Reflecting On My Failure To Join A Billion Dollar Company
In late 2018, I left a cushy job to join a small-but-promising startup that seemed on the cusp of blowing up within a major industry.
The new job meant a pay cut, longer hours, and drastically more stress and pressure, but I took it because I wanted to experience a hypergrowth startup—to say I could hack it in that environment—and because I wanted to get rich, fast. The offer included an options package which, I was told, could realistically be worth one million dollars or more, in a few short years.
All that was needed, for that seven-figure payday to become reality, was for the company to exit, by IPO or acquisition, for a billion or two. There were other billion-dollar companies in the sector. It seemed possible.
And in fact, for a short time in 2021, the company was technically valued at just over $1 billion. On my paper my equity was worth hundreds of thousands.
That didn't last.
Checking my Carta account this morning, the total present value of my stock options is: $3,200. That’s about $15,000 in the red from my strike price. Could the valuation recover someday? I can’t say—the company laid me off last November. Since then it’s been radio silence. I have no idea what’s become of the products and teams I spent four years building.
Suffice to say, my time at the company did not pay off as I hoped.
The first time I heard of the company was when my boss at my prior job pulled me into a conference room one day to inform me he was quitting. A startup had made him an offer. He shared the details — it sounded generous in both cash and stock options.
And, he wanted to know, would I go with him?
Until then, I had no plans of leaving that job. It was comfortable, relaxed, and it paid well. But it was also staid and a bit boring. There was no ambitious mission. No hockey-stick growth. Trading that for a startup aiming to overhaul a massive industry was tempting.
I met with new company’s engineering leads. It seemed like a good fit: I specialized in some technologies where they needed more expertise, and they offered plenty of growth opportunities for someone early in his career like I was. And, everyone I spoke to emphasized the potential for a life-changing exit.
Within a couple weeks, I signed my offer and had a start date.
And the job started well, for the most part. The pace and pressure were unrelenting; there were many long days, and stress dreams at night.
But the company was growing like crazy, just as everyone promised. Our metrics were doubling and tripling at a fantastic rate. We were hiring so fast that within a year I felt like an old hand. My performance seemed strong; I got promoted, then promoted again.
The good times were rolling, and throughout, there was a constant background hum about an IPO or some other massive payout.
During meetings with the engineering team, the CEO told us he was aiming for a multibillion-dollar exit. That seemed realistic, particularly after we raised money at a valuation north of $1 billion in 2021. Execs and department heads would casually mention the prospect of going public. Our HR team held company-wide meetings to explain stock options and their potential value. Eventually we heard there was an IPO working group, comprised of execs and advisors, with a target date of late 2022.
Of course nothing was ever guaranteed. And I’d always read online that the probable value of any options package, no matter how vast, was precisely $0. But for a while, it seemed that the company was beating the odds—that I and my colleagues were the lucky ones who found the gold ticket.
As the company succeeded, I became increasingly miserable. The stress of the job followed me everywhere. I spent my weekends and vacations either working, or dreading the return to work.
But the stress alone wasn’t the issue. The problem was that I was enduring all the stress for no clear benefit, and with no end in sight.
We’d finish one grueling project and immediately begin the next. As the company grew, the significance of my individual work diminished. And if I worked hard and performed, I got raises—but like many in tech, I’d passed the point where more money felt like a meaningful improvement in my life. A raise only meant my Vanguard account grew a bit faster.
Champagne problems? Sure, but knowing that I was in some ways fortunate was very cold comfort. I was working as hard as I could, with no sense that anything I did really mattered for me or my family.
I wanted out. But as long as the company was growing and big IPO payday seemed possible, I told myself I had to endure a bit longer.
At some point—maybe early 2022—the tenor inside the company changed.
No concerns were specifically shared with the team, but it seemed like there were a lot more Hail-Mary desperation projects on our engineering roadmap.
This was a critique you could always have made about the company: we tended to pick silver-bullet projects rather than pursuing a coherent long-term vision. But this was worse than usual. We were ignoring our core product for months in order to spin up new long-shot concepts—none of which panned out.
In hindsight, it’s easy to recognize these as last ditch attempts to prop up the company’s flagging growth. The fact that none of these projects worked should have been a major concern.
But truthfully, at the time, I believed the company was going through a temporary rough spot. I thought our team was too talented, and our product too good, for it to last. I thought we’d figure it out, and the good times would be back before long.
Then the layoffs started.
The first round hit in spring 2022. One Thursday morning, everyone at the company received a last-minute invite to a virtual all-hands. On the call, the CEO informed us that, for the good of the company, he was laying off 10% of the company, or more than 100 people.
A minute later, I got an email that my job was safe—I had survived round one.
In fact, in some ways, the layoff was very good for me. It prompted a reorganization of the engineering department. I liked my new team, and some interesting new projects came our way after the reorg. I got another promotion and a raise.
Still, remaining at the company felt precarious. After the first round of layoffs, the CEO implied more layoffs were possible if the company didn’t reach profitability soon. As 2022 wore on, there was no indication profitability was anywhere in sight.
Hedging my bets, I started interviewing and got an offer from an established software company. That company’s CEO was on the record saying they had been profitable for years, so it seemed like a safe place to weather the storm. They were also known for great benefits and work-life balance, two things I’d missed while working at a chaotic startup.
Clearly, I should have taken that offer.
Instead I took it to my then-bosses and used it to negotiate a bit more cash and stock. After we reached an agreement, they told me I was an important part of the company’s plans and they were happy I chose to stay.
Not two months later, the CEO announced the second round of layoffs, and I was out of a job.
I appreciate the necessities that lead to layoffs: paying salaries requires money in the bank. When the money isn’t there, people have to go. Fair enough.
But the company’s leaders did screw up, repeatedly, in ways that made us vulnerable to a downturn. That’s true too. For example:
- The company could have focused on profitability earlier, so that it wasn’t impossible to achieve once VC funding dried up and being profitable became a necessity.
- The company could have wasted less money on failed growth projects that yielded zero return and then got killed. It astonishes me to consider how much cash and how much effort was wasted on major projects that led to nothing, when we would’ve been better off playing tiddlywinks—at least tiddlywinks wouldn’t have burnt through so much runway.
- Instead of frantically looking around for cheap wins and growth hacks, the company could have focused on building a better product, with better service, that gradually earns marketshare over time.
- Or, failing all that, they could’ve just timed the market right and exited in 2020/2021.
And on besides all that, there was the lying.
It seems harsh to say leadership lied to employees about the company’s prospects, but I don’t know how else to describe the total lack of candor or transparency about the company’s struggles, coupled with the frequent reassurances that the company was prepared to thrive in a downturn. Most of us never heard a hint that anything was wrong—quite the opposite—until the CEO got on the Zoom conference call to announce layoffs.
Granted, it would take a brave CEO to be honest about a company’s struggles before layoffs make honesty unavoidable. I’m only noting that I would’ve respected such honesty far more than the smokescreens we got instead. I’m sure many of my colleagues laid off with me would feel likewise.
I write these things not only to vent (though the venting feels incredible).
I’m writing also because nobody else is acknowledging what went wrong. In public statements about the layoffs, the company blamed a historically-fast downturn in their sector of the economy. Privately, while communicating the layoffs to the company, the CEO read a statement that said he took full accountability, but the statement never mentioned accountability for what. What actually went wrong?
From what I can tell, what went wrong was that the CEO (and the company leadership generally) built a company that burned more money than it earned, was nowhere remotely close to profitable, and was unsustainable except by regular injections of investor cash. When those investors got skittish, it collapsed.
The entirely-foreseeable economic downturn exposed these problems, but it didn’t cause them. Blaming the broader economy for the company’s troubles won’t hold water.
The company’s problems were caused by shortsighted strategy and bad decision making. Those decisions, on the part of company leadership, have now led to:
- the company’s valuation dramatically tanking
- countless projects shuttered and years of effort wasted
- and of course layoffs, and the havoc they wreak across hundreds of employees’ lives
Despite the troubles, the company continues on, for now, with the same CEO in charge. Do I trust him to undo the mess he made? With this track record, I wouldn’t trust him to fold my socks. But I wish him luck all the same.
Napkin-math tells me I spent about 1000 days working for the company. Most of those run together, but the last one, the day I got laid off, is indelibly clear in memory.
The CEO announced the layoff on a Zoom call first thing in the morning. Unlike during previous layoffs, I didn’t immediately get an email that my job was safe. I stared at my inbox for ten minutes, waiting for something, and then the invite arrived for an “offboarding and next steps” meeting with my boss and an HR rep. My browser tabs started refreshing as all my work accounts were shut off. It was finished.
The meeting wasn’t for another hour. I went and told my wife that I was getting laid off. I’d been telling her for a while I expected more layoffs, so this wasn’t shocking news.
Outside, it was a spectacular fall day. We went for a walk around our neighborhood to kill time before the call. While working for the company, I never had time for midday walks. Now suddenly my calendar was gloriously clear.
As a family, we were well-prepared for a layoff. My wife works at a stable, established company, and her job alone pays more than we really need. Plus we’ve been diligent savers for a long time. So temporarily losing one income barely registered, financially or logistically.
But how about about spiritually? Emotionally? The main thing I felt, while I waited for my official “offboarding” call, was free.
For years, anxiety over the job and my responsibilities at the company had poisoned my thoughts, prevented me from ever totally clocking out or enjoying anything outside of work. As much as I wanted to quit and and do anything else, I felt an obligation—stupid, in hindsight—to stay. That sense of obligation kept me at the company far too long. I needed to leave. The layoff finally made it happen.
To be clear, I blame the company’s leadership for tanking the operation, but I don’t blame them for embroiling me in the mess. I did that to myself.
I see now that I spent four years at the company hoping for somebody else to make me rich; to succeed on my behalf. I wasn’t calling the shots. I wasn’t even in the room where the shots were called. Whatever my contributions, I was never significant enough to make the company a success or failure.
I was a barnacle, hoping I’d glommed onto the right ship.
I had some sense of this all along. It had occurred to me that even if the company blew up and made me fantastically wealthy, I wouldn’t feel proud of it. Is a lottery winner proud they picked the winning number?
I would feel grateful and fortunate. But I wouldn’t feel that I, personally, had accomplished much.
Four years at the company taught me a lot. New technologies. Team and company dynamics. Technical and strategic mistakes I hope not to repeat.
But above all, my takeaway was this: It’s time I took responsibility for my success. Rise and fall on my own merits. No more delegating my outcomes to people higher up the org chart. Certainly no more working for companies where my contributions are so minuscule, I feel neither pride nor regret in the results.
I’m still not sure what that means, concretely. After the layoff, I found more work quickly, but I haven’t really decided what’s next.
Want to read the rest of the story?
Subscribe to Lumpcorp's monthly newsletter.