Life in an Orthopedic Startup – what’s it like?
What’s it really like working at a startup? by Tiger Buford
Background – This article is written for all of the people who I have met over the years in Orthopedics and Spine that think they would like to work at a startup. They usually have a rosy picture of what life is like at a startup that includes fantasies of fast-paced fun, creativity and playing ping pong in the break room. The reality is different. The work is long, hard and intense and the vast majority of startups don’t make it.
I have had the fortune of working for three startups with as little as two people to 18 people – NovaLign (now Sonoma/Arthrex), Active Implants and Ellipse Technologies (now NuVasive). I have also worked for three larger companies – Smith and Nephew, Sulzer/Centerpulse, and Wright Medical so I understand how vastly different these companies can be.
Startups are not for everyone, but many people thrive in startups. There are pros and cons. There are enormous differences in focus, in stability, in daily work, and in responsibility and learning. To illustrate, I offer the contrasts below. Disclaimer: my comments are entirely general and are not targeted towards any specific companies.
SIDE BY SIDE COMPARISONS
BIG <–versus–> STARTUP
BIG – Low. Very little ongoing business risk, other than mergers and acquisitions that shake things up. This risk avoidance extends into avoiding disruptive new products, and being very careful with IP and surgeon contracts. Employees can get moved around occasionally, but it’s generally difficult to get fired. However, historically there have been reorganizations and economic situations that have caused layoffs by the big ortho companies.
STARTUP – High. Weekly and monthly business risk. The company could lose funding, fail in technical testing, fail in regulatory testing, fail in patent review, spin off into another company, redirect the technology and team, etc. Employees can get fired or moved easily as the focus shifts.
BIG – Slow and steady. Maybe a 5% increase in pay and 40% more responsibility. A stable looking resume of working at a big company for a few years, but not more than 10 years. Stock options usually have such a high strike price that you often find yourself “under water” for years.
STARTUP – Great work experience with a potential payoff. Most startups fail or flounder, but some make it big. Stock option strike prices can be very low, especially if the company hasn’t gone through a C or D round. One day, your stock options could be worth zero, or a very large bonus if you are a professional, or perhaps millions if you report to the CEO. Other rewards are learning new skills 3X faster than at a big company. You will have more choice to do what YOU want, not what someone tells you need to do. A work environment with a sense of urgency and chance to contribute daily. There is inherent job satisfaction in startups because your work makes a tangible difference each day. Even after the startup fails (stock options = 0) most people will join another startup for these softer rewards listed.
BIG – Defensive. The fundamental principle is to protect the core business. There are typically hundreds of surgeons trained on legacy products and investments in thousands of implant and instrument sets around the world. Management is scared of big ideas.
STARTUP – Offensive. Take chances, innovate and be disruptive with a better way of treating the patient. Projects will fail or succeed quickly. Don’t spend precious resources on long term projects. Read Peter Thiel’s new book Zero to One as he really nails this.
BIG – Quarterly earnings. The focus is the endless 3-month cycle of delivering quarterly earnings that is driven by the shareholders and the public market expectations.
STARTUP – Milestones. Startups lose money each month, so the focus is reaching a critical milestone while minimizing monthly cash burn. Each milestone limits business risk and increases the valuation of the company. These key milestones could be proof of concept, a key pass/fail R&D test, a regulatory clearance, early clinical data, a demonstration of early sales, etc.
BIG – Defined box. Employees have well defined job descriptions and most people work within their job description.
STARTUP – Undefined and no boundaries. Sometimes employees have written job descriptions but they are really meaningless, because employees work on everything. I have seen CEOs help assemble furniture, paint, change the water cooler, etc.
BIG – Formal training programs. Employees usually have training agendas – corporate integrity training, etc.
STARTUP – OJT. Employees are thrown into deep end – here is your desk and your cube, good luck!
BIG – Regular weekly and monthly meetings for sake of meeting – most meetings are informational in nature, often no actionable direction is created.
STARTUP – Spontaneous meetings to get things done and make decisions and eliminate risk.
BIG – Wasted motion on stuff that doesn’t matter, such as messaging, politics, reporting, presentation, meetings to plan meetings, etc.
STARTUP – Little wasted motion, but priorities can shift quickly, and often. If an activity doesn’t reduce business risk or move the company closer to a key milestone, then don’t do it!
BIG – Opaque. Star performers do not become stars because of their performance. They are typically championed by management. You probably know some idiot who got a big promotion and nobody knows why. On the flip side, under-performing employees can easily hide and goof off deep in a department. Big companies have “dead wood” throughout the organization.
STARTUP – Transparent. No place to hide or goof-off. Everyone in the startup, from the CEO to the admin, knows who the star performers are. Row boat analogy – if an employee is not rowing the same direction as the team which takes the boat off course, then the team will replace them with someone who is rowing in unison.
BIG – Slow. Communication is slow, unclear and can be politically-based.
STARTUP – Fluid. Communication is instantaneous and clear. Information is delivered directly from the decision makers. You better stay close to your email and cell 24/7.
BIG – Status quo. Sense of supporting slow organic growth with upsetting things, just continue to iterate and grow sales. Employees often feel like a cog in a giant wheel.
STARTUP – Survival. Sense of urgency every day to innovate, reduce risk and reach milestones faster than the cash is burning. Employees feel that they can make a difference every day.
BIG – Complex. Deep layers of organization structure, can be a matrix, can have dotted line responsibilities. Most people have little interaction with upper management.
STARTUP – Flat. Usually about 2-3 layers total. Everyone has access to CEO.
Start of the Day
BIG – Driving to work thinking about the meetings to endure and where to go out for lunch.
STARTUP – Driving to work with anticipation of the day what you will try to accomplish today.
BIG – Retrospective. Employees are evaluated based on what they did do for the company last year.
STARTUP – Prospective. Employees are evaluated based on what they are going to do for the company today, tomorrow, and this week?
Sales and Marketing
BIG – Power. Sales is the engine of the company and Marketing controls the brand. Both very important drivers.
STARTUP – Absent. Rarely has an inside sales employee, but may have one marketing employee.
BIG – Par. Compensation is commensurate with the market and employees cannot really have an effect on the bonuses and stock incentives.
STARTUP – Below market. Compensation is typically lower than at the big companies and you have a direct effect on the valuation of the company each day so you can help to make the stock options meaningful one day. Bonuses are seen at about 1/3 startups.
What did I miss?
Drop Tiger a note… startups@OrthoStreams.com