s your brilliant work that’s got us this far and I’d hate any of it to go to waste’
The development team were now in a quandary. Working for the company was exciting and we’d had a fantastic time. We could have earned more at a bigger company but we were masters of our own destiny. Were we going to let our company go without a fight?
We spoke to our partners/families. One of the guys left, one stayed part-time. That left me and one other programmer to work for free for 6 weeks plus picking up the other guys work too. After all, we had sweated for 2 years over this product, we couldn’t let that effort go to waste. I was falling head first for what economists call the sunk cost fallacy. Because we weren’t thinking rationally we were overvaluing the work we had already put in. (This is a great explanation The Sunk Cost Fallacy).
I basically went through hell over the next 3 months. For a while I lived off credit cards and my girlfriends savings. I had become depressed and unhealthy, I wasn’t eating well and I was hardly sleeping at all. Once the credit cards were used up I had to borrow money from everybody I knew, my parents, my girlfriends parents, friends, anybody I could ask. The lowest point was when my little brother (aged 12 at the time) gave me money he had saved in his coin jar. I was smart at technology but I had made a poor decision in staying on to help the company. The worse things got (as debts piled up and friends started avoiding me) the more and more I felt that I couldn’t turn back now.
In the end we finished the features, the company was sold and I got all the money owed to me plus a very small profit which would barely have covered minimum wage overtime for all the extra hours I’d worked.
I never got into the company for the money but when it dried up I felt that it was me who was left hanging out to dry.
In loads of ways I had an incredibly lucky escape, I had people to support me financially, a great family and very understanding girlfriend. The company was successfully sold and we all got our money back.
The point is this. If you work at a small company you are much more likely to get the call I got saying that the money is running out. If you work at a big corp you will never need to look at your account to make sure that this month’s money is there (and if there are issues you will most likely see them in the press first).
Depending on your situation in life this is a massive consideration when deciding where to work. If you are free, single and don’t have a mortgage or kids you can afford to take some risks.
The start-up world is incredibly exciting but there are dangers too!
In the next post ill talk about Autonomy in start-ups vs big companies and how it can both create and destroy motivation.