Start-up job warrants hard look Risky: Signing on with a brand-new company could be a career boon, but it's more likely to be a financial bust.


Signing on to work at a start-up company is a lot like buying shares in a business with no track record. It can turn out to be a boon, but it's much more likely to be a financial bust.

One of my fondest work experiences is the year that I spent on staff at a brand-new magazine. Never before -- or since -- have I been surrounded by so many talented, dynamic co-workers pulling together for a common goal. The publication has since folded, but the ambitious projects we did there helped most of us move on to better jobs. Eight years later, a number of us are still friends.

The major downside was the intensity of the work environment. There was constant pressure to produce, but little training. We toiled until almost midnight at least two nights every week. Those who didn't measure up were soon fired. Many a Monday we'd notice that a desk had apparently been cleaned out after the routine Friday afternoon hatchet-job.

These can be classic occurrences at a new venture, and job hunters need to consider them before rushing to work at a company that's less than 4 years old.

Some start-ups are willing to hire career-changers with little or no experience. Others appreciate the knowledge and know-how of people who feel "used up" at large corporations. But be ready to take the good with the bad. Here are some factors to weigh:

Short-term pain. If you like having clear directions, plenty of feedback, and a precise list of job responsibilities, a start-up's definitely not for you. To some extent, the company owners are still trying to figure out how to succeed. You may get mixed messages about what they want, be pulled off one assignment to follow a completely different tack, or wind up wearing more hats than you ever imagined.

Because your bosses (rightly or wrongly) expect you to care as much about the company as they do, they won't take kindly to complaints. And let's hope the chemistry's good. Disagreements about the right strategies for a fledgling operation can tax even the best relationships.

Another adjustment is working for an unknown. If you've come from a name-brand company, you'll probably miss the prestige. Suddenly, you have to give a mini-history of the company every time you introduce yourself to a new client or customer. Other contacts might pay less attention to you or take longer to return phone calls.

On the financial side, you may need to take a temporary pay cut in exchange for the promise of future raises, bonuses, or stock options. Perhaps the company's too small to afford decent health benefits and too new to think about pension plans. In the worst-case scenario, there may be times when it has trouble meeting payroll.

Long-term gain. If the business does well, those shares you accepted in place of a higher salary could make you rich. But because the odds of that happening are slim, the job should offer career payoffs no matter what the company balance sheet. These include a chance to develop or expand your skills, build contacts, or learn how a new company works (in case you want to start your own some day).

Your tolerance for risk. The success rate of start-ups depends on whom you ask, but even by the most optimistic estimates, it's not as good as 50-50. No matter how much you believe in the company's product or service, those profits you're banking on may never materialize. In the beginning, most companies lose money, and you'd rather it not be yours.

It's a good idea to research the owners and find out who's backing them. Look at past successes or failures of the company founders and directors. Any reason to think the funding is likely to dry up?

Work at a start-up can be rich with challenges and psychic rewards. Just be sure it doesn't leave you broke.

Deborah Jacobs welcomes letters from readers and will address topics of general interest in this column. Contact her by e-mail ( or by letter at: Chronicle Features, 870 Market Street, Suite 1011, San Francisco, Calif., 94102. Please include your name, address and telephone number.

Pub Date: 8/25/96

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