Short: It Might 9+ Years of Startup Life to Make It Big
Learning from Instacart’s IPO.
A friend of mine shared this article, “Instacart’s IPO a big win for early employees, but underperforms the market for most,” which is eye-opening and re-enforces many cautionary tales around joining a startup.
THE BIGGEST TAKEAWAY: If you joined Instacart after June 16, 2014 (when it had its Series B funding)—which happened a solid 9 years before its Initial Public Offering (IPO) on September 19, 2023, you would worse off than if you had instead joined any one of the FAANG companies (namely Alphabet/Google, Apple, Meta/Facebook, Microsoft, and Netflix).
To do a little harmless extrapolation, if you are joining a startup as a software engineer (or likely other individual contributor positions) hoping to make a bunch of money and become a multimillionaire, it could take you 9 years to do so—never mind the fact that around 90% of startups fail. In other words, you may have to stay there for 9+ years, hope that you picked any one of the 10% surviver startup, and hope it actually goes public.
I should say: this is comparing joining a successful startup that IPOs against joining a FAANG company, and joining and staying at a FAANG company isn’t easy. However, to me at least, it’s clear that the difficulty level of joining a FAANG (passing the interview process) and staying at a FAANG company (meeting bar for 9+ years) pales in comparison to joining a company with a 10% survival chance (likely less because we’re talking about a 9 year lifespan) and working way more hours. It takes a different type of person to do that, and it takes way more than a desire for money. This is working in strenuous circumstances for a prolonged period of time without the big payout that you hope for, and I believe that you have to truly believe in that startup to stick up for that long.
In other words, you may have to stay there for 9+ years, hope that you picked any one of the 10% surviver startup, and hope it actually goes public.
All in all, I find this simultaneously sobering and relieving. What I’ve heard multiple times is that the startup life is not for everyone, that it’s extremely difficult, and that it’s essentially the same as joining an established company, and this article validates that with solid data. At the same time, it’s relieving because it means that you have to pursue such a life for the right reasons, that it’s better if you are aware of the costs of such a pursuit, and that you should focus on the journey rather than the unlikely IPO that you may be hoping for.
