Sorry, but not joining the typical startup for a below-market salary, a handful of options that will likely never pay off, and an expectation that you work 80 hrs a week may be "risk-averse" but it's hardly irrational. The main benefit to working at a startup with those conditions (not all are!) is that you want to start your own company and want to learn and build your network. But even then, a lot of these recent grads would be better off just starting a company now.
In my experience most undergrads are so risk averse that they don't even get as far as making that calculation. The reason most don't go to work for startups is the same as the reason most don't think of starting them: that those alternatives don't even seem real. We're talking about a phenomenon much deeper than calculations of expected value.
I think you're right about the options not seeming real, but I don't know if the reason is primarily risk aversion. I think the majority of CS graduates just don't realise it is an option.
In my university, the big software houses all do serious recruiting on campus. The cream of the crop are generally offered jobs before they graduate (some are also hand picked by the faculty for postgraduate research). The careers office goes out of its way to try and ensure a seamless transition between school and work. In that sort of environment, somebody wishing to work for a startup would have to consciously reject the idea of working for Google/microsoft/IBM/whatever and actively seek something else (and you won't come across most startup jobs on Monster).
I think it boils down to the job offerings being good enough. Microsoft, for example, offer a fancy graduate program with a lot of travelling to interesting places where they certify you in all their main technologies. That training is supposed to seem like an extension of the college life, except it pays well. And its being offered to you before you sit your finals. Just about everybody you know thinks it's a great opportunity. Why go digging for hard to find jobs in companies that might not even exist tomorrow? (Rhetorical!)
Then again, my university is in Dublin, where we have a real shortage of programming talent, a few big name computing companies and almost no startup culture whatsoever. YMMV.
Does that imply that startups are bad at reaching undergrads? It seems like offering good salary, awesome work conditions with smart people, and some equity would compel at least some grads to run the calculation.
Go talk to Dropbox, and ask them if they give below market salaries, options that will likely never pay off, and an expectation that you work 80 hours a week.
But you're right that that's the danger of joining a startup coming out of college -- you have no idea which ones are great and which ones are not.
If some intermediating third party vetted the startups for the students we wouldn't have that problem.
Such an idea has worked in all kinds of problem domains, but in startups founded by college grads YC is the standard. Having the PG stamp of approval is so valuable.
Yeah, I agree that not all startups are this way. But the other thing is that so many of these startups are founded by college grads. Do they really know that much that our recent grad doesn't? Probably not.
I really think that some of the hiring difficulty for startups is that they're genuinely not offering that great a deal for employees.
To say nothing of the fact that if one graduates with a large student debt, taking below market salary on the small chance that you might break even on employee stock options is irrational unto itself.
This is along the lines of a startup idea I've been kicking around for a bit as well. Interested to hear (eventually) what tacks the two YC teams are taking.
Same here. It shouldn't come as a surprise, it's a problem most of us have faced from both sides, and it's a problem that has a direct monetization path. Finally, recruiting is something only a small % of technical people are really good at, so it makes sense to let them sell their comparative advantage.
One idea I had during my internship with Cloudkick this summer was an "Intern at a Startup" program, vaguely modeled on YC's "Work at a Startup".
Basically a bunch of startups would have their interns make a short presentation about interning at a startup. When the interns return to school they go around and present to any classes or groups that they can, and generally do their best to recruit more interns for the sponsoring startups.
I think this is a great idea though i did think it was worthwhile to comment on some of the things that I think are actually problems versus the ones that aren't really problems.
Real Problems:
1. Difficult for students to find startups interested in interns. Sounds like a number of folks are working on this which is awesome.
2. Speed. Startups and universities move at different speeds. A y-combinator like organization could go a long way toward solving this problem.
Things that are not really problems:
1. "Many of the best college students at MIT are risk averse and think short term." I work as a Program Manager at the MIT Entrepreneurship Center and was a CS grad Berkeley and neither place is short on risk-oriented CS students. In fact most of the CS students i went to school with either wanted to start their own company or work at a startup. If they ended up at Google it was because they couldn't find a startup that was a good fit or because the startups that would have been a good fit didn't want to hire straight out of school. I graduated about 5 years ago and i think students are even more interested in startups now than they were then.
2. "Startups are missing brand value for parents, relatives, and friends. This is also highly cultural." This certainly isn't true for "friends" and i think it is largely untrue for parents/relatives. With a whole generation now of young and successful entrepreneurs like Gates and Zuckerberg, I think many parents are starting to realize the prestige of working at a startup. Obama's National Entrepreneur's Day this has been brought even further into the mainstream. There is plenty more we should do here to continue celebrating entrepreneurs, but i don't think this is what prevents people from joining startups fresh out of school or for an internship in school.
This could work for internships, I agree, but I think it will be a tough sell for permanent employment.
You are setting up a trade. Work somewhere that you normally wouldn't work, because you have other great options and very few Summers until graduation. In return, we will ensure you learn a lot, work on cool stuff, AND receive prestigious branding to put on your resume in the future. Here is why I'm skeptical on intern-to-fulltime conversion.
I remember when I was an undergrad, two of the most prestigious Summer internships in tech were IBM's Extreme Blue and Microsoft (hard to believe now). While I don't have the hard data, all my anecdotal evidence suggests the number of intern-to-fulltime conversions were amazingly high at Microsoft and atrocious at IBM.
Why? My theory is Microsoft interns expected their fulltime experience at Microsoft to be more or less the same as their internships (whether or not that's true is another story). However, all the Extreme Blue interns knew that they were in a special, experimental IBM program and if they were to join fulltime, it would definitely not feel like Extreme Blue all year long. However, as a resume brand and an educational Summer, both options were still attractive.
Which brings us back to the proposal. The program is giving the interns a taste of something they can't quite get by joining up full-time with the startups. If a guy had his pick of places to intern, he might intern at the "Extreme Startup Internship" to learn all about how to found his own startup while doing cool stuff, or he might go because it will help him land the Google / Facebook job. Either way, when graduation comes around, my guess is he's either founding a startup or acing his job interviews. The more he loves interning at the startup, the more he should love the thought of founding one, and the other cohorts in the Summer program are the perfect pool of co-founders.
Very cool idea though; it would be a great success to have the Extreme Blue of startups internships, and even a few conversions would be a big win.
Heh. I've worked on staff at IBM Extreme Blue for four years, and actually, our conversion rate is well above atrocious. (I'm guessing your undergrad years were a few years back, though, since you mention us & Microsoft but not our biggest rival for talent, Google).
In any case, though, you're right on the money in the bulk of what you're saying. Top-quality interns are highly aware of what they're doing, and what their goals are for a given internship. A prestigious internship should deliver on all of the following: exciting challenges, a high level of autonomy/entrepreneurship, a decent salary, and an impressive top line in the "experience" section of your resume.
From my perspective, here's what a company must do in order to attract top interns, and convert them to full-time hires:
* Be a great place to work (for interns and full-timers). Your interns will be with you for at least three months. They'll know within three days whether you treat your employees well.
* Give the interns real meaningful work to do, where they can clearly see the impact to the company's customers & its bottom line.
If you can do those two things, you'll attract great interns, and should be able to net some great full-timers as well.
This article focusses on new college grads. The questions remain, are college grads the right choice for startups and are startups the right choice for college grads. The answer will probably depend on the type of startup, the grad and time available for mentoring and training the new grad. Though I suspect the majority of silicon valley startups concentrate on hiring experienced people in the early stage before they have the resources and time to invest in new grads.
Personally I would prefer to work a couple of years for a more established company to become expert in certain technologies and learn how stuff happens at "real" companies.
There are tons of different startups. I feel like you're talking about extremely early stage startups, or startups started by college students themselves.
A startup founded by seasoned founders that's been alive a year or so is actually quite a good learning environment for a recent college grad. They will have good coding process in place, good communication, etc.
Maybe part of the issue is "Many of the best college students at MIT are risk averse and think short term." The top students at the top universit[y|ies] form quite a narrow recruiting pool. Are you sure the people you are looking for can only be found within this group? You've also just helped to alienate the top 1% of students from long tail universities, or none at all (why waste time on a program that will sift based on your alma mater rather than your abilities? - I mean what are you actually looking for from recruits?)
Also, if that is your target group it's bizarre to exhibit any sort of surprise that there is fierce competition from other recruiters (Wall Street, Google), and that statups might not fare well against them (who has more $$$ to offer?).
"Too Many Startups / Choice Paradox. Students have no idea how to pick the right startups. Even if they did, there are an overwhelming number of choices. This is classic paradox of choice."
I expect that anyone who knows how to pick the right startups should consider moving into venture capital.
Wow, what a great find!! Sadly I don't think this will work, though I would love to be proven wrong.
A brand new, two person startup in my (limited) experience isn't able to give an intern the support they need.
At Xobni we had a one-month intern from MIT when it was just Matt and I. I still regret that we weren't able to give him the full startup experience. He wouldn't be around long so he couldn't work on anything core, which meant that his work didn't really get much support from me. And he was burning the midnight oil side by side with us, with no definite long term stake in the company.
But who knows. Anyone been through the HackStars program and able to share their feedback?
I also imagined better pay -- like a $90k equivalent salary.
Adam, great post. We are aiming to do that with www.collegejobconnect.com. Undergraduate recruiting needs more diversity and a better way for students to connect with a whole host of employers, not just those in consulting, finance, or the big tech companies (although these are great places to work too, I myself went to Wall Street before jumping into startup land). Startups offer a great place to work, you'll likely not a find a place where you'll work harder or learn more. I think pay and uncertainty are strong detractors, however.
The overall point is there should be more optionality and more exposure. I'd be happy to chat further, we have some cool stuff going on and I'd like to get your thoughts. In November we generated 50 interview offers to companies that never have the opportunity to recruit on campus and we just signed up a big player in the geo-social space. Hit me up at jeff _at_ collegejobconnect _dot_ com
I disagree that "college students are irrationally risk averse".
College students are just students whose parents care that they get a nice career out of college. The brand name and perception of companies therefore dictates where most of them go. When asked, "so what did you end up doing after college?" most college kids, at least subconsciously, want to be able to say "I am working for great company X" and have the listener know what they are talking about.
That listener is typically their family.
Thus if you want more college kids to join startups, you should make it attractive to their families to do so. You'll still have the brand problem, but maybe the word "startup" will be like the word "wall street" ;-)
This is a great idea, when I was in the US under a F1 visa I didnt know how to get in contact with startups. I tried through recruiter, indeed it resulted into an epic fail.
Now I still looking but from EU makes thing even more difficult.
What I need is a startup recruiter for people working with time to spare. If you don't assume someone has to take the complete step of faith and quit job cold turkey, you have a very large talent pool, tho you'll need an innovative work strategy. Patio11 has seen success here, as we know.
My .02, and would work with such a recruiter if existed. Email eric dot holloway at gmail if wishing to converse w/ me.
www.Students4Startups.com is taking the first step at this in Los Angeles, by vetting interns and startups and connecting each other. John Shiple is their CTO and is a great technologist.
You can be a well rounded engineer (important for working at a startup) without being a) financially stable and b) risk tolerant (important for starting a startup)
Sorry, but not joining the typical startup for a below-market salary, a handful of options that will likely never pay off, and an expectation that you work 80 hrs a week may be "risk-averse" but it's hardly irrational. The main benefit to working at a startup with those conditions (not all are!) is that you want to start your own company and want to learn and build your network. But even then, a lot of these recent grads would be better off just starting a company now.