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Working at Big Tech Companies Can Be a Trap - Michael Seibel


3m read
·Nov 3, 2024

Hello, my name is Michael Seibel. I'm a CEO and partner at Y Combinator. Before YC, I was co-founder of a company called Justin.tv that later became Twitch and sold to Amazon, and another company called Socialcam which sold to Autodesk.

One of the most common misconceptions about startups is that you have to have experience at a big company in order to start one. There's a little nugget of truth inside of this misconception. Certainly, getting experience in the working environment gives you access to a whole bunch of new problems; problems you might not have considered before, and problems that could be the base of what you create as a founder, as a new startup.

However, your actual experience day to day working at a big company is often not very useful for creating a startup. First, often in a big company, you're an extremely, extremely small part of a very large machine, and so the amount that you can actually learn is less. The pace that you learn is much slower than when creating your own startup, where in effect you are the entire team, and everything works or doesn't work because of you.

A second issue with working at a big company is that big companies are very good at retaining their workers, and this is not something that most young people really have any experience in. A lot of big companies will give you a signing bonus, will give you every six months or every year an additional stock option grant, and basically, they will structure your compensation in such a way that at every point, you feel uncomfortable leaving.

They accomplish this by giving you a lot of services and then giving you a high salary, which at first seems like a great thing, but in reality, it often causes you to increase the amount of money that you're spending every month. You know, nicer apartment, maybe get a car, go on nicer vacations.

So while you are trying to spend this time in a big company to get experience to create a company or startup of your own, in fact, you increase the amount of money you are spending. You aren't really learning at a fast pace, and when you want to leave, all of the money that you're leaving on the table motivates you to stay.

In reality, it's often the case that working at a big company can be a trap, especially if you don't go into the company knowing what your goals are. You know if your goal for working at a big company is to save some money, to get some experience at a specific technology, or to meet a co-founder that's great, then go there and do that specifically. Don't fall into the trap of all of the techniques they're going to apply to you in order for you to stay.

But if you actually don't need to work at a big company, if you already have a problem you want to solve, if you already have money in savings, if you already have a co-founder, then just get started. Just start building. You can't believe the number of YC companies we have funded that do not have a blue-chip tech company on their resume. It's absolutely not required to get into YC, and it's absolutely not required to be a good tech startup founder.

Thank you for your time.

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