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Adam is the co-founder and CEO of Owner.com. He is also a proud high school dropout turned Thiel Fellow and Forbes 30 Under 30 honoree.
This guide is for people who are interested in joining an early stage technology startup, when it is between 1 and 100 in team size.
It includes commentary from the first employees at multi-billion dollar startup success including:
Here’s an overview, which you can read in any order:
If you’re optimizing for work-life balance, top levels of base salary, or social status – early stage startups probably aren’t for you. They give early team members the opposite of these things.
Plus, critics of startups say that joining a startup is risky and foolish – because most fail and you could make more money at an established company like Google.
So, why do people even join startups in the first place?
What the critics are missing is that not all startups are created equal.
Startups are a high risk, high reward game. They’re the Olympics of business, where the best of the best (in business) go to compete because it’s the hardest challenge.
All olympians make serious sacrifices, yet most never make it. But those that do make it make millions, build a reputation, and become world class at what they do.
Similarly, in startups – you risk years of your life, grinding away at building a company from nothing. Most startups fail, leading those years of life to feel wasted and under-compensated.
The key is in joining the right startup.
Because, in the case that the startup you join early does succeed, it can:
And, successful early startup founding team members often go on to be successful founders, major company executives, and venture capitalists:
Because there’s so few people, you learn how to do everything and reach a level of resourcefulness that you didn’t previously realize was possible. You get trained in getting stuff done, and in ruthlessly prioritizing problems to solve.
You learn quickly that you have to let some fires burn in order to focus on putting out the ones that could kill the company.
So, what makes the right startup great?
Top startups have a far greater likelihood of success and a far greater opportunity from the very early days. They don’t just get lucky. Luck plays some role, but among the best startups – something is different and better about their foundation.
When they succeed, they don’t just create generational wealth for the founders and investors. Their founding employees make tons of money, too:
Lasting early employees (#1 to #100) at Google, Stripe, and Facebook made $10,000,000+ each, and some much more than that.
So, how do you pick which startup to join?
If you’ve decided that you want to join a startup, it’s critical that you pick the right startup to join.
Most startups fail, but the few that really succeed create massive amounts of wealth.
Don’t start with the startups that happen to have open roles and job descriptions matching your skill set.
Instead, pick which startup you feel most excited about and confident in using the below process. Then reach out to them.
The best startups are always hiring excellent people who are passionate about their mission, regardless of what open roles they have posted.
How do you evaluate startups? Think like an investor.
Except rather than money, you’re investing your most valuable resource – time – in making that company successful. So it’s important to pick the right team and the right market.
Unlike a startup investor, though, you only earn equity in one company at a time.
So it’s important to be especially thoughtful in your decision-making.
The best investors tend to make investing decisions based on two things:
So, how do you evaluate startup founders like a top investor?
“Startups become the team they build, not the plan they make.” - Vinod Khosla (Founder, Khosla Ventures – investor in Square, DoorDash, and Stripe)
Since founders are only as good as the team they are able to attract, it’s important to start here.
Then, look for certain traits in the founders.
Here’s the criteria that the #1 early stage startup investor of all time (YC) uses:
Kyle Norton, the first sales leader at League and Owner, had this wise advice to share:
“It’s worth emphasizing just HOW great a founder needs to be. There are tons of smart people starting companies (especially in this bull market) but the big winners are going to be with founders that are the best of the BEST. People (particularly early career folks) are too easily impressed because they don’t fully understand just how high the bar is.”
You can evaluate a person’s determination by learning more about their life story.
Some questions that I like to use:
While I’m thinking and taking notes on:
As you’re listening, it’s also important to listen for strong communicators.
Sam Altman (formerly president at Y Combinator and legendary startup investor) found that one of the most predictive traits in founders is being a strong communicator.
As the founder is speaking:
Finally, in evaluating founding teams, it’s important to pay attention to the dynamic on the leadership team. Alignment of cofounders is critical. Infighting between cofounders is one of the leading causes of death for startups, and one that can often be predicted from the outside.
If the founder is solo, it’s important to remember that single founders can work (Jeff Bezos, Amazon), but it’s almost always better to have two to three cofounders who are each really strong with complementary skill sets.
Then, study their relationships between each other:
There’s one other factor related to the team to consider: alumni network.
Naval Ravikant famously said:
“For someone who's early in their career—and maybe even later—that the single most important thing about a company is the alumni network you're going to build. Who are you going to work with, and what are those people going to go on to do?”
When you join a startup, you establish a network of people that you can continue to work with throughout your career. People who joined the right teams, like the early team at PayPal, continued to work together in subsequent projects and they all got rich as a result.
After PayPal, that team went on to start and fund over 20 multi-billion dollar companies together, as shown in the below infographic.
Of course, it’s also important that you feel that you fit in with the company. Peter Thiel, one of the heads of the PayPal mafia, has described the company culture at PayPal as one of extreme hard work and dedication. The team was comprised of people who were outsiders in Silicon Valley and determined to prove themselves. They were mostly entrepreneurs at heart, even if they didn’t have the title of cofounder. It was their alignment in values and cult-like dedication which led to the company succeeding against the odds.
People aside, there’s one more important thing to consider in joining a startup.
Evaluating the founder and team is important, but just as important is making sure the market that the startup is building for can create a major success.
Andy Rachleff, cofounder of Wealthfront and Benchmark, has a saying…
“When a great team meets a lousy market, market wins. When a lousy team meets a great market, market wins. When a great team meets a great market, something special happens.”
So, what makes a great market?
Either…
a) The market is already large ($10b+ in annual revenue) and ripe for disruption.
The easiest markets to take are the ones that are already large but where no existing company has over 50% market share – because it means that the winner-take-all effect of software companies (which later blocks competitors from entering) hasn’t yet set in.
Flexport is in this category:
Or, ideally…
b) The market is currently small, but will be very large in the future.
Is this market small right now, but growing exponentially with massive potential?
Google is in this category:
In some cases, a market is and will always be small – but a product that can be built for it can grow to consume other adjacent markets.
PayPal is in this category:
Sometimes, you can even see a network effect kicking in to a company’s product in the future, which is a massive contributor to future growth and defensibility.
When a company in this market gets massive, does it have a network effect?
A network effect is when each additional user increases the value for other users.
Facebook is in this category. Each person that joins and uses the product makes it more valuable for others by producing content and engaging.
So, once you've decided you want to join a startup and have an idea of the type of startup you want to join, how do you get your dream job there?
That's what the next part of this guide is about. How To Join and Succeed at a Startup. Click Read Next to start there.
Below is the cheat sheet for this entire handbook. It's the same as the one on the previous page.
If you enter your email below, the cheat sheet is emailed to you so you can easily reference it in your inbox.
Co-founder and CEO at Owner.com, helping restaurant owners save their businesses. high school dropout but lifelong student. Thiel Fellow. Forbes 30 Under 30.
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