10 Things To Consider Before Joining a Startup
So you’ve decided to consider joining a startup. Whether this is your first time or the most recent in a string of many, there are several things to consider, particularly when compared with an opportunity at a larger, more mature company. For purposes of this post, by startup I mean a company that is small (less than 50 people), has little or no revenue, is not profitable, may or may not have outside investors and is unproven in the marketplace. So, here are some tips for candidates considering making the plunge:
10. Calibrate your expectations. Unlike mature organizations with an HR department, formal recruiting programs and on-the-job training, your startup probably doesn’t have any of these. The recruitment process will seem jerky, but that’s probably because the people you are interviewing with just pulled an all-nighter preparing an investor pitch, writing some code or otherwise doing something that, in their ideal world, you would have been helping them with. Mature companies can afford to have people dedicated to recruiting but you won’t find that in most early stage startups so it’s best to reset your expectations now before you get disillusioned.
9. Discuss the move with your family and friends. The beauty and bane of startups is that they are an emotional roller coaster ride. One week you’ll have launched a new release, signed your biggest new account, landed some great press and then, the next week, you’re firefighting production bugs and trying to keep your customers while running out of cash. Even if that sounds like fun to you, your friends, spouse and children might call it something else. While resetting your own expectations, it’s best to discuss your thought process with those around you and use the opportunity to educate them as well. The more you do this up front, the easier it will be down the road, particularly when the company hits an inevitable rough patch. In this case, it’s better to ask for permission rather than forgiveness.
8. Get to know the team. For early stage companies, odds are there is really not much behind the curtain other than some (hopefully) smart, motivated people. Joining the company means that you will probably be spending more time with your coworkers than you will with family and friends so my advice is to get to know them. If you’re not invited to a social situation as part of the recruiting process, invite yourself. Are these the kind of people you’d like to hang out with outside of work? Do they seem to get along well with each other? Have they created a work environment that suits you? At my last company, I purposefully left the foosball table in the lobby (originally because we didn’t have any other space) in part to send a message. What messages are you seeing?
7. Do your homework. While this advice applies to all companies, I think a lot more diligence is warranted when considering joining a startup. Almost like a VC, you want to understand the market, the competition, the company history, the product, etc. Do as much diligence as you can. Ideally you want to independently find customers, former employees, competitors, partners, etc. Talk to as many as you can. I recommend using LinkedIn to help with this process. If you are persistent, you can find out a lot about the company and the market. Not only will this help with your interviews, it will help you come to an informed decision on whether to join or not should you be offered the job.
6. Expect the unexpected. In early stage companies, you’re probably going to be interviewing with people who are a level or two higher in the organization that you would in a more mature company. If you’re interviewing for a VP role, you might meet with a board member; if you’re interviewing for a developer position, you might meet with the CEO or founder. I know one founder who often used to ask candidates if they had ever been in a fist fight. Sometimes I would conduct an interview over a game of foosball. The senior folks in the company have probably gone through a lot of VC pitches and know how to dish it out as well as receive it. If you go in expecting to be pushed off balance, you’ll be better prepared. The goal of this, I guess, is to get you to drop your guard and see how you think on your feet.
5. Surprise them. The parallel to my previous point is for you to take the opportunity to test the folks you’re interviewing with. It doesn’t necessarily have to be something big or shocking. For example, when someone worked at a large organization previously, I like to ask them about how the company is organized to get a feel for their responsibilities in the position (which isn’t typically obvious from the title…I think almost everyone at Goldman is a vice president, for example). Anyway, I recall a candidate who after a couple of questions, jumped up to the white board and started diagramming the org chart for the firm. I was impressed not only with her confidence but with her ability to communicate simply and concisely. So, my advice is to surprise them.
4. Check references. I confess that I’ve never seen anyone do this, but I would be impressed if someone did. Every good company serious about hiring someone asks them for a few references. I’d recommend responding, “but of course! Would you also mind if I checked a few references on the firm as well?”
3. Be prepared to discuss compensation. Odds are that by working for a startup you will be making less in cash and other compensation than if you went to work for a more mature company. That’s partially offset by a “lottery ticket” in terms of equity options, but I’d argue that the best reason to take the hit is for psychic reward. That aside, you should familiarize yourself with vocabulary and mechanics of stock options. There are a ton of resources on the web. For senior positions in a startup, there are some really good comparables available in this study conducted by Prof. Noam Wasserman at HBS. Everyone has a different strategy on this, but mine is to be straightforward and, when asked about compensation, to respond, “here’s what I need to keep the lights on.” If you and the company do well, then you’ll certainly be making a lot more in a short period of time so haggling over a few pennies up front is really not worth it.
2. Act as if you are an investor, because you are. In light of the aforementioned hit to compensation, you will be, in fact, an investor in the company should you join. The most successful team mates I’ve had in a startup really viewed themselves and acted like they owned the whole company. Not from an ego perspective, but by continually asking, “is this the right thing I should be doing for the business?” and then acting upon that. Thinking like an owner causes you to see the forest through the trees and when strategy is changing that is critical for success. If it’s not in your DNA to do this, I’d suggest startups aren’t the right career path.
1. Build a culture you enjoy. So you’ve decided to join. What you’ll find is that in a company this small, you can have a major impact on the company culture (something not possible in a more mature company). Whatever level you join at, you can have a big impact. If you’re annoyed by meetings that start late or run on too long, probably others are (or will be) too so you can take it upon yourself to change things. This is the beauty of startups, you can do so much more than your “job.” Start a weekend ultimate frisbee group or create a company book club. All of these things will make you more successful at the company and the company more successful…not to mention more enjoyable along the ride!