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Hiring is in full swing on Utah’s Silicon Slopes—and so, too, are the layoffs.

Utah Business

Hiring is in full swing on Utah’s Silicon Slopes—and so, too, are the layoffs.

Is A Job At A Startup Right For You? 

Multiple up-and-coming Utah companies, including Canopy and Younique, as well as long-term anchors such as Overstock have cut hundreds of tech jobs in recent months. These waves of layoffs have led some to ask whether taking a job at a startup is ever a good idea.

No company is layoff proof, and Utah’s larger startups—those with 100 or more employees—aren’t necessarily any more or less stable than other businesses, says Troy D’Ambrosio, executive director of the Lassonde Entrepreneur Institute at the University of Utah. But for smaller, truly startup phase companies, he says, prospective employees need to be comfortable with volatility and a high level of risk.

“It’s certainly not for the faint of heart,” he says. “People have to understand going into it, there are inherent risks of going into that, and the chances of failing are more likely than succeeding.”

But for the right person, Mr. D’Ambrosio continues, taking a job at an early stage startup could also open the door to immense opportunity.

“That’s where you create the opportunity for wealth, rather than a salary,” he says.

With recruiters out in force, how can employees know if that startup job is truly right for them? Local experts say it comes down to personal timing and career goals, but candidates should also consider the nature and even location of the job in question.

Career Considerations

A startup can be the perfect environment for someone who’s looking to fast-track their career in a flexible, even playful environment, according to Justin Rohatinsky, who manages recruiting firm, Robert Half’s Salt Lake City technology branch.

Job titles at startup companies tend to be less rigid, allowing creative thinkers and problem solvers to develop skills outside traditional job descriptions. For some, however, the workload can prove too intense and lead to burnout.

Opportunities for personal and professional growth tend to go hand-in-hand at startups.  “If you get in early,” Mr. D’Ambrosio says, “all the people are hired underneath you, and it raises you up the company very quickly.”

Don’t expect that progress to translate to a management position at a larger corporation in the event the startup fails, Mr. D’Ambrosio warns. Large companies still tend to hire leadership from within a defined pipeline. For professionals aiming for the C-suite, he says, a traditional career path is the better choice.

Timing it Right

Professionals can think of startups the same way they consider investments, Mr. Rohatinsky says. A 20-something with $100 would invest that in something high risk, but with potentially high returns, because they have plenty of time to make up for the loss if it doesn’t work out. Those close to retirement, on the other hand, should choose something more conservative.

For professionals who are single, still living in an apartment with perhaps nothing but a car payment to their name, a startup can spell great opportunity, Mr. Rohatinsky says. The odds of success may be low, but young professionals who have yet to settle down can afford to take the risk.

Not everyone should or can take a startup position out of college. Professionals with sizeable student loans may find startups are unable to pay salaries sufficient to service their debts, Mr. D’Ambrosio says.

For himself, Mr. D’Ambrosio found success by breaking into startups later in life. Established professionals who feel secure in their careers, especially if they have a spouse whose job is stable and can provide benefits, have more freedom jump at a potential opportunity.

Location, Location, Location

While much depends on personality and preferences, both Mr. D’Ambrosio and Mr. Rohatinsky say professionals should vet any startup prospect thoroughly.

Startups often pay less than market rate, and try to make up for it by offering equity and stock options. But that equity, Mr. D’Ambrosio warns, will be worthless if the company folds, and an early-stage startup could find itself unable to make payroll in a matter of months without sufficient funding.

“Ask the people hiring you to tell you how much money they have in the bank, and where they are in the fundraising process,” he says. “If they don’t tell you that, that’s a red flag.”

Job candidates can also search online, use social media and talk to contacts within the company to get a sense of the company’s financial situation and stability.

Where the company is located is also a factor. Utah-based startups are currently fairly stable thanks to a local ecosystem that fosters small business and entrepreneurship. And when layoffs do strike, Mr. Rohatinsky says, employees with startup experience may discover that they’re in demand among other employers.

“If I’m in Utah and thinking about joining a startup, the risk is a lot less,” Mr. Rohatinsky says. “If we were in a market where the supply of these people is high and demand is very low, then working for a startup might be a lot riskier.”

Emma Penrod is a journalist based in rural Utah who covers science, technology, business and environmental health. She writes a weekly water politics newsletter at pactio.us/host/emma-penrod and Tweets about the latest science and industry news @EmaPen. When she's not writing, reading or researching, she's hunting sagebrush-scented air fresheners.