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9 facts to beware of before joining a Startup!

Driving BookMEDS.com, an Online Pharmacy, for an year now and co-leading Headstart's Hyderabad chapter for over 2 years.

Let's get on this straight away. No BS.

1) You are not going to be the chosen one!

95% of Startups fail. This is true. Of the 5% which succeed, more than 85% end up as acquisition targets by large companies. Guess where you are going to be positioned in the hierarchy.

In initial days, all startups take up underdogs and hustlers to grow crazy. After series A, founders tend to stabilize overall operations and structure. They get top profiles on board. So if you think you are going to be at a VP / CXO position for the young startup which you are giving your heart and soul, am sorry but you are going to be positioned much lower in the hierarchy. This is true not only for Indian startups but all across world. Ill give two examples to show this.

I) Lazada is South East Asia's largest eCommerce company with over 5000 employees. Sara joined company as one of its first employees 4 years ago, handling logistics. Today, he is regional warehouse manager while Divyanshu is VP - Logistics for Lazada, Malaysia, joined recently. He is ISB guy with heavy experience from Flipkart.

II) 1mg raised series B of $100 Million some time back. Check profile of Piyush Dahiya who is heading order fulfillment. Mind you 1mg has multiple subsidiaries and tens of verticals within each one of them. Piyush is not at a CXO position, just head of one verticals key position.

The point here is as a company grows big, all key structure is set up by IIM Lean 6 Sigma certified guys and you will have to get adjusted in the hierarchy. And yes, wen structure comes into pace, your compensation is set as per the flat pay scale structure set across the company.

2) ESOP's

If you are joining a funded startup, remember the board needs to approve you for ESOP's entitlement. Either you need to have kick ass background or else would need to be intellectually (read as from top institutes) benefited to get ESOP's. Please bargain on ESOP's / stocks before joining the startup. Also, clearly understand the ESOP structure of the company and its vesting clauses before taking it. 

3) Low EQ of Founders

Most founders are not good at dealing with pressure and have very low empathy. They do not feel obliged for you working over time. All they care is results. Its very common to be subjected to market shitty products and founder freaking out when you say it's not working out.

4) Fair Compensation

Startup Founders are the best story-tellers, ever! Mind you, these guys can even sell MLM based Ponzi schemes to you by showing you future. Most startup employees are told to deliver more for less. I have seen employees passionately working for up to 100 hrs a week (yes, even on weekends!). Fair compensation? The bubble has burst and startups are not going to pay any fancy salaries. Most of them are going through extreme financial crunches. So joining a startup is fun till you hit harsh reality. 

5) Fair Contracts:

Most startups I have come across do not have any formal contracts. The offer letters and documents you sign up with them, none of them are legally binding. None of them have any PF or taxation processes in place, forget about health benefits, insurance plans etc.

6) No Community for Startup employees:

Why did roadrunnr team barge into its office and terrorize the founders? What happened to PepperTap team after it closed down its operations? There are hundreds of networking events for founders. Government tries to support them. But have you ever come across a group focused on networking of startup employees? The team size might be small, agreed. But why not have an association of startup employees where the association takes care of startup employees' concerns and issues?

7) Career growth:

Most startup employees end up doing work they don't intend to. I know many people who joined for a technical role. Since startup couldn't spend on their personal growth, founders asked them to take up operational roles. This is huge in ecosystem out there. So all your future plans depends on the decision of board. And since employees do not have high risk appetite and are bound with social pressure, there is nothing much they can do.

8) Pressure to grow

Success manta for a startup is to identify 6-7 key KPI's and grow month on month by 18-23% on these. To do this, startup founders want people who can grow their personal self on a month on month basis. So if you are looking for Infosys type of training of 6 months etc, forget it. You need to start delivering from day 1.

9) For Drop-outs

Hope this comment of mine on a post where the guy dropped out sums it all..


All the above 9 points are based on my personal observation. Startups do provide great opportunities. I joined BookMEDS.com last year in December as an intern. Today am leading many verticals. Driving product, design, operations and almost have same privileges like the founders except the financials, obviously. On a personal level, I have taken up design and now churning good Visual designs for Headstart (Voluntarily) and also doing UI/UX design for our new product. They have sent me to an accelerator program in Malaysia where am being mentored and working with some who is who in industry. My opportunity cost as a person has definitely increased exponentially. But I never cared for money. I worked for learning and growing myself and the startup. Am still an employee of the company, but hustler at heart to make this ship sail.

Hamad Jowher

Disclaimer: 1mg and Lazada are generic examples to show reality of startups. This post doesn't intend to offend the mentioned profiles nor promotes the associated Startup. 

This is a YourStory community post, written by one of our readers.The images and content in this post belong to their respective owners. If you feel that any content posted here is a violation of your copyright, please write to us at mystory@yourstory.com and we will take it down. There has been no commercial exchange by YourStory for the publication of this article.
Driving BookMEDS.com, an Online Pharmacy, for an year now and co-leading Headstart's Hyderabad chapter for over 2 years.

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