Joining a startup can be a remarkably rewarding career experience, but it is also a very risky job move because a lot of startups wind up failing. The SBA (Small Business Administration) business failure statistics report that 50% of all new businesses will fail in their first 5 years.
The best way to avoid joining the wrong startup is to ask the correct questions during your interview to figure out whether it is a good match for you and a winning firm.
In the majority of my experience with startups, I have been either the entrepreneur or a consultant to the founders. Therefore, I have been around the hiring and recruiting departments.
It continues to amaze me how often people don’t ask these essential questions before joining a new startup company.
Usually, job candidates remember to ask about the job fundamentals (compensation, benefits, vesting, roles and job responsibilities. However, they miss these critical questions which are of greater importance when considering accepting a job offer from a startup.
The reasons candidates do not ask these vital questions is because they either are unaware of these aspects of new businesses or are unsure if it is appropriate to ask.
I strongly recommend that you ask these tough questions to learn about the company’s health and long-term success potential before saying yes to their job offer.
Here are the things that I feel all individuals seeking to join a startup ought to know about the startup before joining — and are not asking.
I’m going to keep away from the typical questions that many people already know to ask and concentrate instead on the matters that often go unasked.
Note: I am not suggesting that you ask these questions “point blank.” I am trying just to highlight the areas which need to be covered in your interviews and conversation with your potential new employer.
Top Questions Candidates Must Ask Before Joining A Startup
1. Will the creators stay together when the going gets tough?
I believe it’s critically important to understand the background and history of the founders. How did they meet? Have they worked together before? What brought them together with this particular opportunity?
Too many startups fail not due to market forces, but since the founders just couldn’t agree on important issues. You need to ask questions to understand how well the founders get along.
2. Can you get along with the team?
Startup teams are often a very close-knit group. There is nowhere to hide. If you do not get along with just about everybody there, life will be hard.
Most recruits will decide whether they respect the creators along with other team members (regarding expertise, accomplishments, intelligence, etc.). Don’t forget to ask yourself “Do I like these folks?”.
If you can not see working next to them for 60+ hours a week, then think twice about working at this firm.
3. What is the history of this basic idea?
What were the other business ideas tested and then rejected? I get worried if the thought being chased is too green and fresh. Often the entrepreneurs haven’t yet had a chance to think through the business model entirely in early-stage startups.
Frequently, it takes a reasonable amount of “refinement” for many people to settle-in on an idea that they will pursue seriously.
I am leery of startup teams that develop an idea in week 1 and begin “recruitment” in week two since they are so enamored of the thought and can not wait to get started. This is almost always bad news.
If I were joining a startup, I’d love to understand how the founding team came upon the idea they are pursuing today (chances are, they went through many others before getting to this one).
Do not get me wrong; there is nothing wrong with being involved in a startup when it is very young. I am just cautioning that you will need to know what the status is and be ready to have the company direction shift rather radically in those first few months. Be sure that you want to go for the wild ride.
Rarely have I come across a startup which may successfully think of one idea very early in the match and then doggedly pursue this thought (and succeed).
I would prefer seeing the willingness to consider numerous plans and select the best one.
On a related note, it will help a lot if each of the founders is chasing the same idea. You would think that this would always be true, but it is not.
4. How much money is there, where did it come from and how long will it last?
If a startup is venture capital backed, it should not be too hard to learn about the investors and the amount of money raised. Typically, this information is publicly accessible, often in an online press release, and if not, it’s not inappropriate to ask.
After all these entrepreneurs are asking you to take a risk joining their fledgling firm.
For bootstrap and self-funded startups, this line of questioning can be somewhat uncomfortable.
If you are squeamish about it, then it is possible to revert to the: “Which are the capital-raising strategies for the business? Can you expect to bring in outside investors? If so, when? These inquiries will give you a feeling for where the company stands.
One thing to consider: There isn’t any real substitute for money in the bank. Although the fact that “we have many investors who have expressed interest” is excellent, but it won’t pay the bills, nor your paycheck.
5. Which are the founders hoping to receive from the effort?
Try and move beyond the platitudes and clichés. Seriously, what do they need to get from the startup? Build a world-famous item? Make a tremendous amount of money? Have a business go public? Raise funds from top-tier VCs? Get an opportunity to work with their friends?
At a certain level, they have to have similar objectives with as each other, or there’ll probably be a fair amount of conflict.
6. What will the startup do for you?
Joining a startup is a reasonably significant risk which requires a lot of hard work. For it to be meaningful, you will need to be sure that along with bringing a lot to the startup you will be joining — it gives a lot to you.
Do you want to wear several hats? Do you want to have a reasonable amount of control and discretion? Are you expecting to work with a particular founder? Whatever you attribute value to, be sure that you have a good chance of actually getting this worth.
One-way connections in startup-land rarely actually work. You must both have the ability to gain a lot from the startup — along with contributing a ton to it.
I’m a huge fan of the growth opportunities in a startup — especially for younger people earlier in their careers. I credit my successful career and entrepreneurial spirit to my early jobs in startup firms.
Nowhere else will you receive the varied set of experiences and visibility which you could get within an early-stage startup (whether you start your own business or work in somebody else’s).
If you are not going to benefit from this (or aren’t enthusiastic about it), you are missing out on one of the highest components of value.
Overall, it appears that the degree of startup activity (especially in the key markets) is beginning to pick up.
People are starting businesses at a fairly reasonable rate and those injured directly or indirectly from the previous technology bubble have started to emerge from under their desks and research new startup opportunities.
I, for one, think it is always an excellent time to check out startup career opportunities. However, it’s essential to walk in with your eyes wide open, especially if you have never worked for a startup firm before.