I’ve worked at three startup companies over 20 years. The first did okay, the second imploded and the third was Yelp, which went public five years ago. Given Yelp’s success, I’ve sometimes been asked, “How did you know to join when you did?”
Of course, the answer is that I didn’t know. I took a flyer on Yelp just as I had on the other two startups… and it went well for the first year. So I stayed, and the next year went well. And so on.
Many people consider joining a startup during their career, and virtually all of them also have natural doubts. When asked aloud, this sounds like, “I am thinking about leaving my relatively-stable job to join Startup X. Do you think I should?”
There is no certainty, so you’re going to have to make a bet. But there are factors that can help guide your decision. To help determine your fit with any given startup, I suggest asking yourself these five questions:
1. Can you afford it financially? To answer this question honestly, you should assume the equity will be worth zero. You should also be prepared to survive a 3- to 6-month period with no salary because there is a high chance that something will go wrong, and you will not get paid for a while. If you are prepared for this possibility – with savings and/or a low cost of living – it will make the startup roller coaster far less stressful. The corollary is that if you are currently in a low-cost, low-commitment phase of life, now might be a great time to try a startup!
2. Do you believe this business can be financially successful? There are lots of ways to answer this question, and experienced investors will have an advantage here. If the company is already generating revenue and they’re willing to share those details with you, that’s a positive sign. The real question is: would you invest your own savings in this business? If the answer to this question is no, you probably don’t want to get paid with their equity!
3. Do you hit it off with the founders? You are going to be spending more time with these people than your family and friends. You are also entrusting them with this next stage of your career. Good founders can make a company succeed. Bad founders can make a company fail or compromise your ethics. Even if your direct manager will be someone else, I’ve specifically mentioned the CEO and founders here, because they tend to set the cultural norms for young companies. So if you think the most senior people are a little sketchy or just incompetent, you’d be nuts to spend every day following their direction.
4. Are you interested in their mission or product?Like the founder question, you’re going to be spending a lot of time building, selling and thinking about this product. It doesn’t have to be your favorite product ever, but can you get interested enough that you will want to read the related books and articles about your competition, meet other people in this industry and think about it during your commute?
5. Is there a natural role for you to play? The more experienced (and therefore expensive) you are, the more important this question. If, say, you’re a marketing executive focused on managing large teams, it is probably not a good idea to take an individual contributor job buying keywords and then hoping your role will expand over time. On the other hand, if the company actually needs a marketing executive and has the budget to build a real team, that sounds like a good fit. If you really care about playing shortstop, don’t join a team that already has Derek Jeter.
If you answered “no” to any two questions, that’s a red flag. I suggest you run, don’t walk, in the other direction… and perhaps consider one of the many other startups in the sea.
A “no” to one question is a still a serious yellow flag. Think hard about this question and try to resolve it before taking the next step.
If you answered an honest “yes” to all five questions, this is a promising fit you should consider seriously. This is pretty rare, and will probably not happen the first, second or even third time you interview with a startup.