Thursday, March 26, 2015

Career Decisions

Whenever you make a decision on what step to take next in your career[1], I think it is worth considering the following factors.  Depending on your stage of life or career, different factors become more or less important[2].

FACTORS TO OVERWEIGHT
1. Network.
I view this as the most important thing to optimize for in a job.  Network includes both who you work with, and for, day to day.  But equally important, who are the network of people at and around the company (founders, employees, investors, advisors, etc.)?

In Silicon Valley networks of people work together repeatedly.  If you fall in with the right crowd, you will have outsized opportunities over time.  Being part of the original PayPal network exposed you to companies like LinkedIn, Yelp, Tesla, SpaceX, and Facebook.  Similarly, ex-Googlers are now senior executives or VCs involved with the top companies in Silicon Valley (Facebook, Sequoia, Dropbox, Pinterest, etc.).  People who were early at Google now know people at every major company in Silicon Vally.

The people who invested in, partner with, or advise the company you join may get to know you over time and impact your career in large ways.

Falling into the right network early on usually means a career full of interesting opportunities.  I would overweight this factor as well as market/growth rate below.

2. Market & Growth Rate.
Early in your career the market trend you ride may be the biggest future determinant for your success.  Joining a company in a great market means there will be tons of companies who want to hire you, and many high growth opportunities within your own company or across other companies in the same market.  People went from Netscape to Google, from Google to Facebook, and now from Facebook to other leading Internet companies.  In contrast, people who joined telecom equipment companies in the 90's are best case still at Cisco (if they are lucky).  Choose your market wisely.

Similarly, only go to companies where you expect a good growth rate over time.  Compounding growth creates new opportunities within the company itself, but also means the company is in a good market.

Genomics is a good example of a market today with great growth potential ahead of it.

3. Optionality.
Have you been doing the same type of job in the exact same industry over and over again?  Or can you find a role that sets you up for something new?

What are the new sets of future roles this job sets you up for?  Could you work in a new market (e.g. shift from enterprise to consumer or vice versa) or new role (can you work on the product team instead of operations)?  People dramatically underweight optionality and tend to stick to doing the same thing over and over.  This becomes more important later in your career.

4. Brand.
The branding of a company matters mainly if you have never had a name brand on your resume.  If you went to MIT and then worked as an engineer at Google, people will assume you are a great engineer.  The institutions reputation will rub off on you.  Once you have 1-2 brands, each subsequent brand is less important and I would optimize for the other factors above.

FACTORS THAT DONT MATTER AS MUCH AS YOU THINK
1. Role.
What will you be doing day to day?  What will you be learning?  Early in your career, you should optimize for going to a high growth early stage company rather than the exact role you could get.

E.g. if I wanted to be a product manager but could only get hired on the operations team at Stripe, I would still join Stripe as an operations manager over a low growth company as a PM.  As a company expands and scales quickly, you will be given opportunities to move around or try new roles.  It may take a year or two, but if you persist you will transfer over to the product team.

Alternatively, if you are really set on a specific role or function you may want to join only a handful of companies who do it well.  In this case you are optimizing learning about a role over growth opportunities.  For example, Google and Facebook are probably the two best places to learn how to be a great product manager.  But it is unlikely you will become VP of Product at Google 4 years out of school.  In contrast, if you join a startup you may end up with a role larger then your experience level if the company does well.

If I wanted to join a rocket ship company, I would underweight exact role and overweight getting in early.  If I wanted top optimize for role, I would join the company that does that role the best.

2. Compensation.
This is the least important factor to consider.  It is probably the one people focus on most.  However, owning 1% of a crappy company instead of 0.1% of a great company is the wrong way to look at things.  The crappy company equity may literally be worth nothing.  Companies wipe their cap table more then you think.  In contrast, the great company may be worth 1000X more.

In general, I would trade equity for cash unless I really needed the cash.  While salaries tend to go up over time if a company does well, it is much harder to get substantial equity later.

If I had to choose to go to a great company with (what seems like) average compensation or a poor company with (what seems like) great compensation, I would join the great company instead.  The equity value should increase over time for the great company, and drop for the poor company.  Even if you make a lot of short term cash, you will miss out on the future network and branding factors mentioned above.

In contrast, at the great company, your cash compensation will also go up over time as the great company succeeds.  Google used to be a cash-poor, equity-rich company.  Now it pays above market cash or cash equivalents (RSUs).  Google effectively shifted from an equity to cash company over time, as break out companies tend to do.

Don't get me wrong - money is important and the ability to pay the rent and not constantly worry about your financial position is crucial.  I would just think long term about it, and also realize that salaries typically go up to market (and eventually exceed market) at the companies that do best.

Like a startup, it is best to think of your own career as a long term thing, rather then a set of short term increments.

BONUS POINTS 
If you plan to work in tech, move to Silicon Valley.  The set of opportunities and networks out here are much stronger.  If you do not go to Silicon Valley, go to New York.

International market experience can be beneficial in your career if you plan to be in a business role and want to primarily join late stage companies.  This is a good back door into certain high growth companies where you might not otherwise fit.

Notes
[1] This post assumes you have decided to join, rather then start, a company.  I think the decision to start a company or not is outside of the above framework.  The framework is meant to help someone who wants to join an existing company and is biased towards people early in their careers.

[2] Certain things become increasingly important as you have kids, you help family members face illness or other problems, or other life events happen.  For some people the ideal job is largely about flexibility, proximity to family or home, or other factors not mentioned above.  These factors can be crucial to a person's life and happiness, and my intention is not to underweight them.  If you want to e.g. be close to a sick relative, a lot of the other items above may become irrelevant.

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