Both Sides of the Table - Latest Comments in Is it Time for You to Earn or to Learn?

Re: Is it Time for You to Earn or to Learn?

Kbarnett2010 — Tue, 25 Jan 2011 18:41:03 -0000

I have a question I need advice, how do I reach out in private. Kbarnett

Re: Is it Time for You to Earn or to Learn?

Dean Martinetti — Tue, 07 Dec 2010 18:47:26 -0000

Brilliant...i'm reading your site from end to end now and watched your talk at Caltech...I wish I met you years ago sir. You may have saved me a lot of time and heartache..

Wish I could meet you now at GDC or something...sooooo many questions to ask

Re: Is it Time for You to Earn or to Learn?

Djung — Tue, 23 Nov 2010 05:25:11 -0000

Thanks for the insight Mark. I am a new reader to your blogs and I have been trying to catch up on the readings ever since I heard a podcast of your presentation at Stanford. I am currently finishing up my MBA part time in LA while working FT and wanted your perspective on whether leaving a high paying position for the sake of "learning" and/or surrounding yourself with more capable individuals is a smart idea.

My primary reason for going PT for my MBA was to maintain positive cash flow (to pay for school while setting aside additional cash for startup) while focusing on developing my business plan. Any thoughts would be much appreciated.

Re: Is it Time for You to Earn or to Learn?

msuster — Thu, 26 Nov 2009 11:18:47 -0000

Ok, maybe that's one step too far ;-)

Re: Is it Time for You to Earn or to Learn?

msuster — Thu, 26 Nov 2009 11:18:24 -0000

Assume that you'll make zero cash from your 0.5%. It is the most likely outcome. Now, would you do that 15 hours / week just for the experience? If yes, proceed. But it this way, many people pay to learn (e.g. for college or a masters degree). So if you think that this job will be a great learning experience I wouldn't worry about putting in the hours. I guess you could see it as an internship. But know why you're doing it - and don't stay too long!

Re: Is it Time for You to Earn or to Learn?

scheng1 — Thu, 26 Nov 2009 08:46:14 -0000

That's true. There was a lecturer in college who mentioned that we should work at McDonald as a crew member and to learn about business management!

Re: Is it Time for You to Earn or to Learn?

Jamie Hamilton — Mon, 09 Nov 2009 21:42:26 -0000

Thanks for sharing this Mark. I am very much in the learning stage so I was glad to stumble upon this article. I was recently offered .5% profit sharing as a Senior VP of a pre-revenue startup (not intended to be VC based). I would only be obligated to work 15 hours a week, but the catch is that there is no salary offered. I am wondering how having no salary might change your metrics? Was a meager salary one of your underlying assumptions in the above examples?

I like it because I would be 'punching above my weight', and because it is an idea that I would like to be associated with. However it will likely take a couple few years to get going, so as much as I enjoy learning, it could be a mistake..I guess the question to ask would be if I get no cash back, would it have still been worth it..

Is there anywhere I can find standard-ish compensation plans for startups, pre and post money?

Re: Is it Time for You to Earn or to Learn?

msuster — Mon, 09 Nov 2009 10:53:06 -0000

Gotcha. Sorry, I was being dense. Didn't realize you were pointing out a typo. I'll go fix that now.

Re: Is it Time for You to Earn or to Learn?

msuster — Mon, 09 Nov 2009 10:52:18 -0000

There is no one size fits all here. Without details it would be irresponsible for me to advise. I would say you should look for the place where you feel a better fit with:
- the people you'll be working with and;
- the kind of work they've told you you'll be involved with

Good luck.

Re: Is it Time for You to Earn or to Learn?

dsev — Mon, 09 Nov 2009 05:14:57 -0000

Hi
greatly enjoyed your article, just a quick question -
i graduated with a business/computers degree and am currently looking for a job.
i have been offered two opportunities - one at an established dev firm and another at a startup - both doing dev work.
at this point the earnings wont be great at either.

im not sure where i would be able to learn better?

thanks

Re: Is it Time for You to Earn or to Learn?

John Hawekotte — Mon, 09 Nov 2009 00:12:33 -0000

I agree, but I was addressing (in an obnoxious way, now that I look at it) your comment:

"... so you’ll likely be taxed at a long-term capital gains rate. In California that averages around 42.5% so in my state after tax you’d make an extra $18,000 / year and that’s in a positive scenario!"

Your commentary is quite insightful, which is what should be expected from the best VC blogger in the genre.

Re: Is it Time for You to Earn or to Learn?

msuster — Sun, 08 Nov 2009 01:26:39 -0000

Luke, where people have the right skills sets I totally agree with you. But some people just don't have a natural predilection for business so would benefit by working with other talented people before branching out on their own.

Re: Is it Time for You to Earn or to Learn?

msuster — Sun, 08 Nov 2009 01:25:18 -0000

Too true.

Re: Is it Time for You to Earn or to Learn?

msuster — Sun, 08 Nov 2009 01:25:00 -0000

Thanks, Bogdan. I agree people should try the "earn" route to "learn" even before they've learned everything. I also agree about hard cash. I often find that employees in startups don't appreciate soft benefits.

Re: Is it Time for You to Earn or to Learn?

msuster — Sun, 08 Nov 2009 01:23:13 -0000

Funnily enough, most people don't even bother to do the math. I always wonder why.

Re: Is it Time for You to Earn or to Learn?

msuster — Sun, 08 Nov 2009 01:22:49 -0000

Thank you for the feedback.

Re: Is it Time for You to Earn or to Learn?

msuster — Sun, 08 Nov 2009 01:22:25 -0000

Yes, it's hard to try to "earn" while you have mouths to feed. It's why I encourage people to try when they don't have encumbrances.

Re: Is it Time for You to Earn or to Learn?

msuster — Sun, 08 Nov 2009 01:20:51 -0000

I agree with you 100%. My broader point is that too many people are looking to "learn" as in working in a more junior role in a company rather than learn from being the CEO (or other top executive) where the could earn while they learn. The best people are never done learning.

Re: Is it Time for You to Earn or to Learn?

msuster — Sun, 08 Nov 2009 01:19:05 -0000

Thank you for stopping by and I appreciate the feedback.

Re: Is it Time for You to Earn or to Learn?

msuster — Sun, 08 Nov 2009 01:18:43 -0000

The issue isn't with long-term capital gains taxes, it's with short-term capital gains taxes. For stock option plans to be categorized as long-term you need to have exercised your stock and held it for one-year before selling. This almost never happens. So most people get stuck with short-term capital gains taxes. In CA these come out to 42.5% approximately all in.

Re: Is it Time for You to Earn or to Learn?

LukeG — Fri, 06 Nov 2009 16:58:34 -0000

Great piece.

In my own limited experience, it feels like I've learned more in the 18 months since starting a company than I have in the rest of my life. If you're in a position to bring together a team and take a shot at a promising opportunity AND you're young enough that your opportunity cost is pretty low, I highly, highly recommend it. There are few situations in the world that will lead to as much personal growth and professional development *in terms of true capability.* If you're trying to climb a corp ladder, it's a much riskier approach.

(I worked at a bootstrapped startup in college and for a venture-back co for a year after graduating. Both were important but can't even begin to compare to this.)

Re: Is it Time for You to Earn or to Learn?

ShanaC — Fri, 06 Nov 2009 15:24:57 -0000

Let's push this further-

I'm going to be an undergraduate alum of where you went to B-school. It's definetely time for me to learn. I have a wierd situation due to my deparetment in which I finish classes in 5 weeks, but don'tgraduate until june. You know this scene- do you stay in Chicago? What is here? Or SHould I go and also be working towards my undergraduate,, knowing how crazy the undergraduates are?

(And We Are)

Re: Is it Time for You to Earn or to Learn?

Jimmy Hendricks — Fri, 06 Nov 2009 15:09:34 -0000

This is great. In the first year I had several talks with my co-founder about this topic. The risk is higher doing it on our own I said, but if we fail we will have learned a lot more starting something than working alongside someone else.

Re: Is it Time for You to Earn or to Learn?

DS Dev — Fri, 06 Nov 2009 14:18:38 -0000

Whenever I hire people for my company, I always tell them that I will not keen at all to offer them stock options or any other similar long-term shady 'benefits'. I would very much prefer to give them a higher salary or better bonuses (things that employees can 'taste' for real).

Although stock options may help the employee feel more involved in the business (which is something that I would like, as the company founder), in the vast majority of real-world cases it's just a BS due to the same calculation point that you made in your article. And I do my best to explain it to them. To me, it is more of an employer's trick than a real benefit.

Indeed, there are people that wouldn't want to get involved unless they are offered stock options. If it's really a must-have for them, so be it.

About learning vs earning, I totally agree that the way to go is to start your own company or to get to be a senior exec. But you shouldn't try to learn 'everything' before you start your own company. I often see people that are "not yet prepared" to start a company. If they don't do it soon, most of them will never be prepared. You should start it trying to earn as much as possible from it, but most likely you will end up learning a lot from it... probably more than you would learn by working for somebody else.

Re: Is it Time for You to Earn or to Learn?

djdan85 — Fri, 06 Nov 2009 13:14:04 -0000

Great post. The simple math is powerful yet often overlooked!