In last week’s blog post we presented and unveiled two of the biggest myths about blockchain. Our blog post was focused on building up confidence in the technology’s future by providing comprehensive market data regarding the rapidly growing appetite for the technology by corporations of all sizes. We also highlighted blockchain’s independence from the future development of cryptocurrencies.

Today’s post raises the question about the level of job security in the blockchain industry and provides an assessment of three main factors, which could influence your decision prior to applying for or accepting a job in blockchain.

Before we dive deep into the analysis of the different types of companies in the blockchain space, their size, funding type and profitability, we would like to find the answer of the following question.

What is the definition of “Job Security”?

We’ve recognised the following key drivers of job security:

• Satisfaction with the terms in one’s employment contract;

• Expected long term company stability; and

• A good short to medium term job/career perspective.

For the sake of this blog post, we are not going to discuss structural changes in the economy that are outside of our control, as such risks apply to all industries.

Now we can move on to the next important question.

How stable and secure is a job in a blockchain company?

If you are reading this blog post, then we assume that you are considering changing industries and joining the innovative and exciting world of blockchain. Who wouldn’t want to be part of the next big thing after the internet? But what are the risks involved; and most importantly, how can you find the type of company that will best suit your risk appetite?

In our opinion, challenging jobs that give your life purpose are unfortunately not the ones that offer the highest security. As human beings, we inevitably include security in our evaluation of any potential change in life, and even more so when it comes to moving into a brand new and innovative industry, as is the case with blockchain - an industry that has had only a few business applications in real life and is yet to prove its benefits to the world.

One thing is certain though, the interest in blockchain increases daily and the interested parties span from established and legacy corporations to a large variety of startups. This can only be a sign that what we have seen as blockchain application by now, is only going to be the beginning of a technological revolution.

So, how can you find the best company for your next career move? We have recognised the company funding, development stage and profitability as the most important factors you should consider before you start a job in blockchain.

The first factor that impacts your job stability is how well the company is funded.

We differentiate among the following options:

• Companies funded with seed capital or a business angel

• Companies funded through an Initial Coin Offering (ICO)

• Companies funded by a venture capital fund

• Privately funded companies

• Public companies

Below, we’ve summarized the the risk profile of companies funded with each of the above presented options:

Companies funded with seed investment

Such companies have typically achieved a first funding round that includes a few hundred thousand dollars. The risk with such companies is that they have only secured their short term financial stability and may not be able to obtain a second funding round. This increases immensely the risk of closing operations after the end of the capital resources. If you are very interested in the product or service a potential employer develops, you can use this opportunity to collect valuable experience. If you are looking for a position with two to four years of stability, we advise you to search for companies with Series B or C financing. Also, to make an informed decision, consider the size of the obtained funding.

Companies funded through an ICO

Companies, which have raised funding through an initial coin offering are often exciting and could grow much faster than VC funded companies. However, the future of each ICO funded company is highly dependent on the price of Ethereum (ETH). The reason is that most ICOs are initially funded with ETH and the price of their new alternative coins is pegged to ETH’s value per unit. Therefore, a big drop or spike in ETH’s price can have a significant impact on the funding size of an ICO company. Given the current fluctuation of cryptocurrency prices, we would rather rate ICO funded companies as risky employers, when it comes to job security. However, the exciting work could be a good fit for risk-friendlier job candidates, passionate for the respective product or service. Discover blockchain jobs from ICO funded companies.

Companies funded by a Venture Capital Fund

Venture Capital funding generally provides more security than ICO raised financing. Depending on the round of funding reached, VC financed startups have lower chances of going bankrupt in the short run and could be a good fit for people excited to work in the blockchain industry, but aiming to have more stability. Browse blockchain jobs from VC-funded companies.

Privately funded companies

These companies rarely their funding size. In this case you have the option of requesting funding information from the company founders prior to accepting a job offer. For the sake of this discussion, unless the company has been in existence for a few years or is already generating major revenues, consider private companies to be similar to early-stage startups with seed financing. Browse blockchain jobs from privately funded companies.

Public companies

These are generally considered the most stable employers when it comes to job security. A potential risk is that the public company’s investors could put pressure to decrease company spending and thus reduce the number of employees. This risk is, however, considered fairly low when compared to the risks of a new VC funded company, an ICO company, or a private company, which might need to go through fundraising to survive. If you are very risk-averse, but want to work in blockchain, we believe that a public company could be the best fit for you. Browse blockchain jobs from public companies now.

Using the above overview and depending on your interest in the specific blockchain product the potential employer offers, as well as your risk appetite, you can carefully decide if a specific company will be able to provide the desired level of motivation and security.

The second factor that impacts your job stability is the company stage.

Next to the company funding, we find that another important factor to consider is the development stage of the employer. In general, we differentiate among four stages in the lifecycle of a company:

• Early Stage Startup

• Growth-Phase Startup

• Established Market Player

• Multinational Enterprise

The risk for your job security is getting lower with your potential employer moving fto the next stage of the life cycle - the older and more established a company becomes, the less likely it is that your job will be in danger. Obviously, a large company with thousands of employees and 20 years of financial history has significantly lower chances of going bankrupt than an ICO that has just raised $25 Million in ETH, or even than a VC-backed startup that has commenced operations only 2 years ago.

This poses an interesting question - does this mean say ‘no’ to young companies?

Absolutely not. It shouldn’t mean that younger companies are not a good choice of employer. To the contrary, younger companies often offer more freedom and flexibility due to the lack of established internal infrastructures and could hence offer growth opportunities in all product development stages.

Okay, but is there another way to evaluate a young company’s growth prospects? If you are excited about a position in a startup and you have already analysed its funding type, but are still not sure about its future prospects, we advise you to use the company’s hiring history and its currently published job advertisements as a good indicator of the expected company growth and stability.

Now, it is only you who could decide the perfect proportions of passion for a job and the required security prior to joining a new team. Before you make a decision, please don’t forget to consider the third factor that indicates the stability of your potential next job.

The third factor that impacts your job stability is company profitability

Profitability, which is often neglected, is an important last factor to consider before you make your decision to join a team at a young company. Here’s why.

We discussed above that when we look into the company funding, a VC funded startup is generally a more secure choice than a job at an ICO or a private company. Does it mean that VC funded startups are always the most secure career choice? No. Next to company funding we should also consider the profitability of the potential employer. A VC funded company with no revenue could hide higher short-term risks than a small private company with steady annual revenue and a significant growth rate.

We understand that the risk-friendlier job seekers would follow the ideas and would pay less attention to company profitability. This is exciting news for extremely young startups that are at the beginning of their success story and haven’t started generating revenue yet.

For the more risk-averse job applicants, there are also companies like Kraken, Coinbase, Gemini, which have shown substantial revenue growth over the past few years. Another option, of course, are large multinational consulting and technology companies like Amazon, Facebook, Cisco, American Express. All of these companies are hiring blockchain specialists to use its benefits for their organisations. Large corporations usually have more defined and cumbersome internal processes, but offer more job security due to diverse revenue streams.

Never underestimate profitability. The lack of generated revenue was one of the biggest reasons why so many companies did not survive the Internet Bubble of 2000, despite of their significant funding.

Summary

As the above analysis showed, the decision to accept a position in the blockchain space is highly dependent on your risk-aversion and passion for the offered product and/or service. We have created a framework with three steps that you can apply to each potential job opportunity and evaluate the risk for yourself.

Working for an ICO is considered risky, mostly due to potential funding issues and profitability concerns. These companies, however, often offer exciting and innovative products that can satisfy your creativity needs by offering a good short term job opportunity. A well-funded/ established VC backed company represents a more secure employer in the short/medium term, even more so, if the company has already started generating revenue. The safest opportunity to work in blockchain is to join one of the large multinational companies, currently exploring the benefits of the blockchain technology for their organisation(s).

Did you know that Crypto Careers is the only platform that allows you to sort jobs by employer funding, company size, company stage and industry? Start your job search today.

Happy Job Hunting!

Make sure to subscribe for our newsletter to be the first to get the newest updates in the blockchain career space!

Photo by Leio McLaren (@leiomclaren) on Unsplash