MasterClass CEO: Joining an Early-Stage Startup Is Less Risky Than You Think

Ask young people if they would one day like to be an entrepreneur and in poll after poll (at least before the current crisis) a healthy majority will answer yes. It’s not hard to guess why. The upside of startup success is gigantic and even if you’re aiming for a smaller business, the self-employed report being more satisfied in their careers than employees. 

But while plenty of folks daydream about entrepreneurship, many fewer actually take the leap. One big reason is perceived risk. Being your own boss has big, obvious upsides. It also has at least one just as glaring downside: many businesses fail, and even if the one you’re involved in survives, the road to consistent profitability is likely to be rocky and long. 

That fear of job loss and instability keeps many from pursuing their startup dreams, but CEO of red hot online education startup MasterClass David Rogier claimed on Twitter recently that your worries are probably based on faulty logic. Founding or joining that early-stage venture isn’t near as risky as you think it is. 

Rogier kicked off his tweet storm on the topic by drawing an important distinction between job risk, which is very high in startups, and career risk, which he argues is much lower: 

Nervous about joining an early stage startup? Let’s talk about risk. There are two types of risk: job risk and career risk. People think they are the same. They aren’t. They are very different.

— David Rogier (@drogier) July 13, 2020

Job risk, as the name implies, is the risk you’ll lose your job. If you’re starting a business or joining one at an early stage this is inevitably sky high. But career risk, or “the chance you’ll hurt your career in the long run,” Rogier argues, is in fact lower than if you stayed in your job at a big company, at least in many situations. 

First off, that’s because you learn more at a startup, accelerating your career progress. “At a startup you’re going to get tons more responsibilities, usually a promotion in title and you’re going to learn a lot more. If the startup is successful – you’ll be seen as a big part of the reason and climb fast,” he writes. 

Still, if your startup fails, you’ll be out of a job. While that’s true – and you should think through your financial plan for this possibility before you decide to chase your startup dreams – Rogier insists you’re unlikely to be out of a job for long. 

“You’ll have held a bigger role, learned a lot, made tons of close connections and if you’re in a startup hub (e.g. SF, LA, NYC, Austin) – everyone is used to it. You can always go back to a big company or to another startup,” Rogier predicts, though he cautions this is less true the further you go from startup centers and the less of a high performer you are. 

But assuming you don’t live out in the middle of nowhere (and the coronavirus-related remote work revolution doesn’t make geography entirely moot) and you’re good at a job, a startup gig or founder role is probably way less risky in the medium and long-term than you think.