jsync | Java Staffing Specialist

The Return of the Start-Up

10/10/2007

by Dave Fecak

We all know how the story began and ended the first time around. Chances are if you were a developer in the mid to late 1990’s, you may have taken a chance by leaving a seemingly secure position with a large company for a smaller shop with lots of potential upside, stock options, and Mountain Dew. The bubble bursts, small firms are swallowed up or simply evaporate, and the masses scatter for the safety of a larger employer. Many technologists often reminisce about their start-up days, and it seems they are not just waxing nostalgic for the signing bonuses and paychecks. Working for a Fortune 500 for some just doesn’t provide the excitement of growing a company and being able to see how your individual contribution truly makes a difference.

2007 certainly will not be mistaken for 1998, but it seems the start-up company is coming back into fashion, and the late 90’s migration of tech workers from larger to smaller firms appears to be on the upswing. Those who made the jump the first time around were often blinded by the potential windfall – today’s job seeker has history on his/her side to help with the decision.

“Those who can not remember the past are condemned to repeat it.” – George Santayana

When considering a move to a start-up or early growth technology firm, be sure to give thought to the following:

1. Who’s The Boss? – Many failed dot-coms in the late 90’s were started by technical people with little business experience, or business people that didn’t understand technology. A technical founder today should have the foresight to bring in leaders that have business savvy, and the business-side entrepreneur will ideally bring in a solid CTO/CIO to lead the software effort. Investigate whether a company has expertise on both sides.
2. Are You Experienced? – If the company brass has some past history in a start-up, that is an advantage – even if the venture failed! Learning from past mistakes is a significant experience for executives at young companies, and chances are the scars of their failure are still fresh enough to be a daily reminder.
3. Who Are You? – Are you the type that can quickly adapt to change and wear lots of hats? Would it hurt your feelings if the application you spent countless hours designing, building, and maybe even testing was completely trashed and rewritten? Are you a developer that needs lots of support from other internal groups (QA, DB folks, sys admins, etc.)? Do you require a comfortable chair? If you answered yes to all of the above, you may want to reconsider joining a start-up.
4. Is it ‘All Sizzle, No Steak’? – The most elegant piece of software is absolutely worthless if it doesn’t solve a real business problem that has a market. Techie founders are often guilty of creating technical solutions for non-existent markets. Make sure not to be overly dazzled by technology that has no use or audience.
5. Are They Committed? – You should probably be careful taking a full-time position at a growth company where the founders are moonlighting from their day jobs. If a firm expects you to put in many hours a week (possibly for less pay) and the executives are only showing up sporadically when afforded by their 9 to 5, take caution. Make sure the people in charge are 100% committed to making this venture work.
6. Are They Connected? – Any company creating software will obviously have some target audience (i.e. potential customers) in mind. Do the sales and executive team have solid connections and leads to their desired market? Do they even have a sales team? Creating the product will only keep you busy – selling the product will keep the checks from bouncing.
7. What’s Their Bottom Line? – Early stage companies may not turn a profit for a few years, but most should at least have some stream of revenue and hopefully some cash/credit available for a rainy day. Although privately held firms generally keep their financial data secret, be observant of the surroundings or simply ask how the company is positioned for the future.

The good news is that start-up firms are certainly safer now, as VC’s and angels have generally stopped handing stacks of cash to anyone with a URL and a business plan scribbled on a napkin. The better news is that it seems companies understand that employees won’t take massive pay cuts for stock options, and with the market being tight for tech workers, start-ups are now generally paying market rates for hires. If you are positioned to take a risk and want to recapture some of those glory days, now is a pretty good time to do it.

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