Naval Ravikant's Guide To Choosing Your First Job In Tech

Evaluating a startup requires a framework. Naval's is extremely simple—and effective.

Navigating your career optimized

The beginning of your career is one of the hardest parts to navigate. By default, you're at a disadvantage. You probably have little-to-no professional experience, you don't know how to evaluate which company will be best for your career, and you likely don't have much of a network to lean on.

At the same time, your first job—especially in tech—can have an outsized impact on the rest of your career.

“I'm reminded of a famous example with Facebook. Adam D'Angelo was CTO,” says AngelList Founder Naval Ravikant. “Here you have (someone in their early 20s) managing 30-year-old engineers. Some of that is accredited to Zuck for just recognizing genius and promoting him up. And some of this is, it's just like that at startups. Startups are much more merit-based, rather than seniority based.”

If you're just coming out of school, Naval guides, prioritize your career trajectory above all else and choose an environment where you can both build a strong network and rise through the ranks quickly. Evaluating whether a job offers both requires a framework, and Naval's is extremely simple—and effective.

A framework for choosing your first startup

It can be hard to know what differentiates a great startup from something less exciting. “You don't know what a rocketship really looks like,” Naval says. “You don't know who to trust or who to believe.”

Bridging this knowledge gap early on in your career requires two things: research and networking.

For research, Naval recommends finding early-stage investors and looking into which companies they've cut checks to. “In Spearhead (a program that gives founders funds to start angel investing), we now have about 25 really high-quality funded founders that have been going out and investing in very early-stage companies. That's a powerful signal because these are founders of good companies who are funded by good VCs, and they're basically identifying their own next generation. That kind of a network can be very powerful as a signal to follow.”

The idea comes with a caveat, though. When exploring where investors are deploying capital, be cognizant of the relative size of those investments. For “a VC who has a $300 million fund, investing a million dollars in a company might actually (signal) lower conviction than an angel investor who just has half a million dollars to their name putting $250,000 into a startup,” he adds. AngelList, Crunchbase, Twitter and other tools are all great ways to support your exploration, too.

But research alone will not be enough. To get actual insight and build up your own judgement, you need to consider who should make up your current—and future—professional network.

“I would argue that for someone who's early in their career—and maybe even later—that the single most important thing about a company is the alumni network you're going to build,” Naval says. “Who are you going to work with, and what are those people going to go on to do?”

So reach out to the people you want to talk to ask about their advice, about what startups interest them right now, and about any other insight they're willing to impart. Maybe don't aim for folks like “Marc Andreessen and start asking what startup you should join,” Naval admits, but “you can identify 10 or 20 people in Silicon Valley you admire. Maybe, 'Oh, this was the fifth engineer at Dropbox, and I read their blog and this person is super thoughtful.'”

The system is simple, but its potential is vast. With a bit of momentum and the right connections, you'll find more than one startup where you can launch your career. The question then becomes: Which one do you choose?

“Pick a startup that is not totally raw. You can calibrate a little bit and (make your decision) heavily based on the quality of the team and the alumni,” Naval suggests. “Those are the people who are going to form your core network in the tech industry for the next decade.”

Meaningful value comes from compound interest

If you had to sum up Naval's philosophy in one quote (or perhaps, more appropriately, one Tweet), his advice for finding your first job in tech would come down to a single concept:

“All returns in life, including in relationships, are from compound interest.”

You want to rise, early in your career, to a senior position because that position will accrue more compound interest over the 30+ years of your life than if you take your time getting there.

“Some of the most successful people that I've seen in Silicon Valley had breakouts very early in their careers,” Naval says. “They got promoted up to VP or Director or CXO or CEO, or started a company that did well, fairly early. If you're not getting promoted up through the ranks, it gets a lot harder to catch up later in life. It's good to be in a smaller company early because...there's less of an infrastructure to prevent early promotion.”

Similarly, you want a strong alumni group to begin forming at or before your first job. If you remain close, your relationship can provide compounding value for the rest of your career. As Naval says, “If you're working with the same person 20 years from now, the trust you build up with them is so great, that the things you can do with them are incredible. You can start companies with them, or you can invest in their company on a handshake, and you'll never have to worry about... (things like) whether they work hard enough.”

The secret to a successful career, Naval believes, is to optimize for this compound interest. Your first job—or your initial investment, to follow the analogy—is what sets the stage for a lifetime of high-value, compounding growth.