The first five employees
Read time: 3 minutes.
The main figures of the startup ecosystem are founders and investors. The incentives are not always aligned, and sometimes there is a notable lack of gratitude. But, for the most part, it’s a symbiotic relationship. Founders benefit from capital, and VCs need access to the best companies to deploy their funds. The upside for founders is huge. Best founders are strong believers and are fully committed to fulfilling their vision. If they succeed, they will create wealth. Risk-adjusted though, VCs have a higher chance of making a lot of money due to diversification. However, there is a third element in the ecosystem that is often forgotten but essential for the success of the startups: the first 5-10 employees.
It’s easy to accept an offer from a rocketship or a Fortune 500 company. Stability, good salary, benefits, and well-established processes. Your friends and family will be proud of you, particularly if you are working on a product they consume daily. Now, imagine telling your parents or spouse that you’ve decided to become the first employee of an unknown startup. The company might not have customers, office space, or even a product. Who in their right mind would choose this option? Why would you trade all the corporate perks for the instability and craziness of the startup life? What is the motivation for following the founders in their uncertain journey?
Don’t take me wrong, every single employee in a startup is extremely important. But the risk decreases as the headcount grows. The early successes and failures of the company are directly related to the performance of the first employees. Their impact at this stage is maximum. They will dramatically contribute to shaping the culture of the company. They will inspire future employees and even the founders.
The real motivations vary. Some people have a strong connection with the mission/problem. Others want to work on impactful tasks. It could also be the learning experience, or the desire to work closely with the founders to eventually start a company. Truth be told, people who choose this path must be a little bit crazy, romantic, or a combination of both. But they are true believers, as much as the founders or the investors. And sometimes, only sometimes, they end up winning the startup lottery.
The goal of this post is not to convince you of the advantages of joining an early-stage startup. In fact, I don’t think that is good advice. That is a decision you need to make for yourself, and frankly, not everybody should do it (the same way not everybody should start their own company). Most people will be happier with the immediate compensation and stability of a bigger company. Startups can be an incredible experience. It was for me, as it helped me prepare to become a founder. But it can also go terribly wrong. You need to consider your options carefully.
The real reason why I wanted to reflect on this topic was to pay homage to the first employees. The people that still go for it, even when it doesn’t seem rational. They are the unsung heroes of the startup world. They wear multiple hats, leave their comfort zones constantly, and work hard to build the foundations of new products. As a founder, there is nothing more motivating than seeing talented people caring so much about my stupid idea, particularly when things are not going great. These people are dedicating their most valuable resource, their time, to work on my project of all the others. They made a bet. Founders have the responsibility to make it worthwhile and always be thankful.
From the bottom of my heart, thank you César, Fon, Ryan, Tony, and David. It’s been a real honor working with you and I will be forever grateful you chose RevenueCat and gave us this opportunity.
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