Very comprehensive overview. At the end of the day, your investment of time/effort into any new startup should be evaluated with a similar risk/return ratio as any other potential investment.
This is a great framework. I get asked about joining startups all the time...
But I NEVER recommend my path (employee #6 of a company that became a $2B public co).
It's not reliable and there is even greater survival risk for early employees than founders (i.e. you are discarded more easily).
I also believe there is far greater variability in how to survive/thrive across multiple stages of a company. It's not just one-startup-experience, there are many layers.
Great writeup, Dan. When it comes to non-linearity, it’s also worth putting PMF in that bucket.
It’s easy to perceive that pre/post PMF is a milestone or stage to hit. But it’s also something that needs to be sustained durably (esp as you solve for Scaling risks).
Excellent analysis, Dan. It makes a lot of sense. I really appreciate how you explain the technology risk and its re-emerging importance.
That being said, a meaningful technology risk is reserved only for cutting edge companies. Most startups are not those. The risk for them from day one is the market risk.
This is why, I'd place the market risk as the most important (and highest) at the pre-seed and seed stage. It continues on through Series A but it doesn't gain dominance there.
I really enjoyed this read! The longevity and success of a business is especially important for potential employees, as, unlike investors, there is no opportunity to diversify the risk of the investment of a full-time career.
Excellent summary. It's so helpful to see how so many commonly used terms (product market fit, Helmer's 7 powers, payback periods, etc.) fit together in one framework.
Very comprehensive overview. At the end of the day, your investment of time/effort into any new startup should be evaluated with a similar risk/return ratio as any other potential investment.
Exactly. Candidates actually have to take more concentrated and thus risky bets than investors.
This is a great framework. I get asked about joining startups all the time...
But I NEVER recommend my path (employee #6 of a company that became a $2B public co).
It's not reliable and there is even greater survival risk for early employees than founders (i.e. you are discarded more easily).
I also believe there is far greater variability in how to survive/thrive across multiple stages of a company. It's not just one-startup-experience, there are many layers.
I've written about how the wrong company stage will crush you: https://newsletter.thewayofwork.com/p/stage-fright
It’s impressive that you resist recommending a path based on your own survivorship bias
This.
If you're not an adrenaline junkie, ask yourself if we get aquired, is my position one of the aquired assets or a superfluous cost?
Negotiate accordingly.
And why I shouldn't post right before bed.
I can actually spell "acquire."
🤣
Great writeup, Dan. When it comes to non-linearity, it’s also worth putting PMF in that bucket.
It’s easy to perceive that pre/post PMF is a milestone or stage to hit. But it’s also something that needs to be sustained durably (esp as you solve for Scaling risks).
This was great Dan! Thanks for sharing.
Glad to hear it!
Excellent analysis, Dan. It makes a lot of sense. I really appreciate how you explain the technology risk and its re-emerging importance.
That being said, a meaningful technology risk is reserved only for cutting edge companies. Most startups are not those. The risk for them from day one is the market risk.
This is why, I'd place the market risk as the most important (and highest) at the pre-seed and seed stage. It continues on through Series A but it doesn't gain dominance there.
Thank you again for writing this!
Agree that market risk is most important at early stages for most companies. Tech risk is coming back for AI companies!
I really enjoyed this read! The longevity and success of a business is especially important for potential employees, as, unlike investors, there is no opportunity to diversify the risk of the investment of a full-time career.
Excellent summary. It's so helpful to see how so many commonly used terms (product market fit, Helmer's 7 powers, payback periods, etc.) fit together in one framework.