As the cards got dealt, I sat on the sidelines watching my friends bet in Vegas. Chips were thrown in, taken away, thrown back in, and sometimes doubled or tripled. We all know how gambling works. Sometimes you think you’ve got a good enough hand to take the bet.
I couldn’t help but feel like those chips were an allegory for my life back in S.F. You go around placing bets, and some pay out while others fall flat. It can be anything: the weather staying nice, the bus coming on time or your company staying in business.
San Francisco is a lot like Vegas. Everyone thinks they’re going to win. It’s addicting and consuming, and it hurts hard when you lose. I’ve seen founders go all-in and cash out big, companies with bright futures shut their doors and everything in between. It hurts hard when you lose.
So what happens when you lose it all? In Vegas, you’re done. Nothing left to bet, no reason to be in the casino. At that point I would leave. In S.F., it isn’t so cut and dry. If a startup fails, usually life isn’t over. Even if someone has spent all their money, they can always get another job. There is always another table to gamble at when there is a strong skill set.
When a startup wins, it could be a matter of a few hundred thousand to several million dollars. For the average person, that win is unprecedented. I can’t imagine what I would do at a high stakes poker table. It requires intellect, good judgment, sizing up the competition and making moves. To win, some or all of these things need to happen. A player needs to be ready and confident, as if they were running a company. The big decisions depend on them.
Sometimes, people just break even. They can walk away from the table either relieved or asking themselves what they were doing there. When I don’t vest at a company, it’s like I am just spending my time watching from the sidelines while others have skin in the game. But when you get equity — especially at multiple companies — it’s like collecting a ton of lottery tickets and waiting for your numbers to come up. It’s not a bad strategy.
But what about folding? To me, this is like giving up. Chips are in and the player gets bad cards and walks away. Do people actually have bad experiences and walk away from tech, or are their salary and perks so addicting, that a person can rationalize another game. Because why not? The chances of breaking even or gaining something seems good. I for one have done that exact thing. There have been companies that have either offered me jobs or I have worked for that I have had to walk away from. Surely I am not alone.
When you lose in a casino, you can just disappear into that smoky crowd. No one will even notice. But with startups, your loss and gain is reflected on paper. A résumé. Unlike the traditional pattern of sticking with a job for a while, jumping from one company (or game) to another is the new normal because these games don’t always go in your favor.
“Bad luck”, they call it, when you get dealt bad cards. In the past year, startups have tightened up their spending and laid off a ton of people. The fewer employees, the longer the runway and higher chance of reaching profitability. It is functioning more like a casino than ever before. The more people lose, the better the house does.
Think about what that means to VCs. If they choose well, they can make a killing. But if they choose poorly, they have wasted millions of dollars at the high roller tables. Again, that is the name of the game: high risk, high return.
If a player is smart and knows how to play the game, they will most likely be fine. Their résumé, bank account or fund won’t suffer. They get used to gambling. No matter where you come from you can never lose the experience gained, just the irreplaceable time you spent getting there. Who you are is worth more than money.
With a background in journalism, Melissa Eisenberg has been working in the tech industry for eight years, currently leading the SF FashTech community.
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