Getting any job in today’s market can be a relief, but when it’s a startup, it pays to ask yourself several questions. Just because something is risky doesn’t mean it’s not a good move for you, but you want to go in with your eyes open as statistically most start-ups fail. Here are seven questions it pays to ponder.
How will this experience fit in with your overall long-term career strategy? Let’s face it, you will only be working for this start-up as long as you contribute far more than your cost, and they are in a position to pay you. Most start-ups will fail, but you may also be able to derive valuable experience while working for them. As an employee at a small company, you should have plenty of opportunities to study the founders and the top people in the company as they deal with fundraising, growth challenges, monetization strategies, personnel additions, management styles, and everything that it takes to run a startup. Decisions will also be made much quicker and perhaps by the seat of the pants. I loved this aspect, but for anyone inclined to more extensive deliberation and approvals, this can be unnerving.
This is a time to be honest with yourself to see if the startup opportunity offers you the best career advancement versus working for a more established company. Perhaps you want to start your own company one day. Will this experience serve you better than a larger one with perhaps more structure and formal training? There is no one right answer and different people may come to different conclusions on this question. And don’t assume that your hiring manager will be around for long for either better or worse. Start-ups can’t have much time or patience for non-performance. Either (s)he or you may be gone if bumps are hit… regardless of your competence.
Does the startup mesh with your personality and work style? This question is particularly important if you are an experienced worker. Startups will more likely require more flexibility in every aspect from hours and schedule, to change and responsibilities. If you fancy yourself into routines and are more apt to delegate than get your hands dirty, are risk-adverse and tend to carefully and deliberately work out issues, the startup is probably not for you. If the start-up is appropriately concerned with cash burn, it won’t have the range of fringe benefits and you may have to fend for yourself. Conversely, if they offer a host a benefits, they may be burning cash too quickly and everyone had better hit their marks.
Do you understand and believe in the business model? It was only a short while ago that many dot.com companies were being fashioned with essentially no business model or way of adequately monetizing their offering. While that absurdity has lessened, there are many companies that have not adequately researched their markets or constructed their business models. If you don’t completely understand and believe in the business model and the opportunity, you will be better served passing on the opportunity.
First, you had better thoroughly understand your product/service offering. If not, you’ll flounder. What is its strategic advantage? Would you use or recommend the product or service? If your answer is that you’re not absolutely sold and understand your offering, move on. Do you believe in it and understand its appeal?
What is the company’s source of funding and how long will it last? How many months of funding does the company have? The leadership could unfortunately be more consumed with looking for capital than leading and managing the company so that growth is haphazard or poorly executed. The company may have a great product, wonderful people, but simply run out of money. In either scenario you become a casualty so it pays to do homework on this issue.
Do the founders have a positive track record of experience? Just because the founders may have gray hair or appear to have lots of money is not reason enough to feel comfortable investing your sweat equity with them. Is their experience in the same industry or another one? Many founders can be very charismatic and can sell you, but that could be their only skill. Think twice before you hitch your horse with them. That said, many exciting ventures are started by first-timers. Anyway, you should know the history and background of the founders before even attending any interview so as to at least come up with a preliminary judgment or be able to do appropriate further research.
What is the growth path for both YOU and the company? One of the attractive options usually associated with a startup is that people are usually able to assume more responsibility quicker than with a larger, more established concern. Then there is the siren’s call of stock options and potential newfound wealth down the road. Sadly, by the numbers the pot at the end of the rainbow seldom materializes though we all know of people who have benefitted handsomely. Your best bet may be growing with the company over receiving that boatload of money.
Regarding company growth, does the startup have a coherent plan to grow and monetize its product? Are they properly focused on good market fits or are they just hoping to find opportunities in time? Many fledgling organizations are so married to their products that they haven’t fully realized or planned how to function when the first product is finished. They fail to monetize it or grow their customer-base, let alone put as much effort into distribution, service, training, marketing, proper administration, etc. Don’t be bashful about inquiring about the company’s monetization and growth strategy. If there isn’t one in place, and you have a hard time figuring out what it could be, then tread lightly. A company without the ability to convert into an operating mode and make money and no plan to do so isn’t a company; it’s just a black hole for investors.
Joining a startup can be an extremely rewarding proposition, but it is not without its risks and it demands greater due diligence on your part – no matter where you are in your working career.
Bob Fagan is a Performance Coach and Management Consultant. He has more than thirty-five years of accomplishment in starting, leading, and consulting with startups. He can be reached at firstname.lastname@example.org.