My intuition would be that functional startups are visibly functional; they feel awesome. If you have to ask whether your startup is dysfunctional, then the key fact is that it's not awesome which I would expect---someone correct me if I'm wrong---that your equity is substantially less likely than usual to be worth much. Sure, there are non-awesome companies that succeed, but maybe they're just the rare examples from the very wide pool of non-awesome companies, or maybe they have founders who were good or lucky at obtaining venture capital or had some other special advantage. What's your company's special advantage? Do you have enough equity, or enough pay, to make it worth more than all the other startups you could join can offer you? Did you graduate from MIT or from Nowheresville college, and are they paying you $60K/year or $110K/year? Every offer has to be understood in comparison to its opportunity costs, the other offers you might get.
"My intuition would be that functional startups are visibly functional; they feel awesome."
It is a lot more complicated than that. The term "sausage factory" usually applies - http://www.urbandictionary.com/define.php?term=sausage%20fac.... Even very successful startups can feel very dysfunctional in the heat of the moment. First, when you grow fast and do things that have never been done before, lots of things break. Second, very often management may be absolutely brilliant about some matters, but have giant gaping holes in other areas. A CTO may have figured out a breakthrough in machine learning, but have no idea how to run an engineering organization. A CEO may be able to sell sand to a Sheik, but have no idea how to do proper accounting. As a company matures, it figures out a way to augment the leadership and compensate for weaknesses of the CEO or founder. But there are always growing pains early on, as a startup has not yet identified and fixed said holes.
You really should be evaluating a startup by the high notes that it is hitting, not by the amount of dysfunction. So it should feel awesome at least some of the time. But the startup may very well feel dysfunctional most of the time. That is ok, the dysfunction can be fixed later, but if there is no market or technical breakthrough, then the startup is probably not going to do well.
OP, the questions to consider are: do you have a product that people love (ie, they use all the time and recommend it to others)? If yes, is this a sample of people that is representative a bigger market opportunity? Does your CTO seem reasonable enough that if you demonstrate the value of tests and a build process, he'll allow you to allot time to fix things?
> Part of the reason I asked on HN is because I don't know if feeling awesome is the norm in a startup: the work is expected to be stressful, isn't it?
Yes and no. Waking up to a call at 3am because something you wrote broke and 50 guys in a warehouse are waiting on you should be stressful. A bug that costs the company $10-20k in double shipped orders is stressful.
If the stress is from just dealing with your coworkers, and not 'oh shit something went wrong', then I'd say its a cultural problem.
> I'm from nowhereville college, and the pay is lower than the low end you gave.
If you are not making 60k in the Bay Area, well, that is too low.
If you live in Nowhereville still, its probably fine.
