The idea of joining a startup is exciting. But the overwhelming desire to leave something old to join something new can become a double-edged sword. Just because you are eager to get your foot in the door does not mean you shouldn’t be picky. You are a valuable asset, and it’s important to remember this during the search process.
Not all startups are created equal. In my last post I wrote that your experience is subject to greater variance at a startup than at an investment bank. If you get a job at Morgan Stanley, you can be fairly certain it will prepare you to be a banker. They’ve been running the analyst program for years: they have it down to a science. Startup experiences, on the other hand, will vary widely in their ability to prepare you for an entrepreneurial career.
You are an investor, but instead of investing money you are investing time. Just as a venture capitalist must make the most of a 30-minute meeting with an entrepreneur to assess the risk and potential return, you have to do the due diligence to ensure you make the right investment. Here are a few tips that may help you choose the right startup to join:
1. Make sure there are mentors - By mentor, I don’t mean someone who will hold your hand as you learn. What is important, though, is to find people who take an interest in your professional development. I recently read a phenomenal post on how bored people quit their jobs, and how managers can protect against it. But, it takes an observant and caring manager to detect boredom in an employee, and act to reverse it. You can increase your chances of happiness at a startup if you surround yourself with people that care about your development.
So, in a short interview, how can you see if there is a culture of mentorship? One way is to ask employees who their mentor is at the company. See if they stumble. Also try to observe if the interviewer takes an interest in your long-term goals. Do they ask questions like ”What would you like to be doing 5 years from now? 10?” or ”What do you want to learn through this job?” or “What is your motivation in wanting to work at a startup?” Do they dig deeper by asking thoughtful follow-up questions that are tailored to your answers? All of these are positive signals that the interviewer cares about your development. They don’t just see you as an interchangeable part in their startup machine.
2. Understand the stage - People throw around the word “startup” to describe everything from Twitter to a 2-person startup launching at a hackathon. So, it’s important to scrutinize exactly where a startup is in its lifecycle, and what that means for your experience. First, it affects the risk you undertake. Four main elements that de-risk a startup are: raising capital, finding product/market fit, having revenue, and being profitable (the trump card). The more elements a startup has, the lower their risk of failure, and the less risk to you. *Warning* - a lot of startups will say they have product/market fit, but few do. Form an objective opinion by doing your own research.
Second, different stages require different roles. For example, if a company has not yet achieved product/market fit, your job will be more exploratory, and there’s a greater chance your role will change dramatically as the company evolves. You could be working on two very different projects in the course of a few months. Also, the larger the company, the less likely you will be exposed to different parts of the business and be able to “wear many different hats” - and the more likely you’ll be a specialist. Neither is objectively good or bad, but it’s important to know they are different experiences.
3. Meet the founders - Recruiting is one of the main roles of the founding team. So, at a startup with fewer than 30 people, there’s really no excuse for you not to be able to meet with at least one of the founders. What should you look for? Honesty in the founding team is probably the most important thing. It’s a positive sign if the founders are open about the hurdles they still have to overcome. In the same vein, if you do receive an offer and have an equity allotment, ask what percentage your shares represent. When asked, most will tell you the percent. If they aren’t open with you about this I’d worry they aren’t being open about other things too.
Also look at whether the founders are inspiring. Great startups require great people, and if they can’t inspire you, they likely won’t be able to inspire other prospective employees or investors. This is also a good time to ask “high level” questions. See if there is “vision alignment,” or an alignment between your vision for the company and founder’s. Be sure to distinguish between where you see it going and where they see it. You may be surprised to find that you and the founders see very different paths for the company. Interestingly, this is a mistake some investors make - investing in their vision for the company, not the founder’s - only to regret it later.
4. Analyze the operating history - Ask the hard questions, most important among them ”Has anyone left the company?” If the answer to that question is no, that is a positive signal. If yes, try to find out why the person left. The answers you receive likely will be telling. If employees left to join other startups, that’s a negative signal. If they left to start their own company, that’s a pretty neutral signal, and potentially a positive one. Employees who left to pursue something completely unrelated (a Physics PhD, for example) is also pretty neutral. And, of course, If an employee left to work at a bank, run. I’ve never seen that happen, so something weird is going on there :)
Also, it may be interesting to ask the founders how they funded the business prior to raising capital. It will give you a sense of how good the founders are at managing cash. This is a requirement of good CEO’s (one main reason startups fail is because they run out of money). So if the CEO tells you they worked odd jobs for a year just to keep the company running, all while growing the business, this is a sign that they are good at managing cash. Also ask what their current runway is - it may surprise you to hear a founder tell you they only have 6 months of cash left in the bank.
5. Spend significant time in the office - Startups will often ask potential employees to undertake a project before hiring them. This is a great opportunity to ask if you can complete the project working out of their offices for a day or two. If you get that opportunity, be observant of the day-to-day culture of the company and see if it matches what you want.
Some people like quiet working environments. Others like loud. Some love to discuss the latest technology trends as well as new product releases or partnership announcements of other startups. Others are less interested in the larger tech landscape outside of their market. A nice signal that the former environment exists is if people at the company tweet or maintain a blog. These are little signs that employees have unique ideas, and more importantly, that they are eager to share them and *get feedback*. If this isn’t the case, it’s not necessarily a bad thing - it’s just different. And it may not predict success, but could predict if you’ll enjoy the work environment. You’ll see a lot of the details you may otherwise overlook by spending a full day or two in the office.
6. Ask the happiness question - Be upfront and ask employees direct questions such as “So, you love working here?” or “What’s your favorite part of the job?” It’s hard to describe in words how an unhappy employee will answer these questions, but when you see it, you just know. If unhappy, they’ll likely give short, terse answers like “Things are good - I like what I’m doing” and offer other formulaic responses. Kind of like when you ask a friend how they feel about someone they’ve been dating for a couple months, only to receive the lukewarm, “Yea, things are pretty solid, they’re a very nice person.” Most people who love their jobs and the product they are working on will seemingly talk about it for hours if you let them. Pay attention to the nuances in how employees at different companies answer this question.
7. Find a problem you are passionate about solving - In your interview ask, “What are some interesting problems you are trying to solve right now?” Use this time to be visibly inquisitive about the problem, so you understand all aspects of it. After you leave the interview and have had a chance to unwind, does your mind wander back to these problems and consider potential solutions? If so, congrats - you’ve found a problem you are interested in solving, one that you’ll likely be passionate about.
Solving problems is a combination of both active and passive thinking. I see active thinking as problem solving that is done at work where you are consciously trying to solve the problem. Passive thinking is what you do on your walk home, or when taking a shower, and often the biggest breakthroughs come from these times. If you work on a problem you are truly interested in, you’ll maximize your passive thinking time as your mind keeps wandering back to the problem, and increase your chances of coming up with creative solutions.
Final Thought - Everyone I’ve met who wants to join the startup world is incredibly eager to do so. This is a great thing. The startup community has marketed itself well - and I think has a great product to offer! But during the search process it’s important to pause, take a step back, and make sure you are joining the right company. Because joining the wrong company will likely result in a worse outcome than pausing until you find the right match.