Peter Thiel is the first outside investor in Facebook, the guy who sold PayPal to eBay for billions, and a Founders Fund partner.
He told today's Ice Ideas conference audience that there is one question he asks entrepreneur looking to begin a startup.
He asks: Why will employee number 20 join your company?<p>Thiel says it's easy to figure out why someone wants to be a CEO or another very early employee in a startup; they'd like to run a company and get rich doing it.<p>He says its also easy to know why employee number 1,000 joins; the company is clearly on its way to growing into something huge, and will provide a nice, stable living.<p>Employee number 20, he says, will have to join for different reasons.<p>By then, the big equity stakes will have already been handed out.<p>Also, a company with only 19 employees won't have "made it" yet; it won't be a place someone looking for a stable income will join.
So what's the right answer?<p>According to Thiel: for the only companies worth starting – perhaps the only companies he'd invest in – the right answer is that employee number 20 will join because you are doing something nobody else has done – "something fundamentally new, fundamentally different."<p>Via: http://www.businessinsider.com/the-most-important-question-peter-thiel-asks-any-startup-looking-for-money-2011-7
The best reason for being employee #20 is the chance to grow with the organization and take on a leadership role in a company early on so you can be sitting pretty when the company is a 1000 people (assuming you are competent enough to grow with the company). Small growing companies provide more vertical mobility than a 1000 person company (unless that 1000 person company is growing the same % YoY as the small company, but this is unlikely, since the % YoY growth typically slows as a company grows.)