Hiring & Talent, Startup Stories

Playing Startup

I’ve observed what may be an emerging trend, at least in some startups, that I find somewhat unsettling. It has an impact at an individual level, a company level, and an ecosystem level. This is not an easy topic to discuss without coming off like a jerk or a crusty old dude, so I wanted to share two quick stories about my own career below. But I think it’s important to discuss, particularly given today’s heady environment for startups.

My first startup job was as an early employee at PayPal, where I took a job at the end of ‘1999 and started a few months later in 2000. When I first started working there, I only made it home for dinner with my cohabiting girlfriend (now wife) probably 3-5 times a month. I worked, usually at the office not remotely, at least part of every weekend for the first year or so.

I started off as a product manager and while I never actually slept over at the office, there were frequently late nights. One of my fellow PMs did sleep routinely under his desk in a sleeping bag he kept there for that purpose. On multiple occasions I’d get in to the office in the morning and find our CEO (Elon Musk at the time) asleep on the couch in our little product team lounge from the night before. The company held holiday parties at the end of each year and lots of friendships were spawned from work collaborations. But the first real time we had a big celebration and folks felt like we’d “made it” was the party we held in the parking lot on February 14, 2002 when PayPal went public. We were a profitable company at that point with nearly $200M annualized revenue, one of the first tech companies to IPO after the dot-com bubble.

When we started LinkedIn, it was a similar situation. As a founding team we were a reasonably experienced and close-knit group already. Nearly all of us had worked with Reid Hoffman at either PayPal or SocialNet before so there was zero concept of “face time” or having to establish trust or work ethic with one another. We started working nights and weekends in late 2002 when some of the founding team were wrapping up their prior day jobs and then everybody was full time on LinkedIn by January 2003. Yet absent a family obligation or something similar, nobody left until 7, 8, 9pm, or later even though we were too cheap to provide dinner for employees back then in the early days.

My point and the trend I’ve noticed and felt we should start discussing more publicly: I fear a meaningful number of people are “playing startup” today.

Paul Graham used this phrase in an essay, albeit making a slightly different point. What I mean is that people are joining startups because working in a startup seems cool or lucrative, not because they want to change the world and they’re fundamentally committed to putting in all the blood, sweat, and tears that entails. We’re hearing more about people new to startups asking their seed stage company how many months of severance is included in their package. We see co-working spaces where the ratio of work to non-work (ping pong, beer, startup talks, etc) is pretty low, while elsewhere founders enamored with the lifestyle or perception of being an entrepreneur, believing they’ve made it once their company raises a Series B. Entire startups exude a rah-rah environment during the all hands, and then at 5:15pm the office is a ghost town (even though everybody rolled in after 10am).

FWIW I do firmly believe that everyone deserves and should work towards finding work + life harmony as Brad Feld has described it. The reality is a startup career path entails a variety of sacrifices, but I don’t believe it should preclude a rich family life, involvement in one’s community, or otherwise seeking a well-rounded human existence. And even when working hard, there should always be moments of fun and close relationships that are formed from working in startups. Back in the early PayPal days Jeremy Stoppelman and I used to go hit golf balls during lunchtime at the Palo Alto muni driving range across the street from our office on Embarcadero Rd, which was a nice break in a long day and helped form a long-lasting friendship.

Additionally, a lot of people today work in startups or want to work in startups or want to be founders, which overall is a great thing. A lot more companies get started today than 10 or 20 years ago, which overall is a great thing. And a lot of big, meaningful companies have been created just in the last couple years which is nearly unprecedented.

But I’ve witnessed more and more “playing startup” in recent months. And to be clear I split my time between Boston, New York, and SF and I’ve seen this across a broad swath of startups and individuals… both outside NextView’s portfolio and occasionally within it.

So why should I or we collectively care? Because while lots of startups will fail in spite of the hard work and zealous commitment of the whole team, pretty much none succeed without it.

I’d like to think that I worked hard, but I was probably in the middle of the distribution of my colleagues at both PayPal and LinkedIn in terms of work ethic… neither the slacker nor the hardest worker. More important than simply hours worked though, I perceived a zeal in my colleagues that translated into an overwhelming commitment in each of them to do whatever they could to incrementally drive our company closer to success. It motivated me to do the same. In addition we all realized that failure is always an option, success is hard won, and recognized the difference between progress towards a goal and achievement of that goal. So we acted accordingly.

I don’t always see that today unfortunately. At times I see of sense of entitlement when perhaps it’s not merited. I see a lack of commitment and hard work, especially when the work isn’t fun but is still of critical importance. I see people taking their eye off the ball when it’s still in midair or worse, not having a clue which of the juggling balls actually matter.

To be clear I don’t want to paint all employees, founders, and startups with a broad brush. I still think most of the startup ecosystem has a healthy attitude, focus, and commitment to the unique challenges of throwing yourself off a cliff and assembling an airplane on the way down (as Reid describes the startup experience). A few months back I saw a founder/CEO with nearly all of his ~100 person SaaS company hard at work, closing their final deal of 2014 at 11:00pm New Years Eve. Last fall I saw a startup with it’s back against the wall, days from shutting down, pull off a new financing round and what looks to be a promising pivot. And just the other weekend I bumped into a founder hard at work on a Sunday afternoon when I stopped by my office building. I still see lots of things which give me reassurance even as I see some things that give me serious concern.

Perhaps it’s just a symptom of where we are in the cycle. But there’s still a lot of “playing startup” going on. I commit myself to help however I can to foster and support the true commitment of entrepreneurship in my small corner of the startup world. But let’s start the dialogue of what we do from here.

Editor’s note: This post originally appeared on Lee’s personal blog, Agile VC. Hear the story of Lee’s time at PayPal and LinkedIn in this episode of the NextView podcast, Traction.

Lee Hower

I’m an investor, entrepreneur, and helper of technology startups. I’m currently a General Partner of NextView Ventures, which focuses on seed stage internet-enabled businesses. I co-founded NextView in 2010 with my partners Rob Go and David Beisel. I started in the VC business as a Principal at Point Judith Capital, an early-stage firm. I joined PJC in 2005 and served as a Principal at the firm through early 2010. During this time I co-led investments in FanIQ, Sittercity, and Multiply and sourced investments in Music Nation and NABsys. Prior to becoming a VC, I was a startup guy myself. I was part of the founding team of LinkedIn, and served as Director of Corporate Development from the company’s inception through our early growth phases. Before that I was an early employee at PayPal, and worked in product management and corporate development roles through the company’s IPO in 2002 and subsequent sale to eBay later that year. I went to college at UPenn and received degrees from both the School of Engineering and Wharton School of Business.

    • Paul Reid

      Great post so true

    • Lauren Musto

      Interesting article and I can see why you were unsure of how it would be received.

      What I heard was that a lot of people who found/work at early stage companies today project an air of entitlement while not working as hard as you think is necessary to be successful, based on your experience at LinkedIn and PayPal. Did I get that right?

      If so, this is reminiscent of the broader criticism about Millennials… many of whom are likely the people you’re talking about. This attitude not only exists in startups but in corporate settings and beyond, and I think the romanticism that the media and shows like Silicon Valley creates about startups perpetuates the idea that startups are a good fit for people who want to exclusively do work that is “fun” and “meaningful” and if it doesn’t work out that way just move on to the next. :-/

      • Thanks Lauren. My main point was to raise the signal flag here and start a discussion, so I appreciate the feedback here, on Twitter, etc to the post. So appreciate your question and feedback here.

        My main point isn’t simply about a sense of entitlement or saying everybody needs to work harder or longer hours. Based on my experience as a startup employee and entrepreneur, and based on what I’m witnessing today, I’m at times troubled by the culture which pervades some startups and some founders and employees in the ecosystem. There is a commitment level that I find lacking in this minority… which at times translates into a sense of entitlement, diminished work ethic, and all the other symptoms I noted.

        FWIW I’ve seen this kind of attitude not just in millenials but in startup employees and founders from other generational cohorts. It’s undoubtedly true millenials have a variety of different perspectives and values about work than other generational cohorts. But this isn’t simply a “millenials should work harder” sentiment. It’s that “playing startup” is a concern at an individual, company, and ecosystem level and one that we should all think about how to change.

    • Great post. I think it is quite true, yet it has often been quite true.

      You had the benefit of working at successful startups and perhaps not seeing as many other companies while you focused on growing those companies. Now, as you are out seeing more companies, you are also seeing the ones that fail.

      What I see that is different today is that it is easier to “play startup” because there is more capital available and less infrastructure required.

    • You say “I do firmly believe that everyone deserves and should work towards finding work + life harmony” but it seems from the rest of the article that you think this needs to be earned. I’ve done sprints where I work 80 hours/week for a few weeks, but I feel any hours I work after 60 hours/week see increasingly diminished returns.

      1) Did you find that you were able to work those 80 hour weeks while still putting in quality hours?

      2) Do you think consistent 80 hour weeks are what it takes?

      • Hey Sam, I will let Lee answer from his perspective, but chiming in from an operator POV as someone who’s worked at a couple startups and now with them (at NextView): I don’t think (a) there’s a threshold of hours you need to work. I think some folks can do a lot with 40 that would take others 60. I don’t think clocking in X hours equals success.

        But (b) it doesn’t need to be earned so much as acknowledged that you’ll be a worse founder/builder with a good work/life balance. I have absolutely heard entrepreneurs say “Now that I have a kid, I am a worse entrepreneur.” I had a manager tell me once, it’s not work-life balance, it’s work-life compromise. I agree. If you want to/have to divide up your time, whereas spending a few more hours on a work project would tip it towards success, then you’ll be worse at that project. Ditto for if you’re trying to be a great parent but perpetually work late. We can come closer to “having it all” then ever before thanks to lifestyle-enabling tech + more awareness/dialogue around work/life, but I don’t believe you can actually have it all.

      • I don’t think this is a raw X hrs / week is the answer. It’s a level of commitment that’s engendered across the whole organization, which at times means long hours when there’s critical things that need to get done. Burn out is real and there are diminishing margins to all endeavors. But it also means consistently longer than average hours if you’re comparing yourself to someone who has a typical 40 hour work week.

        The reality is working in a startup or being a founder means some level of sacrifice in service to one’s professional goals. This is true of many career paths… being a brain surgeon or working on an oil rig in the middle of the ocean or being a starving artist.

        Lastly as I said I subscribe to the notion that the goal in one’s life and career should be to strive for work+life harmony. Brad Feld has talked and written far more extensively than I have on this. Harmony and balance are two different things… I don’t think one has to feel guilty if there are times when the balance of effort, emotion, or time tips towards “life” than “work” or vice versa. So my point is less that you have to toil relentlessly before one can “earn” work+life harmony, but rather the goal at all points in one’s career and life should be as much harmony as feasible rather than a “balance” in a raw accounting of hours.

        • Thanks for the response. I feel like there’s already a lot of pressure on founders to put in insane hours and, intended or not, reading your article felt like a confirmation that this is really what VCs expect of founders. I think your comment provides some important clarification.

    • Janet Aronica

      OMG yes. Thank you for making me feel normal with the description of your hours in the beginning. Sometimes there’s just a lot of work to do getting a thing off the ground. I feel like balancing short term execution and long term goals/strategy kinda just requires doing stuff in parallel… even if you are a focused founder. (I try to be!) And that just means a lot of work. Sometimes I feel like *I’M* the one in the wrong when I’m not wrapped up at 5:15. 🙂 Anyway, thanks for using your platform to call this out and tell it like it is.

      • Thanks Janet. Again I think it’s not just long hours = commitment… there’s a broader range of issues. But work ethic is definitely one.

    • Ben Wiener

      I enjoyed the post very much. I’ve been pitched by my share of “wantrepreneurs” vs those that really have a burning passion to build or change something… also glad to see the work/life balance stressed, b/c you don’t have to work through the night and weekend every week to be passionately committed to fixing the world and keeping customers happy.

    • Frank U

      I wonder if this is a product of you having greater exposure to entrepreneurs. When you were at PayPal, how many only companies did you know well? If you were a VC in 1999, I am sure you would have found plenty of entitlement. It just wasn’t obvious since you were locked into one firm.

      Also I think whenever these discussions come up the term “hard word” needs to defined. Going off the examples given, it seems that hard work = hours worked.

    • I have so many thoughts about this great post Lee. The most succinct way to summarize a true startup entrepreneur is something David Atwater said about how he chooses which candidates and campaigns to support. He says, “Most politicians get into that business because they want to be something. I only work for the ones who get into it because they want to do something.” Same goes for entrepreneurs. If you are forming the business entirely in your head, you won’t have the heart and passion to get through the tough spots.

      I think there is another thing going on: if you are founding a company in those critical years of also forming a life (usually 25-35) it’s going to be a terrible conflict with the enormous business demands. In contrast, an established marriage, household, and older kids can withstand your necessary years of “absence.” Trying to make all those things happen at the same time is just not reasonable. This is probably why the average age to found a company (broadly speaking) is 47. You’re smarter, faster, better, and you don’t have so many personal demands.

    • Great observations, though it doesn’t seem like a new problem. People who aren’t willing to roll up their sleeves and put in the work exist in every industry and country. More of them may be joining startups now that it’s so glamorous, but that’s unsurprising in this heady market. Someone seeking a fun, easy job would naturally be attracted to a company touting $160k starting salaries and a massage room.

      While the signal to noise ratio is worsening, it’s still up to VCs and entrepreneurs to weed out the good from the bad and make responsible decisions. Rather than chastising those playing startup, I think we should simply continue to empower those who aren’t. From what I’ve seen, NextView has done a great job of that so far.

    • Josh Forman

      Part of what defines a startup is the feeling of having your back up against the wall, and I think that’s what differentiates those who are “playing startup” versus those who aren’t. The risk profile for each actor has shifted dramatically to the detriment of the ecosystem.

      There are several changes feeding the increase in people who don’t feel that their backs are up against the wall:
      * Before acqui-hires were so common, if you didn’t get to your B you flamed out. So you hustled your ass to get to that B. Nowadays, if you don’t get that B round you can get a payday and a solid job at Facebook/Google/whatever. The risk of failure isn’t as great for founders.
      * Increasing valuations and the concomitant increase in money into the system means that startups pay market wages earlier in a company’s life. This reduces the risk to employees to join a startup even if they aren’t totally committed to the startup’s success.
      * It’s genuinely easier to create value than it was 10 years ago, making it easier to say to yourself “I’ll figure this out eventually” and making it easier to find a soft landing when you don’t.
      * The mean time to find a new job is very low given the health of the tech sector.

      At Inkling, Rob, Matt, and I always agreed that if we didn’t get to massive self-sustainability (e.g., to IPO and beyond), we’d failed. And we meant that in the deep and genuine way that’s common to real entrepreneurs.

      To be honest I think it’s ultimately on you, the investors, to serve as the gatekeepers here. The system dynamics are what they are — reduced risk means reduced quality in entrepreneurial spirit at the top of the funnel and a lack of harsh punishment for mediocrity.

      One of your first tests of an entrepreneur should be to sniff out true commitment to building not just a “unicorn” but an iconic, self-sustaining company that makes a genuine mark on society. If a founder takes money off the table and bails when the going gets tough (I’m not naming names here), there should be a very high bar to cross for that person to be let back into the arena.

    • Reem

      Hi Lee, I really like your title and I suspect what is bothering you, particularly as an investor, is you have to figure out which start-up teams truly want to change the world and which are ‘playing start-up’. This distinction is made harder by the trendiness of being an entrepreneur today. So many articles and organizations present entrepreneurship as the solution to every problem, it has attracted people who would otherwise have been rebuffed by the lifestyle you describe.
      I had such a moment last week, when I was talking with entrepreneurs who just want to sell their company for a few million. And I realized: no, I want to affect the maximum number of people possible, I want to make sure my company is changing the life of people across the world. My goal isn’t to get a million or two and walk away.
      I think the hours and lifestyle are just an expression of the fire burning within, they are not a litmus test. Jules Pieri makes an excellent point about lifestyle timing. I also waited till my kids were grown to start my own company, because having worked with start-ups in the ’90s, I knew I’d want to be “all in”. But it’s because I have teenagers that I found a mission I would be willing to devote a decade of my life to. So here’s another vote for mom start-up founders. My lifestyle enables my start-up, not the other way round.

    • Omeid

      This is a great summary of what makes hiring so difficult. It’s so hard to find people that understand what it means to be in a startup. Startups are the sexy thing to do…why join a large established business when you can join a startup and be cool?! I reached out to the Angel List team to ask them to start blogging about what it means to be an early hire at a startup because we were getting way too many applicants that want to join a startup, but also want to stop working at 6 or 7 pm.

      The hardest thing I’ve had to do was let two people go because they simply didn’t want to put in the right amount of effort in. No one wants to pay the price to truly be successful. The problem is many people define success as having a good salary and a job that allows them to have their ideal work-life balance, which as you pointed isn’t always aligned with what it takes for the startup to be successful. Then when it comes time to step up the effort they are upset because their $/hour is going down and because they’re not getting to go to that interesting meetup they want to go to.

      Now when we hire we tell potential hires what amount of effort it will take from them in order for the startup to be successful. We ask them to think about that and get back to us if they actually want us to consider them for the position. Sure, we lose interest from applicants, but if you can’t handle hearing about how tough it can be then you’re definitely not tough enough to make it through the tough periods.

    • Sam Toole

      Lee – Really enjoyed the post, a few thoughts and questions.

      As you point out working at a startup seems “cool and lucrative,” which often revolves around the individual company’s culture. In your post you suggest there is a mix of employees and founders “playing startup.” To that extent, how much of this less committed workforce is a direct reaction to the specific founder/company culture as opposed to the people working in it? And or, the inability to hire the right people?

      At Paypal and Linkedin it sounds like there was a deep commitment to each company, which lead to long hours. At the foundation of this was a founding team that instilled a zeal for the work and the company. I would imagine that when hiring new team members an affinity for the product, cultural fit, and commitment where all weighed heavily.

      So as new companies grow is it more about creating the correct culture and then translating it to potential employees? I.e. not hiring people looking for the “cool” job, but instead hiring people looking to build something great and willing to put in the time. To me, a lot of that sounds like expectation/value setting and correct hiring processes. Of course, not an easy thing to achieve, but certainly ways to do it. A classic example being Sapient…in the early years they compensated employees at a level below the industry average to ensure they believed in the company’s values and truly wanted to work there.

    • Lee, great points. The problem I see is that its has become trendy to own a “start up” or be an “entrepreneur”. I can’t tell you how many people I meet at co-working spaces who tell you that they are a startup or entrepreneur….even though they have a consulting/service company or a lifestyle business. Too many people have seen shark tank and silicon valley and are jumping on the start up band-wagon. Sadly it has become a cultural buzz word.

      In reality being in a “startup” is its own culture and lifestyle. I can’t tell you how many young entrepreneurs i have talked too that do not understand that. Being a co-founder is not just about the caché or the glory – Its a 24/7 investment on your own part and its up to each entrepreneur to find the work + life balance that works for them.

      Now to work on my pitch I hear Hooli is looking for ideas…

    • David Cooperstein

      Great article Lee. Having worked for two start ups and advised a number of others, the work ethic of the leadership team is probably the most important part of this discussion. If Elon Musk is sleeping on his couch at Paypal, that sets a tone for what needs to get done and when to do it. It the leaders are blasé about the challenges, people won’t contribute. This doesn’t mean # of hours as others have said. If leadership is hyper-productive, the rest of the team will follow suit. The firms that I have seen get this right start with setting the tone at the top, and its the same for those that fail.

    • Lee, your article is spot on. I have been around long enough to remember both a time when “entrepreneurs” were considered to be largely societal abnormalities (i.e. people who could not get real jobs); and also experienced the late 90s where we have seen a preview of where inflated valuations, a sense of entitlement, and confusing “playing startup” with “being a startup” lead.

      I am afraid that — though not exactly the same as 1999 — we are dangerously close to a bubble again. Not just a financial bubble but an emotional one too. And I do not want to see it burst because it will interrupt what I feel is an amazing, renaissance-level era of innovation, inspiration and can-do imagination globally.

      The truth is that entrepreneurship is glorified in the media (as well as now, many academic institutions) for many of the wrong reasons: riches, glamour, celebrity. Entrepreneurs are the new rock stars and the story of entrepreneurial success dovetails well with the story of the American dream or of writing the next great American novel.

      Starting a business is hard — but it’s even harder to succeed in building a meaningful, long lasting, valuable business (which we just don’t hear enough about — how many of these entrepreneurs aspire to build say the next GE or Disney vs the next WhatsApp?). The entrepreneurs that I know and admire started businesses for more reasons than just becoming rich. They want to change the world, leave a legacy, affect society, put a “dent in the universe” to paraphrase the most iconic (and over-referenced) entrepreneur of our era. In the process, a byproduct of doing a great job was also making a personal fortune. But that is a natural reward not a sole purpose.

      I know from personal experience that building a business is exhilarating, energizing, and — other than the birth of one’s own children — perhaps a singular high in life that only the process of succeeding in creating something from nothing can give you.

      But it’s also emotionally draining, all consuming, exhausting, and often to the detriment of your health, your relationships, and even your own spirit if one is not careful. No one talks about that.

      I’d rather see the emphasis out there being less of entrepreneurship as mere act of starting a business but more of a critical mindset that young graduates and professionals alike need to develop on order for them and their companies (founded or joined) need in order to succeed for the long term.

      And at the end of the day, there is no substitute to hard work and grit.

    • Adam Shain

      Great post Lee. From what I’ve seen, the problem stems from a lack of leadership. While it may be romantic to view startups as wanting to change the world, too often they are judged not on their vision, but upon their ability to find product/market fit and then execute. If the metrics are good, investors and management are happy and they continue driving towards these metrics.

      While execution is no doubt critical to the success of a company, execution without the ability to communicate the overarching vision makes it harder for employees to feel the level of commitment that you desire. Working to hit a number isn’t nearly as inspiring as working to change the world.

      Great leaders are committed to building enduring companies and recognize the value of communicating vision and culture (real culture, not drinking beer) in service to execution. Too often it’s the other way around.

    • Very true Lee! We at Hedgeable are in a WeWork in NYC. Come here after 5PM and it is a ghost town. Even more eerie on the weekends. We scratch our heads everyday, how are these itty bitty early stage companies of 1, 2, 3, 4 people getting anything done in a 30 hour work week? Add in the fact that a typical office is $2k+ a month it is the ultimate sign of a seed stage startup bubble IMHO. There are a lot of consultants, bankers, lawyers, etc, who have bought into the startup scene as the next cool thing (used to be hedge funds when I graduated school). I am here 120 hours a week and only get done half the things on my list.