Were you unable to attend Transform 2022? Check out all of the summit sessions in our on-demand library now! Watch here.
I have always loved technology and entrepreneurship. After grad school and a stint as an engineer at Microsoft, I couldn’t wait to build my own company. There was just one problem: Having never worked at a startup, I wasn’t entirely sure what to do. Even though the company I founded was ultimately successful, I could have avoided a messy middle had I trained at someone else’s startup before creating my own.
As a two-time founder and early stage investor, I wholeheartedly encourage entrepreneurs to build their dreams. But as part of that equation, I advise them to think critically about when to build. Founders who feel ready to take the entrepreneurial plunge or who face market-related time pressures should typically start building right away. My advice is quite different for aspiring entrepreneurs who (much like my younger self) aren’t quite sure where to begin. For them, learning to swim before diving head-first into entrepreneurship’s deep end is an investment in their future. For them, the ultimate founder bootcamp is another person’s startup. Here’s why:
1. Startups are ripe with learning opportunities. Given the dynamic nature of startups, each day presents opportunities to learn. Flat organizational structures enable employees at all levels to gain visibility into functions they’d never have access to within large companies. Startup employees learn everything from the logistics of ordering group lunches to the operational tasks associated with launching products and getting sales teams up and running. In fact, even if the startups’ founders are inexperienced themselves and prone to mistakes, their mistakes provide even more learning — on someone else’s dime.
2. Everyone levels up in startups, where titles don’t matter but scrappiness, initiative, and resourcefulness reign supreme. Startups by nature require employees to make sense of ambiguity, identify unstated needs, and proactively hustle to address them. Instead of climbing a corporate ladder, startup employees master a jungle gym of skills, constantly moving up, down, and side to side as situations demand. Employees have the opportunity — and indeed the obligation — to operate several levels above their experience levels. It’s equivalent to running a few miles per day before attempting the Boston Marathon – reaching the end will still be hard, but at least there’s a fighting chance at success.
3. Early startup employees get a free pass if the startup fails, but also a right to claim some ownership if it succeeds. No one will blame someone working in a startup for its failure, but startups that succeed provide a halo effect that can make it easier for former employees to recruit future teammates, cofounders, and investors. Simply put: Working in a startup early in one’s entrepreneurial career provides minimal risk with the potential for substantial upside.
4. Startups are a great place to test out future co-founders and teammates. Startups are so intense that employees connect deeply on highly relevant levels. They quickly learn that friends don’t always work well together, and the best co-workers aren’t always friends. Working with someone 20 hours a day through intense highs and lows and seeing how they – and you as a team — navigate those swings provides the ultimate litmus test of potential co-founders and teammates. On a related note, startup experience increases hiring expertise. Employees see how candidates present themselves in interviews versus how they operate as colleagues and learn to translate that into the kind of hiring acumen that can make or break an early venture.
5. Startups provide an in-road to potential investors. In my second startup, I hired someone who told me he wanted to start a company. I told him to come work for me first and learn on my time. Eighteen months later when he left to build a company, I invested in it and helped him find additional investors. Working in a startup, especially one backed by well-regarded investors, can greatly expand entrepreneurial networks, including access to investors, partners, customers and advisors. Employees who rise to the executive ranks or do especially well at venture-backed startups enjoy an advantage when fundraising for their own startups. Many venture firms (including my own) pay special attention to startups founded by former portfolio employees.
6. Exposure creates the best environment for new ideas. Many of the best ideas are inspired by people’s work experiences, especially in B2B and enterprise marketplaces. We’ve often found this within our own portfolio and have also seen this play out in the public markets. Companies like Salesforce, Adobe, and Cloudera were all started by founders who recognized market needs by working in enterprise ecosystems and living the gaps.
7. Startups provide opportunities to test out corporate cultures. Corporate culture is of critical importance, yet it often only receives thoughtful attention after things go awry. In part that’s because culture is too challenging and intangible to comprehend through books or theoretical contexts alone. The best way to learn about startup corporate culture (which differs vastly from large company corporate culture) is to try a few on for size. Direct exposure makes it easier to assess what works, when, and why for various teams and at different stages in a company’s lifecycle, and it makes it easier to think critically about the practices and values that should be established from a company’s outset while culture is still malleable and easy to change.
After investing in many early stage companies and founding two, I can attest to the value of startup work experience. There’s simply no comparison between my skills as a first-time entrepreneur and a seasoned startup operator. Aspiring entrepreneurs interested in joining promising startups can check out job listings posted on notable venture firms’ websites or go directly to job listing platforms like VentureLoop, which lists jobs at more than 4,000 venture-backed companies. To all the would-be founders out there wondering how to get started, I offer this advice: Go build your dream — but consider working at a startup first.
Schwark Satyavolu is a general partner with Trinity Ventures. A serial entrepreneur and inventor with 15 patents, He co-founded the fintech companies Yodlee (acquired by Envestnet) and Truaxis (acquired by Mastercard) and served as an executive at Mastercard and LifeLock before joining Trinity Ventures. Today, he brings his entrepreneurial and broad operational experience to early stage investments in fintech, AI, and cloud infrastructure startups.
VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Discover our Briefings.