Why You Should Leave Your FAANG Job

Summary

In this conversation, Michael Cybel and Dalton Caldwell explore the pitfalls of working at FANG companies (Facebook, Amazon, Netflix, Google) for aspiring tech founders. They discuss how the allure of prestige, equity, and compensation can trap employees in roles that may not align with their entrepreneurial goals. The experts emphasize the importance of having a clear plan before joining a FANG company, avoiding psychological traps like loss aversion, and understanding that working in large tech firms may not always translate to startup success. They encourage future founders to stay focused on their long-term ambitions and avoid getting stuck in the comfort of corporate life.

Takeaways

• 😀 FANG companies often lure young professionals with the promise of working on the hardest technical problems at the largest scale, but most jobs involve less exciting work like maintaining small components or ad servers.
• 😀 Founders often misjudge the value of working at FANG companies, assuming the experience gained will directly translate to startup success. In reality, much of the work at big tech companies doesn't prepare you for the realities of launching a startup.
• 😀 Working at a FANG company is often more about learning corporate structures, office politics, and processes than it is about learning how to build a startup from scratch.
• 😀 The real work at FANG companies is often less glamorous than advertised. Employees may end up working on minor tasks or features that don't have a direct impact on the company's overall mission.
• 😀 The 'FANG trap' is a retention strategy that uses perks like equity vesting to keep employees around longer than they initially intend, often leading to 'golden handcuffs' that make it harder to leave.
• 😀 Many aspiring founders assume that working at a FANG company will unlock easier access to venture capital. However, this is not always the case, and many investors are not as impressed by a FANG background as people think.
• 😀 The longer you stay in a FANG company, the less beneficial the brand name becomes. In fact, staying too long could negatively impact your future opportunities as an entrepreneur.
• 😀 FANG companies use gamification strategies, such as leveling up through promotions and bonuses, to keep employees engaged and prevent them from leaving.
• 😀 Aspiring founders should go into FANG companies with a clear exit strategy. Having a plan for how long to stay and what you want to achieve will help you avoid being trapped by retention strategies and perks.
• 😀 If you're constantly fantasizing about quitting your FANG job, it's a sign that you're not in the right place. This is especially true for people who feel disconnected from the purpose of their work and their long-term goals.

Q & A

What is the primary misconception many aspiring founders have about working at FANG companies?

Many aspiring founders believe that working at FANG companies will provide them with the opportunity to solve the hardest technical problems at a massive scale, but in reality, most employees work on small, segmented tasks that don't directly translate to the challenges faced by startup founders.

How do the tools and infrastructure at FANG companies differ from those in a startup environment?

FANG companies offer a highly structured environment with tools, systems, and infrastructure that make the work easier. In a startup, however, there is a lack of these resources, forcing founders to create everything from scratch, which can be a jarring transition for someone used to the convenience of a large company.

Why is working at a FANG company not always the best path to securing VC funding?

While a FANG background can lend credibility, it doesn’t guarantee funding. Investors look for a mix of qualities in founders, and staying too long at a FANG company may actually diminish the perceived value of your resume. The path from working at a FANG to raising venture capital is not as straightforward as it may seem.

What is the concept of 'loss aversion' in the context of FANG retention strategies?

Loss aversion refers to the psychological tendency of employees to irrationally value something they might lose, such as unvested equity. FANG companies use this principle to retain employees longer by offering equity packages that vest over several years, creating a strong incentive to stay even if the employee is unhappy.

How do FANG companies engineer retention systems to keep their employees?

FANG companies use highly gamified systems, offering bonuses and equity that vest over time. Employees get drawn into the system by the promise of future rewards, but over time, these systems can trap them in jobs they are unhappy with, especially if they have unvested equity.

What should aspiring founders be cautious about when working at a FANG company?

Aspiring founders should be cautious about the comfort and financial incentives FANG companies offer, which can lead to a cycle of staying longer than planned. They should keep their personal expenses low, stick to a clear exit strategy, and avoid becoming too dependent on bonuses and equity packages.

What is the recommended approach for someone leaving a FANG company to start a startup?

The recommended approach is to leave strategically by having a clear plan in place, including knowing what you want to achieve at a FANG company (e.g., saving money, building a resume). It’s also important to resist the temptation of retention incentives and be ready to leave when the time is right, without feeling trapped by unvested equity.

How can working at a FANG company potentially harm a future startup founder's mindset?

Working at a FANG company can lead to a mindset where founders may become overly focused on perfection and overly dependent on tools and systems, making it difficult to adapt to the more chaotic and resource-scarce environment of a startup. This can dampen their optimism and hinder their ability to move fast and innovate.

What is a common psychological trap employees fall into when working at a FANG company?

Employees often fall into the psychological trap of seeing their unvested equity as 'savings,' which encourages them to stay longer than they intended. This leads to a cycle where they become financially invested in staying, even if they are unhappy in their role.

What advice do the speakers give to someone considering working at a FANG company as a stepping stone to starting a startup?

The speakers advise aspiring founders to have a clear plan from the start, understanding what they want to achieve by working at a FANG company and setting a timeline for when they plan to leave. They also recommend avoiding getting caught in the cycle of lifestyle upgrades and unvested equity, which can trap them into staying longer than intended.