Change Work Life

What’s it really like to work at a startup? - with Steve Grace of The Nudge Group

• Jeremy Cline/Steve Grace • Episode 194

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#194: Steve Grace is the CEO and Founder of The Nudge Group, and an expert in recruitment and storytelling. He explains what it’s like to work at a startup, the different types of startups that exist, and the common misconceptions people have about startups.

What you’ll learn

  • [01:20] Steve’s experience in business and startups.
  • [03:03] The difference between a small business and a startup.
  • [04:09] The popular view of what a startup is.
  • [04:35] The motivation behind founders of startups.
  • [05:56] Common startup terms and what they mean.
  • [09:50] The pay structure startups use and why their salaries are often lower.
  • [11:37] Common misconceptions about working at a startup.
  • [12:56] The different phases of a startup.
  • [15:40] The personality of startup founders.
  • [17:08] The negative misconceptions about working for startups.
  • [21:18] The unique challenges of working with a startup.
  • [23:17] The key benefits of working with a startup.
  • [25:34] The work culture startups have. 
  • [27:31] How valued flexibility is in the workplace.
  • [28:00] What drives startup work culture.
  • [29:25] How work culture and job roles vary as a startup grows.
  • [33:39] Why startups struggle to retain their culture as they grow.
  • [37:10] How to take responsibility for your career.
  • [40:02] How to respond to interview questions at a startup.
  • [42:11] The best advice for someone looking to work at a startup.

Resources mentioned in this episode
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For the show notes for this episode, including a full transcript and links to all the resources mentioned, visit:

https://changeworklife.com/whats-it-really-like-to-work-at-a-startup/

Re-assessing your career?  Know you need a change but don't really know where to start?  Check out these two exercises to start the journey of working out what career is right for you!

What's it really like to work for a start-up? Is it all chaos? Is it inherently more risky than working for a large established corporate? What are the benefits, and what are the downsides? That's what we're going to be talking about in this week's episode. I'm Jeremy Cline and this is Change Work Life. Hello and welcome to Change Work Life, the show that's all about beating the Sunday evening blues and enjoying Mondays again. If you want to know how you can enjoy a more satisfying and fulfilling working life, you're in the right place. When you think about start-ups, what images come to mind? Is it a quirky brightly coloured open plan office in a hipster part of town with beers in the fridge and a slightly chaotic atmosphere? What's it really like to work in a start-up, and how do you know if it's right for you? My guest this week is Steve Grace who's the founder and CEO of The Nudge Group, which specializes in connecting start-ups and scale-ups with world-class talent. Steve, welcome to the podcast. Thank you very much. I've been looking forward to this. So, Steve, why are we talking to you? What's your background? What makes you the expert on start-ups and scale-ups? I'm sitting here embedded, actually not tonight because they've all gone home, but I'm being embedded in the start-up ecosystem of Australia, I guess. I think there's a couple of things that would probably be relevant. One, I've got four or five companies I've started now. So, I've got five of my own start-ups, although I've only got four that are running now, and I've sold the others. But my latest, I guess, venture, Nudge, is totally immersed in start-ups, not just here in Australia, but also globally. So, we help them with all kinds of things. And we've worked now in the last five years with over 400 start-ups, which is nuts. Right? And they vary in where they are in the life cycle. Some are pre-seeds, some are seeds. Well, we can talk about these terms later. Some are Series A, B, C, D. Some have grown beyond that. Some are even in inception and in people's minds. And we work with incubators, and we work with co-working spaces, and we work with VC funds and private equity. So, I think I've just, over that period of time, particularly the last five years, having worked quite closely with over 400, experienced just about every kind of different start-up there is. Because much like any industry, you know, you could say, what's it like to work in a recruitment company? Depends on the recruitment company. What's it like to work in a start-up? It depends very much on the start-up and where they are. So, hopefully, with all that experience, I've got some knowledge in there. Yeah. I think you've just about established your credentials. All right, so we'll come to talk about some of those terms that you've just mentioned in a minute. But what is it that makes a start-up versus something that isn't a start-up? You know, I'm kind of thinking that there are lots of small companies out there which may have been running for 20 years. What is it that makes a start-up a start-up? It's a really good question. I've been asked that a couple of times, actually. I think a small business that is established, that is most likely profitable and sustaining on itself, that has no desire to be any bigger is a small business. A start-up is essentially an idea. And in my definition, a start-up is something that wants to become a lot bigger. There is a desire there to grow. There's a desire there to dominate a market in a region, such as Australia. There's a desire there to be a global business. There's a desire there to be the first to do something. You know? Whereas a small business is usually a business that already exists in numbers of other forms, and someone's grown a business to the size that they're comfortable with. And it's more so a lifestyle business than it is growing into something bigger, I guess. That's how I would define the difference. And then, obviously, a scale-up is a different thing as well. That's an even more difficult question. Okay. So, there's a desire on whoever's founding the start-up to create this big thing. They've got their eye on some kind of domination, whether it's work domination or sector domination or something along those lines. Yeah, I think so. And I think, if you look at the popular view of the start-up, it's usually something that is backed by a venture fund. So, it's a non-profitable business that requires people to invest in it to get it to a point where, one, it's either sellable, so it can become part of a larger entity where it doesn't matter whether it's profitable because it's adding value, or two, it becomes profitable, gets listed on the stock exchange or something like that. And that journey can be quite long. Is the motivation for founding a start-up always some kind of an exit? Definitely not. I think if you listen to any podcast on start-ups, and you listen to any successful founder advising potential founders, they'll always tell you that it has to be about solving a problem. It's not about money. It's not about an exit. It's not about lifestyle. If you want to succeed, and obviously, we know that there's a very high failure rate in start-ups, although that is inflated, but you have to want to solve a problem. And most of the really, really successful ones are something that someone has experienced personally, upset them or offended them to such a state that they went out there and decided that's not acceptable. I'm going to go and change that. That's why the advice is always, don't focus on the exit, don't focus on the money. But then, on the other side of the coin, you'll also hear just as many founders say, you have to think about your exit, and you have to think about your plan because otherwise, how can you aim towards it? So, it's kind of contradictory, but I think, in my view, it's probably, in reality, 50-50. I reckon 50% of people start start-ups because there's a problem they want to solve. The other 50 do it because they want to make some money and retire or be the glamorous founder in the news or whatever it might be, potentially, what you could say are the wrong reasons. Some of the terms that you mentioned earlier around stage, funding stage, pre-seed, seed, Series A, B, C, D, what does all that mean? Interesting thing about the start-up ecosystem is it has its own language. And I, many years ago, used to run a course to teach people how to make the move from corporate into start-up. And the first thing you've actually got to do is learn the language. And the language, guys, gosh, there's so much of it. But I think if you're talking about stages, there's a number of keywords. The first one I use is not a funding stage. It's called bootstrap, and I'm sure people have heard that term but don't necessarily always know what it means. A bootstrap business is a business that hasn't taken any funding. So, essentially, the founder has either funded the business themselves, or the business funds itself with its own revenue. That is what a bootstrap business is called. And they typically take a lot longer to grow because they don't have the capital for rapid growth. Services companies can often be bootstrap because they don't require massive capital investment. But most start-ups, particularly technology start-ups, which is, I guess, what most people think about, require enormous investment to build the technology to a point where they can actually just start to sell it, and then even more so, to build it out and build features and products and make it better and better before it can turn a profit. And that requires funding that comes in the forms of maybe only a few things usually. You know, friends and family is obviously always one. There's angel investors, which are individuals who have spare money that they want to invest in businesses, and they usually come in at a relatively early stage. And then you sort of hit the venture capital market, which are companies that invest in businesses purely to help them grow. There's a few other forms of funding we can talk about later if you wish, but venture capital is where all the terms come. And the terms typically go pre-seed, seed, Series A, Series B, D, E, and on and on. And I think that I've never seen anyone get past Series F, actually, or maybe H. But they refer to the stage that the company is at. Right? So, a pre-seed company is a small amount of money, and it's usually when someone has formulated an idea. They don't know if the customers want it. They don't know if they can make it work. They haven't really built anything. It's really just an idea. Once they've got to a stage where that idea looks like it's going to work, they go into what is a seed phase. And the seed phase is where they find what they call product market fit, which is where they prove that someone out there is willing to pay for their product. And these stages will increase in terms of the amounts of money people will invest. So, they tend to start small, and then the larger ones are obviously bigger. Series A, B, C, D, E, F, H, they are just phases of growth. And what will typically happen is, if you raise money at Series A, and a Series A business is something that's a real business, they've got customers, it's proven, it's now, okay, we need to scale it, we need to hire lots of people, we need to hire marketing, we need to hire sales, all that kind of stuff, so they'll raise money to do that. And the Series B will be a continuation of that. And to get those fundings, what these venture capital funds will do is they'll set targets for them, very much like a salesperson or even schoolwork or something like that. And they'll say, 'Right, here's X amount of money for your Series A. Now prove to us you can make this work. Prove to us you're a good business person. Grow it by this amount. Get this amount of subscribers. Release these products, whatever it is those targets are, within this time frame, and then we'll give you some more money to continue going.' So I liken it to, I don't know how popular this view is, I liken it to a parent giving a child money. You know, if you can do this, I'll give you this. It's kind of like that. It's like, if you can behave like a bit of an adult and show me you can run a business, I'll give you some more money. That's kind of how it looks to me from the outside. I don't think any of the venture capital funds or founders would love that analogy, but that's kind of the way I see it. Does that make sense? Yeah. And so, when it comes to employing staff, so not bringing in cofounders or whatever, but employing someone, paying them a salary, is that something that can happen even at the pre-seed stage, or do they tend to be a little bit bigger before they start to take on workforce? It varies. Look, I think what you'll get in start-ups in that very, very early stage is you will get salaries that are significantly lower than what the market rate would pay. At this stage, you will often find that founders will give you equity. Now, equity is a share in the business. It's ownership in that business. They will get it at what is a very low valuation. As you can imagine, when a business is very young with an idea that's not proven, that equity is not worth an awful lot of money, because it could easily just fizz out. So, as a loyal employee coming in at an early stage, you might take 20%, 30%, 40%, 50% cut on your wage to get a percentage of equity on the promise that if you can make it work, that equity could be worth millions and millions of dollars later. And that's kind of how that works. But some people still will feel that there are certain roles that are so pivotal, and perhaps the founding team have really no idea about, that they might pay market rate. And that's a conversation they will have to have if they're raising money with their venture fund as to why they should be doing that. So, that doesn't happen often. You do find salaries in the early stages are significantly lower, but it's a little like, and I know you and I spoke about this months ago when we first met, it's a little like the fashion industry. The fashion industry, when I was growing up, was the most glamorous, as was photography, and as was magazines, but they paid the worst. And they paid the worst because people wanted to work in those industries, and they were seen as glamorous and fun. And I think start-ups have a little bit of that as well. Obviously, there's the economic side of it, but I also think there is some glamour in the start-up industry, which is completely unfounded. That leads nicely onto my next question, which is what are the common misconceptions people have about working for a start-up? So, I'd like you to think about both positive and negative in your answer. Gosh, there's so many. I think it's not so much misconceptions, I mean, there are some misconceptions. Obviously, there are the glamourized versions that you see on television. There's the WeWork stories, there's the Uber stories that we've all seen on streaming platforms. You know, it's not beanbags. It's not table tennis. Although there are beanbags, and there is table tennis, there's actually very little of that these days. It's not all fun. It's not drinking. It's not running around in crazy outfits. It's not all fun. It's actually pretty much the opposite. And the earlier the phase the company is in, the harder they're working. They're often working crazy, crazy hours. They're doing things that they don't know how to do. I think probably the biggest misconception of start-ups is that it's just like working in a corporate, but a bit more fun. Nothing like that at all. And I think there are very, very different environments that start-ups go through, and there are very, very different types of personalities that will fit into those start-ups. There are not many personalities that will fit into a start-up at a pre-seed and seed and still work well in a Series D and E. You know, that whole journey that that company goes on, the staff that are in it, it's unlikely many will see that whole journey through because they have to vary enormously. But it's a lot of work. I can explain the differences, if you like, between the phases because it's not too complicated. Would you like me to do that? Yeah. Sure. The biggest thing I see with people from corporates who want to move into start-ups is they want to go into an early stage, they want to get equity, they want to make millions, and all that kind of stuff. The very early stages of a start-up are utter chaos. There's very little resources. There's no money. There's certainly nobody to create a template for you or to show you where the form is or the intranet. There's nothing. There's literally nothing there. And whatever your job title is is almost irrelevant. You tend to have small groups of people who love ambiguity. They hate structure. They love going from thing to thing to thing. They don't mind not finishing things. They don't mind starting thinking and changing their mind and doing something else. They even relish that. They tend to be quite scatter-brained kind of people that think very differently and have lots of energy and just want to get things done. They don't need things to be done perfectly. They just need them to work enough to get to the next phase. That's a very different personality to, say, a Series B, where you've got a company that's getting quite serious. And people like that, in a company like that, are a disaster because they cause mayhem. You've got many more staff. Everyone's got very specific roles, and it's very, very clear what everyone has to do. And there is structure, and there are forms, and there are HR, and there are marketing. So, you take an early stage person, and you put them in a Series B or C, they cause absolute mayhem and often actually can be really damaging to the growth of the business. But then, you take a Series B or D person or a corporate person, put them in this environment, and they freak out because it's just not what they're used to, and they get frustrated because things keep changing, and they don't know how to do that. So, why are you asking me how to do that? That's not my job. So, you go from chaos into order, and there's all the phases in between. And I think the problem with people who haven't worked in the industry is they don't actually know where they fit. They think they do, but they don't. You can ask some questions, and there are interviewing techniques that will tell you. And most people will begin to understand that. The hardest part, I think, for us when we've recruited, particularly people who want to go to an early stage but are clearly not going to survive in that, is telling them that they're not suited to that environment. It doesn't go down well, ever. I don't think I've ever had someone go, 'Oh, yes. You're right. You're right. I'll go for those.' People get quite upset. They get quite defensive. They think that you're criticizing them. So, it's very personality-driven and much less skills-driven at the beginning. And I think that's a big leap for someone that's come from a larger organisation. Isn't a lot of what you've just said also relevant for the founders themselves? I mean, doesn't that mean that founders potentially struggle as the business grows and becomes a more serious business? Look, it does. Founders are another breed altogether. You know, there needs to be an element of huge risk-taking to be a founder, comfortable with that and not necessarily see it as risk-taking. Founders tend to have egos and need them fed now at varying degrees. There are degrees that are healthy, and there are degrees that are not. And founders do go through a journey. There's some really good stories about founders who haven't been able to let go at certain stages and cause problems, and some founders who have seen it all the way through. There are very few that see it all the way through, and I'm always blown away and impressed. Myself as a founder, I know where I tap out in terms of my skill sets. I'm much better in the early stage. And the reality is, if you can work out where that is, and you can delegate those roles and move away and become ambassador, hire a CEO, COO, chief of staff, whatever it is, and begin to relinquish the things that you are bad at, you will be a better founder. But at the same time, a little like being a parent, founders don't like letting go of their essential child. So, founder journeys are very well documented. Some great books and stories on it. But I think there's a lot more education around it now. But founders are a totally different breed to everybody else as well. So, yeah, there's a lot of interesting personalities in this ecosystem. It has to be said. You talked a little bit about some of the misconceptions, and I'm curious as to whether there are any deeply held negative misconceptions about working for start-ups, which aren't really that true? Yeah. There definitely are. I think a lot of people see it as very high risk and that there's a high chance they'll lose their job. This is just not true. If you look at data, which is what everybody does these days, interestingly enough, you're far more likely to be made redundant from a large organisation than you are from a start-up. Look, there's definitely a percentage of start-ups that will not make it, and they will close down. There's no question about that. But if you actually really look at the figures, statistically, you're far more likely to lose your job in a larger organisation over a cycle of maybe five to 10 years. So, at the end of the day, you don't have to make money as a start-up. You just have to get funding, and then you just have to hit the timelines. Right? So, if you've got the right team, there's no reason a start-up should fail, and there's no reason why you shouldn't be able to get paid. So, I think that's probably the biggest misconception. Now, you have to do your research. You have to look at who's funding them. You have to look at how crazy that founder is. Is that founder going to cause it all to collapse in a heap, or are they going to drive it through? And those are all difficult questions to ask, but they're no different than asking that question of a department within a new business. Let's say a big tech company decides to create a new department launching into a new area. If the person launching that department doesn't make it work, that department will get closed down or offshored. So, look, I think that's probably the biggest misconception that I get. I think that you don't get paid anything, that's also not true. You know, once you do get past those very early stages, there's some very attractive wages out there. I think a lot of people think they're going to get massive chunks of equity. I don't think people realise the small percentages of equity they might get. They might get 0.05%, which could be worth millions, but could be worth nothing. So, there's a lot of misconceptions about that. I think also there's a lot of people who think that no one's taking it seriously, that they're going to have to, I guess, almost change their personality. There's a lot of very serious people in the start-up sector trying to do a lot of very serious things. And I think there's a lot of people trying to solve problems that have real genuine meaning. And this is one of the massive benefits of start-ups is that, often in a larger organisation, regardless of what they may say in their policies about how they're trying to save the world, planet, charities, whatever it is, it's hard to connect in a large organisation, when you're in a start-up, and you're seeing what it's doing, you're seeing how it's solving a problem. And even if they do have a relationship with a charity, there's a very great fintech that has a really strong partnership with Parley around plastic in the ocean, and they live by that. And you can really connect with some of those things because you're right in there, and you're seeing it, and you can impact it. The things that you do in an organisation of 20 people impact everybody in that organisation. The things that you do in an organisation of 200,000 people, yes, they do, but it's very, very difficult to really get any feeling about that. So, it's a very different world, and it can be incredibly rewarding. And I do believe not just that the world has changed in terms of start-ups being much more prevalent now, and a lot more people are trying to do them, but I think COVID made a lot of people want to do something of meaning. I think when suddenly they've been in a job, in a rut, or a pattern or whatever you might have called it, and they were going along quite happy, and they were planning for their future, having that period at home gave a lot of time for people to reflect. And having the world potentially nearly the end and everyone nearly die, which, you know, was on the cards, right, having that go through their minds has made a lot of people go, 'You know what? I really want to do something.' And I think start-ups are the place that do that, and I think that's driven a lot of the culture that has grown. Australia has obviously exploded in start-ups compared to where it was. It was in a pretty poor place. It was an easy rise. But I think all of this has come together to create this perfect storm right now. So, let's build a little bit on some of what you said. So, again, looking at both the positives and the negatives, what are some of the unique challenges, and what are some of the unique benefits of working for a start-up, compared with working for a large corporate? Unique challenges would be everything is changeable in the heartbeat. I think if you enjoy a constant stream of change and excitement and not knowing, uncertainty is something that human beings as a whole do not like, but at the same time, we also get bored if we don't have any, right? So, you've got this weird situation where humans hate uncertainty, shown by COVID, but they also hate to know exactly what's happening, that's boring to them. And in between, everyone has varying levels. So, I think one of the unique challenges is start-ups offer a lot of uncertainty. That is very attractive to some people and not attractive others. Most people have no idea if they haven't worked in one, whether it is or isn't. And I think that's one of the biggest challenges when they come in. I think one of the other biggest challenges when they come in is that, really, you kind of have to take responsibility for yourself and your career in that start-up. No one's going to come along and have a one-on-one with you and give you your plan for your future and tell you how to excel in this business. If you want to excel in a start-up, you have to be, in some ways, entrepreneurial. You don't have to be an entrepreneur per se, but you have to have an entrepreneurial spirit and go,'You know what? I'm going to make this happen for me.' Which is a little bit counterintuitive for Australia. It's very, very common in the US, not so common in the UK, and probably even less so here in terms of I'm taking responsibility for myself. People don't do that. They're getting better at it, and the younger generation are far better at it. But I think that's probably the biggest challenge I see for most people coming in is that suddenly nothing is looked after for them. It's like leaving home, I guess, from parents. There's a lot of children and the parent analogies here, and I think they're very relevant in the start-up world. You really have to grow up and go, if I want this to happen for me in this business, I'm going to have to do it myself. That's probably the greatest challenge. What were you saying the other, greatest benefit? Yeah. What are the benefits? Look, it has to be the camaraderie. The way people in this ecosystem, it shocked me when I really, I'd always gone around the fringes of it in all my career, but when I totally immersed in it, it really shocked me how the people in this ecosystem very much have the least amount of resources, the least amount of time, and they are the most generous with both of those outside of that. And the feeling of being part of a team, the feeling of doing something together, the feeling of having leadership that really bonds people on a common goal is just incredible. You don't get that as easily in a big corporation. And that's not the big corporation's fault. It's a different environment. It'd be incredibly hard to do that in a larger environment. Now you get, obviously, departments and so forth in larger organisations, but it's just different. The energy and the positivity because, again, you need that. You can't be negative in this environment. No one will like that. It's an environment of uncertainty. You need that positivity. It really does, I think, catch a lot of people by surprise, and it's very, very addictive. And you find that it creeps into other areas of your life, which I think is a positive. So, I think that's the biggest benefit. Negativity, hours. Hours, the hours are long. They are, they're going to be long. They're going to be up and down. We talk a lot about work-life balance, we talk a lot about hustle culture, getting sleep, all these kinds of things, and all these things are very important, and you should take notice of all these things, but if you're in a start-up, there are going to be periods of time where those things have to go out the window because what needs to be done needs to be done, and no one else is going to do it. And if you don't do it, the implications are highly serious. So, you also have to be prepared to know that there will be times when you might be working late. You may not be able to do this. You may not be able to do that. And I think that's the biggest challenge for a lot of people who aren't necessarily used to that. And everybody just immerses themselves in that. That's really interesting because there's been a lot said, certainly more recently, and certainly post-pandemic, how Gen Z and millennials, that's not the lifestyle they want. They don't want to work all the long hours. They're happy to work hard, but they want work-life balance. They want a life outside work. So, are you seeing any kind of shift in the way start-ups are approaching that, or does it just mean that there's a smaller pool of people who want to do that, who want the hustle culture, who want the long hours? Look, I think there's a generalisation of this. I see just as many young people who are willing to work the hours. I think the difference is they want to work the hours on their terms. So, there is a big, big difference between working in a start-up and knowing that a project has to be done because you do know. You know, the transparency in start-ups is far greater, of course, than it is in large organisations. So, the willingness to do the work for that period of time is there. Whereas in a large organisation, if someone expects you to stay, but there's no real reason, and you can't see it, you're just told you have to do it. It's the way it's approached. Also, it may interest you to know that most start-up founders are not out of college when 20 years old. Most start-up founders right now are sort of late 30s, early 40s. So, it's an interesting fact in itself, that there's this huge shift of the age of founders that has risen. And, again, I put this down to COVID and people going, 'You know, I need to do something. I want to do something.' But I don't believe that the young generation is lazy. I think there's lazy people. Of course, there are. There's lazy older people. The difference is, I think, that if you are mid-career and lazy, you can go and sit in Commonwealth Bank or NAB or ING or IBM or any one of these enormous organisations and quite easily hide. And it's almost impossible for them to know that you are lazy and not doing that. But if you are young, it's impossible to do that because everybody's watching you. So, I think there's probably about the same percentage of lazy young people and lazy older people and middle-aged people and whatever is the appropriate thing to say. It's just not as visible. It's much easier for them to hide. Now, again, that's not a popular view. But I see, and I've had many people in that generation who I see who work far harder than a lot of people who probably are also writing those articles. Yeah. I've got to say, the word lazy wasn't quite the one that I was kind of looking for because I don't think people are against working hard. I think it comes back to what you were saying about it being on their terms. So, my background is as a solicitor, and if I had plans for Valentine's Day and then, the partner that I'm sitting in with says, 'Oh, I need this document for a meeting tomorrow. Can you help me search my office which is an absolute pigsty to find it?' You know, I'm feeling pretty hard done by in that kind of situation. Whereas, if it's, I think it was purpose-driven was the phrase you used, if people can see why it's important, why they're doing this, then there's going to be much greater motivation rather than just, oh, well, this is what I have to do when I'm a junior in order to advance. Yeah. I think you're right. I think that there's a lot more self-control or self-discipline in start-ups. I think there's a lot more freedom. There's obviously a lot more working from home. There's a lot more trust. It's very much outcome-driven rather than time-driven. You know, I think that's a big difference you'll see. You don't see start-ups clock-watching. They are watching what the outcomes are. And I think if you are outcome-driven, people will work whatever you need them to work to hit the outcomes because it's clear. Asking someone to search your office last minute, that's not outcome-driven that you were aware of all week. Right? That's, yeah, well, we've all been there. Let's not get into post-traumatic stress. I mean, I'm old enough to have lived through that well. So, I think it's being treated more like a grown-up. So, I think it's a world where there's probably a lot more trust. Now that comes with its own challenges, and people take advantage of that, but that happens in any environment. There's always going to be people that take advantage of that. I think in a start-up ecosystem, they tend to get found out a little sooner and a little quicker. They also don't tend to be gravitating towards that environment anyway. You talked about the way that the companies evolved, and so the people evolve as start-ups go through their life cycle and move from pre-seed, seed, Series A, and so on. What are some of the ways that both the working culture and also the roles, the sorts of employees that they're going to have, how will those vary depending on what stage you're at? So, I think one of the hardest parts for any founder is when they move from a start-up to a scale-up. Now I'll give you my definition of what that means. It's not defined anywhere accurately. It's just my version. Just to be clear, before everyone jumps on and goes,'You're wrong!' To me, the view of a start-up to scale-up is when they do not have what I would call or what is called a runway. Now a runway is a determining period of time before the money runs out. So, you've been given two million bucks. You know that it costs you X amount of money to run the business this month. You know how long that money is going to run until it runs out. That's called a runway. I think when a company hits where they've got their own revenue, or they've got such a large amount of funding that the runway is not within the next two or three years, that's my view they're becoming a scale-up. They're no longer a start-up. And that's when a lot of the roles will change, and that's when founders have to change a lot of their stuff. So, founders believe, unfortunately, and you have to have a lot of romanticism, I think, to start a business, believe that the first five people that they start the business with will be there at the end. They will be billionaires on their boat, and they'll be happy, and everyone will be just so grateful to them for giving them opportunity. That's not the reality. Very few of those early-stage buyers will make it past that sort of start-up to scale-up phase. And the reason being is that, like I mentioned earlier, in the early times, you need someone who's willing to do four different jobs, who can change and do something they've never done before, who can look things up, who can make things up, get involved in everything, have their pies in everything, they know what's happening across the whole business, they love this ambiguity, they love the energy, they love the chaos. And that's great. But once you get to that point where you go into start-up mode, then you need structure because you can't scale past a certain point without structure. So, then suddenly, you have roles that are very, very specific. You will have not someone who's doing product and marketing, you'll have maybe a whole team of marketing people who have specific roles and a whole team of people in product who have different roles. And if you've still got old little Johnny in the middle who used to do it all, guess what he does? He wants to get involved in all of it, and he annoys the heck out of everybody. So, he becomes an actual barrier in the growth, and it becomes problematic. So, we do a lot of coaching with founders on that. They need to recognise this early. And there's a number of things you can do. You can either talk to your employees about it early on so they know that it's coming, where they're either going to have to find something else, which is okay, they can probably keep their equity, and they can go off to another start-up. That's quite common. More so overseas than it is here, but it's becoming more common here. Or there are other ways of doing that. And I think that probably the greatest version of this I saw was Fred from Finder. He had grown Finder to a certain point. He just felt completely lost, and there was a documentary about it. So, what did he do? He went over to the States and launched Finder over there. He knew he was good at that beginning part. So, what he did, he took himself out of the environment and put himself into a totally new one where it was all chaos again. And you can do that with employees. You can offer them, we're going to start a new product line. We're going to go into a new region. We're going to go off and do a little, there's opportunities. But more often than not, you have to let them go into a different business. You let them leave and then start to hire those people who love structure and love process, because that's the only way you're going to get to that next goal. It's one of the most difficult times. Founders find it incredibly difficult. We all mess it up. I've messed it up countless times. It's very, very hard. There's a very good book on it that I can talk about later, there is a lady who consulted to these people, and it talks about all these different versions. So, it's a really interesting read. But I think, essentially, the business has to become more, I call it professionalizing a business, I think that's the term most people will use. And the people have to change. And, hopefully, some will stay, and some will make that journey with the founder, and some won't. It's an awful time. It really is. It should be an exciting time. But as a founder, you get very attached to everything, particularly your early employees. Have you seen companies which have been able to retain at least most of their culture as they go through that kind of a transition? Because that's one of the things that I've experienced and know other people who have experienced that as the company grows, people don't feel like they work for the same company. I mean, they work for the same company, but it's not what they signed up for. No. Not really. I mean, if I look at two of the greatest examples in Australia of success, which are Canva and Atlassian, right, those organisations, they are not like working for them at the beginning. They can't possibly be. They have not retained the culture, but they have created a new culture that is just as good, if not better, but in a different manner to different people. So, just because your culture changes doesn't mean it has to be a negative thing. And I think that's probably most people assume that when, oh, it's not like it used to be, it's worse. It's not worse. It's just different. And often, it's better. And I think that you have that shift of people, and Canva's culture is arguably one of the best in Australia, as is the Atlassian's. But if you talk to people who were there in the early years, they wouldn't like it there now, and they didn't, and that's why they left. Because they sold out, they turned into a corp. That's not true. The company grew beyond them, and the cultures remain strong, and the cultures remain great, and the cultures are still some of the best out there. So, I think the misconception about a cultural change is that it's negative. It's not negative. It's just different. It just doesn't suit everybody. So, I think that's really clear. I mean, I think both those companies have incredible cultures, but they are nothing like they were five years ago. There's always an element. There's an element of things people will have. Like any company, there will be things that, you know, people keep some traditions, but they're limited in what you can do there. And it's good to keep some if they can. I think Canva kept quite a few, which is impressive, but it's a hard thing to do. Yeah. So, I guess it's kind of acknowledging that there's going to be a changing culture, but it's whether that new culture can still be a good one. Yeah. And I think what both of those organisations did, particularly Canva, was that they were very clear and were communicating this all the way along. It didn't just sort of happen without anyone talking about it, which is like any relationship. Right? You know, whether it be a boyfriend, girlfriend, whether it be sibling, whether it be marriage, whether it be work boss, relationships can change, but no one wants to talk about it. You know, it's the elephant in the room. And that's a really bad way, and I'm pretty bad at communicating in relationships, so I know all about this, but if companies can communicate through that and avoid that elephant in the room moment, then they usually are very, very well positioned to maintain a really, really healthy culture, if not, make it better. Yeah. And it's got to be genuine communication, because frankly, and if people see this slick marketing speech when it comes to the CEO presentation, people are going to see through it. No problem. Yeah. That happens when the private equity firms come in. Then, it all changes. And then, you get all the things, everyone goes, 'Yeah.' Nothing's going to change, they say. I don't know why they say that, but they always say that. Picking up on a couple of things you mentioned earlier, job security, which actually really surprised me how there might be more job security in a start-up versus a large company, but also what you were saying about taking responsibility for your career much more, not necessarily expecting that senior person to take you by the hand and lead you through. So, when someone's coming to you and, you know, maybe they don't have experience of working in a start-up environment, but they're interested, how do you advise them to take responsibility for their own career? What can that look like? Look. I think when you're interviewing someone, there's two typical types, if we go into sort of HR talk, there's two typical types of interviews that are structured. One is behavioural questions, and one is situational questions. So, behavioural questions are based on the past. What have you done here? What did you do there? How did you do that? How did you make that grow? What did you do when this person left? Those kinds of things. And they're historical. I think when you're interviewing people for start-ups, situational questions are far more relevant, where you throw a situation to them and ask them what they would do. And I think there's questions that you can throw out to see how someone is going to react in a situation. I'm trying to think of a really good example. I'll give you a great example, actually. And this is from many, many moons ago. And I won't name the companies, but I was employed to, there was a merge of two quite large companies. Right? And this is the best I've ever seen situational questions being used. And it was created by Gallup for these two companies. And they were merging, there were two people for every role. And what they didn't want is they didn't want the manager who was going to choose which person was in that role to choose the person that came from the company they were in and not the one they didn't. Right? So, interesting to know. So, what they did was they said, 'Right, Steve, can you go and sit in on all the interviews?' I did 400 interviews. It lasted seven months, travelled all over Australia. But the questions that they would ask in their normal interview, and then they had all these questions that I was supposed to ask, and it was really interesting to see how people's brains work. So, it was the questions like, how close should people be at work? That's a pretty ambiguous question. Right? And it wasn't so much the answer. It was just how they interpreted that question. Some people would literally give a measurement, two and a half meters. Some people would say, 'Well, I don't think you should have relationships.' You were actually looking at how they viewed situations. And there was another one that I think was really poignant, which was, you arrive late to work, everybody else is working, you've been at a meeting. What do you do? Now some people would freak out. 'I would never be, like, for work!' They go into this panic. Right? Other people would be, 'Well, if there was someone there that I could tell about the meeting, I'd probably go and tell them like that.' Others would say, 'I just go to my desk.' It was the way that they perceived certain situations, and you can do the same with start-ups. You know, you can say, 'You've been working in the start-up for X amount of time. Your colleague's just been promoted. You know, you've been doing the same job. You've been coming up with the same ideas, but this has happened. How would you behave in that scenario?' And then, from that, you can coach them off the back of that. Does that make sense? Yeah. Can you give an example of, you know, say that you were coaching or advising that person in that situation, how might you approach that? Look, if someone gave an answer that was clearly not going to be suited to a start-up, for example, they would go, 'Well, I would immediately see my superior, and I would probably go and have a conversation with HR.' See you later. You're not going to work in a start-up. Just, you're in the wrong league. Right? So, you just tell them, and you explain to them why. And some people rebuff that, and you may have a conversation. But usually, if they give an answer like that in an interview for a start-up, it's not so much their reaction, it means they haven't thought about the fact that there isn't an HR, and there isn't a process. And so, they haven't thought about it, they're definitely not ready. Now some people will give you an answer, they'll say, 'Well, normally, I would do this, but I obviously understand in start-ups, they wouldn't have that. I don't really know. I guess I'd speak to the founder. Is that what I do?' They'd almost start a conversation with you, and then you can start to talk to them about how that scenario might pan out in a start-up. So, really the answer defines how the coaching would go. That doesn't even mean you're going to put them forward for the role, but it prepares you to be able to help them. Once they're into a company, or they're getting close to an offer, you would have had, or I would have had many conversations about where they are as an early-stage starter. One of the things we have often done is take videos of founders talking about what it's like to work at their start-ups. They get a lot from listening to that, and you ask them what they think about that. And, again, their answers will give you an idea of how you can maybe, not necessarily correct them, but give them an idea about how that might work out in a company of this size and how that might change as it grows. So, let's finish with someone who has worked in corporate. They've never worked in a start-up before. And they kind of like the sound of it. They've listened to this conversation, they're thinking, this sounds like something, this is something that could interest me. And so they go, 'Steve, I'm thinking that I might want to work for a start-up.' What's the one piece of advice that you would give them above all else? It's funny, I get about 20 of those emails or LinkedIn messages every day. Sometimes a lot more, actually. There isn't a singular piece of advice. It would have to be a question. The first question I would ask them is, what do you know about start-ups? Do you know anyone that works at them? Based off of that, I would usually tell them to go and do some research. The first thing I would say is, look, do you have any friends who work for start-ups? No. Okay. Why do you want to work for a start-up? Go and do some reading. Come back to me. Tell me what you think it's like to. So, I'll get them to go and do some research. Some of them you never hear from again. If they are looking for a start-up, you say, which one? Generally, it's not a start-up. It's like Canva. And Canva's like a billion-dollar company. It's not a start-up. So, let's talk about that. So, really the first piece of advice is you've got to do your research. Listen to this episode, obviously, because this episode has got lots of information about it. But I think, actually like you would with anything else, if you were going to go and buy a car, if you were going to go on holiday to Vietnam, you're going to go and do some reading and some research. And there are countless blogs out there, there are countless podcasts. My gosh, there's so many podcasts that talk about what it's like. Go and do that research and see what it is that appeals to you about it, and have a think about yourself, and say, 'In my current job, what do I like the most? What do I hate the most? Do I love the structure, or do I hate the structure? Do I love the fact that I feel like I have no impact, or do I hate the point that I have no impact? Do I love the steady income?' You know, all those questions. Ask yourself those questions and see if you can work out where you feel you should fit, and then come back and tell me why. That's kind of what I normally do. Because I can't have that conversation for too long with everyone. It would be my whole day. So, I usually push them off to try and go and get them to do research. And the ones that do come back are often, you know, there's a good amount, but most, probably eight out of 10, I never hear from again. Awesome. I think you were going to mention a book. I'd love to know what that is so I can put it in the show notes. There's two books I want to mention. One is called Start-up to Scale-Up, which I think is possibly one of the greatest books to read to understand the journey of going through a start-up to a scale-up. And it talks about this lady who was in Silicon Valley, I think she was, she was over in the US, and she advised a whole bunch of different founders who went through that journey of start-up to scale-up and how hard it is. And she goes into quite a lot of detail, but it's lots of short stories. So, it's very difficult to say this is how it is, because everyone's so different. This gives you probably 30 or 40 different examples. So, you get a real feel for, one, the different founder personalities that are out there, and two, the way they approach this journey of going from complete unstructured chaos to structured scaling business. So, that, I think, is probably one of the greatest books. Another book I just think everybody should read, I've just finished reading it, it's by Dr Benjamin Hardy, who I just think is an incredible man, if anyone has not looked at him, look at him on YouTube, look at him anywhere, but he's got this book called The Gap and the Gain. And the Gap and the Gain talks about how you view yourself and your future self. And I won't go into too much. It's all psychology. It's one of the most interesting psychological books I've read, but also one of the simplest. Anyone can understand it. And it's just fascinating. I would listen to it because he actually reads it on Audible. I prefer listening to books when the authors read them. I don't like it when they don't. And you get a lot of extra sneaky material. But The Gap and the Gain will probably change your view of everything you want to achieve in your life, but it's particularly relevant to the start-up world. And if someone wants to find you or find your company, where would you like to send them? I'm everywhere. Go on to LinkedIn. I'm everywhere. We produce a lot of content. Look, I think now we've just about got, although we're in the middle of redoing it, obviously, LinkedIn, you can find me on LinkedIn, Steve Grace, but thenudgegroup.com is probably the best website. So, thenudgegroup.com, And all the different things we do are on that page in places. And I think you can also even book an appointment with me on there. Fantastic. Well, Steve, thanks so much for coming on and sharing your expertise. My absolute pleasure. All right. Hope you enjoyed the interview with Steve Grace of The Nudge Group. The thing that most surprised me in this interview was when Steve said that working for a start-up is not particularly high risk, at least when it comes to redundancy. His view, his experience is that there's no greater risk of redundancy working for a start-up than there is working for a large corporate. In fact, there's a greater risk of redundancy if you work for a big company. That's definitely one of the biggest objections that I sometimes hear about whether or not to choose to work for a start-up. So, it was interesting hearing what he had to say on that subject. That said, clearly working for a start-up can come with an added level of personal responsibility. The fact that it is so changeable, the fact that depending on the stage that it's at, you can be expected to muck in and try out lots of different things, means that you have much greater control and flexibility, and so responsibility for the shape of your own career. Now arguably, you should have that responsibility for your career anyway, and if you go back to episode 187 and my interview with Louise Lapish, then we talk a lot more there about taking personal responsibility for your own career. But perhaps this is something which is amplified, and perhaps it's something where there's more opportunity if you work in a start-up environment. The show notes for this episode are at changeworklife.com/194, that's changeworklife.com/194. And as we enter the final stretch of 2024, I need your ideas for topics to cover next year. As you think about your own career over the next 12 months, what comes up for you? What do you perceive are the biggest challenges for you? Where, if we were having a sit-down and a coffee together at the end of 2025, would you like to be able to report that you were at? What might get in the way of you getting there? Let me know the challenges you're facing, and we'll see what we can do together to overcome those. And you can let me know using the contact form on my website changeworklife.com/contact, that's changeworklife.com/contact. We've got two episodes left before the end of the year and just before the holiday season starts. I've got one of my career stories for you. It's with someone who identified a need in his particular industry and built a business around that need. To hear the full story, make sure you're subscribed to the show so you never miss an episode, and I can't wait to see you in two weeks' time. Cheers. Bye.