How to negotiate with the boss of the startup company I work for?
January 25, 2009 9:35 AM   Subscribe

Working for a startup and going a little crazy- how should I handle it?

We’re a small company, 3 people, soon to be 4 or 5. I’ve been working with the owner of the company for almost a year, longer than anyone else on board. If it matters, he’s a male, younger than me, and I’m a female. He is in his mid-twenties, I’m a bit older. We have a pretty good working relationship, and in general, though I'm not friends with him outside of work, I like working with him and find him interesting.

I took the job because of the flexibility of hours and because I needed a change in my life. I am a driven, hard worker, and work best in situations where I have a lot of autonomy and input with the work I do. I didn’t plan on working for this long with owner and the company, but I need the money and with the economy, I figured it was a good opportunity to learn some things. The money is not that great, and no benefits, but I’m paying my bills.

However, at times, it’s been a major struggling to clarify job responsibilities, salary, hours etc. My boss is natural entrepreneur, but he’s young and not great about clarifying these issues until I’ve firmly pressed. Fortunately, I’m OK with being direct.

However, I’ve gotten to the point where, even though I like the work (I’m half office manager, half sales, half research, half PR, etc,-- it’s a startup so our roles are a little fluid), that I am considering leaving the job. Every time I negotiate for something with him, something in our “business plan” (ha, plan, right) changes at the last minute, and I wind up taking on way more responsibility than we originally agreed upon.

For example, I negotiated to keep telecommuting 2 days a week after we found an office space. However, because work has been so busy, I’ve been coming into the office every day. But now we’re hiring more people, and suddenly, without first clarifying things with me, he’s expecting me to manage the new employees, while continuing with my own work. We also haven’t clarified if I’m getting a raise or not. This has happened several other times with different issues, with me having to firmly tell him “no” or “yes, with these stipulations”, etc.

I would like to keep the job, because I do like many parts of it. I think we could expand and do pretty well financially over the next five years.

However, because it’s a start up, and my boss is young, (I’m young too, but older than him), I am getting tired of the expectations/job title changing almost every other week. Is this just the nature of running a start up? Am I doomed to insanity with this job for the foreseeable future?

I am OK with the money, BTW, but I’m still not making that much, and I don’t get paid for overtime, extra responsibilities, etc (yet). There may be room for negotiation with this, too, although I’m not sure.

It’s mostly just weird because technically he is the boss, but I have worked so intensely with the business, that I feel some ownership over it too. I don’t mind working hard, but I’m NOT the boss, nor do I want to run the business (I might consider doing more of this for twice the money, but I don’t think that will happen at this point in the game).

Anyone have experience managing or working for a start up company?
posted by anonymous to Work & Money (10 answers total) 2 users marked this as a favorite
At this size, and upwards towards a couple dozen people the internal structure of the business is guided more on personalities and inclination than any sort of principle or process. It's not that you're "expected" to pull up slack in various areas, it's that you _must_ lest the bottom line will suffer. If you're not used to this, or production crises calls at 3am consider something else for the time being. Start ups will always be around. Also bear in mind that you could end up investing years of your life, huge amounts of trust (both spiritual and financial), and wind up in court getting a thorough screwing. You could also win big --it's almost a crap shoot.

I laugh because there is probably nothing here that you don't already know. It's really a personal decision... no amount of contracts or agreements can guarantee anything. I personally choose not to do this any longer because of strong interests (obligations) outside of 9-5.
posted by ezekieldas at 10:17 AM on January 25, 2009

I'm working for a startup now.

When working for startups, you have to expect that you will take on more responsibility than the original job description just because of inexperience (e.g. things come up that you would never have though of and there's no one to handle it but you). Your staff is small enough where it might be more of a collective in which case it is better to portion out duties. If you DO do that, then the biggest part of your job (assuming you are near the top) will be managing the rest of the staff and making sure their work is done.

So, like a McDonald's manager, if your underlings fail to do the job, you have to get it done.

My current position is a MacGyver - I'm a PA, I handle marketing, creative consultancy, sales, HR and ordering but I've had to bake, finish product, do early morning packing and delivery and make an ordering system from scratch (constantly refining). Oh, and every day we are working on something new - a new menu or finding new clients or finding more efficient ways of doing things. Plus dealing with my boss's wrath and playing damage control.

So it is going to be insane for the first year. Especially if it's his first startup.

My income is low enough where I qualify for state support (yay).
I'm learning a lot about running a company (cool).
The job is never boring because there's always something new coming up.
I really believe in our message and our product.
I get to wear whatever I want (within reason).
I get to test products before they go out!
I get creative input.

The low pay.
Crappy underlings that do a crappy job - aka the management part.
The hours.
Covering for people.
Constantly having to figure stuff out (like new software) with nothing but a little Google assistance.
High chance of burnout (I tend to cycle through this).

Anyway, if it helps you should make your own pro/con list. The most important thing is that you find your job fulfilling; that you feel you are learning from it even if you may not enjoy it. As a fellow young-un, it is just another stepping stone in your career so if it's time to move to the next rock cuz you've outgrown the job, by all means, move on.
posted by HolyWood at 10:50 AM on January 25, 2009

All startups are not created equal, and a bad manager is a bad manager, no matter where they are. The beauty of working at a small startup is the ability to sort of carve your own path, but remember that EVERYONE can do that and sometimes the lack of structure can be kind of a drag. Not all startups are 80 hour / week gigs.

If your work is rewarding enough, you can make all kinds of sacrifice, but if the frustration significantly exceeds your rewards, it might be time to look at options.

I love working for startups, but I have a few "deal breakers" as far as set-ups. Benefits (good ones) are a must, particularly if you are taking a hit on a less than competitive salary. Remember that options are basically "monopoly money" for 95% of all start ups. Don't bank on that compensating you later for your work now. Also, pay attention to the track record of the folks guiding your start up. If they have launched successful companies before, great! If not, that's fine too, but keep that in mind when you are putting together your package.
posted by Edubya at 10:51 AM on January 25, 2009

Just to reinforce the good answers above, do not consider (and don't allow them to convince you of) options as a portion of compensation. They are gravy. Of course, get as many as you can (I think a decent rule of thumb is <>some kind of gift coming to you above and beyond "new TV" levels of windfall.

Regarding salary, startups will always cry poormouth but the fact is that if they can't pay you a decent (read: competitive) salary then you should not be too anxious to take on extra responsibilities. The Ace in your hole (entendre unintended) is that you are taking a risk by working for them and that risk should be reflected in your compensation. If like many startups the goal is acquisition, it is not guaranteed that this will happen. If the company is not acquired, you have just spent years working for a small company for low pay. You can do that anywhere. My philosophy is that startups should pay higher than market rates for this reason. You can negotiate fewer options by this token if you subscribe to the "a bird in the hand is worth two in the bush" aphorism. Another way to look at it is that if they can't afford the $25K/yr (or whatever) it would take to put you at market rate, how do they expect to survive? In the terms of the kinds of VC funding that companies get, putting you at market rate is a drop in the bucket, even for a low-end VC series of $3-5mil.

But they are business people. In Marxist terms they are (paraphrased) out to screw you as much as possible; in capitalist terms they are maximizing their resources. There is no shortage of startups hiring these days, so if the above is incompatible with your dreams and aspirations, I'd recommend stalking job boards to see if something better comes along. I have never known anybody to be able to walk back prior committments in a startup, so unless you want to invent a bigger sob-story than they can, your tele-commuting is likely history. In this case, they certainly don't sound like they deserve more than two weeks' notice.
posted by rhizome at 11:31 AM on January 25, 2009 [1 favorite]

I went through the startup thing out West back in 95. I went the startup route because I was changing industries and I wanted to get as much experience as possible. I enjoy wearing multiple hats, and have a diverse background so that I could fill in multiple roles. this allowed me to be more valuable to them than person X who only wants to do thing X in a more mature and structured company. In return, I got to do things that a more mature and structured company would never have let me do in a million years. by the time the first company went out of business, I had my choice of people clamoring to hire me, and by the time the second one started laying people off, I deliberately took my time in choosing what I wanted to do next.

In a startup you have real impact. You can take action that directly affects the company. You can oftentimes see the results of your work. That is not often the case in many places. Your voice can also be heard above the din and it will be taken into consideration, which as a young person may not happen elsewhere.

The tradeoffs are that you have to be flexible, you have to be willing to wear many hats, you have to be okay that today your job is one thing and tomorrow it will be something else. You have to be okay with someone telling you "i need a rock" and it being up to you to figure out what kind of rock they need and where you're going ot get it and how. You have to thrive on ambiguity. If someone has to supervise you closely because you can't or won't make decisions you are not the right person for a startup.

You will also get paid shit. But there are tangible benefits to you in terms of your resume, and ideally, if the company takes off, then you are employee #7 and you will get to define what your new role will be. And, at that point, you will get some kind of raise or bonus.

In 2008 there is no reason to not insist on receiving a living wage from a startup. Hell, in 1995 I turned down companies who tried to pay me with options (none of which would have been worth anything) by telling them that options wouldn't pay my rent.

Now, it sounds like you are in good shape because you aren't afraid in being direct and confronting the owner and forcing him to make decisions. You should always back up the discussions by sending an email later that says, "I just wanted to restate our previous conversation for the record. You said blah blah, I said blah blah. Let me know if this was not your understanding of the situation."

But you are not going to get stability, you are not going to be able to telecommute, you are going to have to either commit or find another job. I worked for a startup where the founders were incapable of managing people. One was too much of a dreamer, the other one was outright abusive. Once we got funding and senior management all direct reports were removed from them, but god it was hell getting to that point. It was worth it to me to stick around because of what I was learning, but the hours and no time off burned me out. I was grateful when the second round of layoffs came and I didn't survive.

So, in short:
--you should make a living wage. if not, go elsewhere.
--you should get benefits. this is a big deal killer for me. they should at least provide basic health insurance coverage.
--is the owner a mensch or is he an asshole? if the latter, go elsewhere.

There are plenty of companies who will hire you for subsistence wages. So unless you are getting something out of this, go elsewhere.

And yeah, two weeks' notice is all you should EVER give ANYWHERE, unless you are in a profession like medicine where there are real reasons for the transition to be longer. Be prepared for the owner to view you as disloyal, however, and not 'down with the cause' and for him to tell you to leave immediately.
posted by micawber at 2:15 PM on January 25, 2009 [2 favorites]

I agree with everything rhizome said.

If you want any concessions, you are going to have to confront them, and you may have to threaten to leave. Or actually leave. This is the only language they will understand.

I'm in a similar situation, in that I've taken on a lot of extra responsibilities at times. I was always expecting some sort of compensation or promotion until I realized: my job title is "developer," and that is what they think of me as, and what they will always think of me as.

Business people have an amazingly rigid way of thinking, even at start-ups. No matter how much you prove otherwise, you are the job title they hired you as and nothing else. They will persist in this kind of thinking to the point of ignoring evidence right in front of their noses. As far as I know, there is no way to overcome this, except to move to another job with a better title.
posted by drjimmy11 at 2:42 PM on January 25, 2009

Wow, I missed the "no benefits" part. That is simply unacceptable in this day and age. Give two weeks notice when you quit, although zero notice would be completely justified for someone who thinks that is the proper way to run a business.
posted by drjimmy11 at 2:50 PM on January 25, 2009

Oops, mefi ate my math. My rule of thumb is less-than $1 per option share. This means you should probably have at least 50,000 options if you want passable gravy for your stress, flexibility and effort. Double that (minimum) if you're really willing to be there for the long haul.

And yeah, the benefits thing is huge. Feel free to get another job with benefits and tell them that today is your last day because you need health insurance yesterday.
posted by rhizome at 3:25 PM on January 25, 2009

As with all things, there is a cost benefit ratio: what are you willing to sacrifice, and what do you actually gain? At startups, that ratio differs wildly from the standard big business career path, and even between startups themselves. For me, it was a chance to work like hell, have a great time, get an effective MBA and skip what would have been several decades of professional development and career advancement.

I got lucky, and well, to be honest, I worked really hard to make sure the risks I was taking were the ones I'd want to take and feel comfortable taking. For me, even through the tough times (I went a good part of a year without salary and health benefits) there were five things that I asked myself every day:

1) Can the people I am working with get this done? Can we actually succeed?
2) Do I trust them?
3) Is what I am doing inherently valuable for me? Am I learning? Am I growing?
4) Does what I do in the company have a significant impact on the likely hood of success and my own personal goals? In other words, am I betting on my own performance, capabilities, and drive, or are the variables most likely to determine the success, failure, or the answers to the above three questions mostly out of my control?
5) Can I physically continue doing this? (Salary, Benefits, peace of mind, etc.)

If at any point, had the answers to any of the above questions been "No" I would have left in an instant. Thankfully, I work with amazing people, and every day when I step into the office, the answers to the above questions are a resounding "Yes".

At that time in my life, the above was my criteria. Other people clearly have very different criteria, and I imagine, that ten years from now, I too will have very different criteria: I probably will be significantly less inclined to live off of rice and beans for a year and hope I don't get pneumonia. YMMV.

Figure out what you want, and stick with it, and you'll be fine.
posted by Freen at 6:35 PM on January 25, 2009

You say you feel almost as though you have ownership, but you don't. If the owner has to eliminate everyone from the payroll but one person, he is going to chose himself over you. Don't get more emotionally invested in a job than they are willing to financially invest in you. What responsibilities and skills did you have a year ago and compare them with today. When you increase your workload without compensation you lose leverage. You are perfectly justified in asking that the company YOU believe in believes enough in YOU to compensate you fairly so yuo will stay and help them grow. If they aren't providing you with benefits then he needs to bump up your salary to cover your cost for private insurance (and not the cheapest insurance either) as a minimum and add extra for all your extra duties.
posted by saucysault at 8:10 PM on January 25, 2009

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