That's a sweeping and unqualified statement. I'm very happy as employee #1 at a very early-stage startup. I'm learning more, and faster, here than I could hope to anywhere else. And not just engineering know-how. I'm getting a de-facto business-school education. On top of it all, I'm having a lot of fun.
The risk is "maybe didn't maximize earnings over n years". The reward, regardless of the startup's success is "learned a lot, enjoyed myself a lot". That's reward I get no matter what.
EDIT: Additionally, I applied in the fashion of #3 (from the article).
Some startups will be worth it (eg: Google, Facebook), but if you average them all, the risk/reward ratio is not worth it in general. There are a lot of crap startup out there, and you only have so many years.
Also, if you are a VC or a co-founder, then the risk/rewards ratio totally changes, and it's most definitely worth it. But if you are like the rest of us, then it's a big NO.
starting prices are a form of 'anchor' - a piece of information which is known to affect subsequent decisions. As the authors note, anchoring has a powerful influence on our reasoning:
I won't be surprised that FB be under $5 when the common employees finally get's their turn to sell (after all the VCs and founders who get's to sell first).
Sounds about right -- that would put their P/E ratio somewhere around 22, which seems a hell of a lot more in touch with reality than the 111 that it's at right now (or the 200+ that the stock debuted at).
Do remember that Google has hired away pretty much all the top engineers already. You won't be able to get good people for cheap prices anymore.