Picking a Startup

 

OnStartups has a good post on questions to ask before joining a startup. As I tried to decide whether to join a startup as my first job out of college, however, I thought that list was incomplete. So here are the 10 questions I asked myself as I approached this career decision:

  1. Are the founders on the same page? Many startups fail because they the founding team falls apart, so it’s a good idea to make sure they’ll stick together when the going gets tough. Find out how the founders know each other. Find out why each of them is doing this startup and see if their goals line up. Ask each of them what they’re vision is and see if they’re on the same page. Find out how they work through disagreements. Find out if they respect each other and understand how each other thinks.

  2. Are the founders willing to give everything to make the startup work? Have the founders been working on this startup full-time? How much time have they put in? What did they give up to pursue this startup? You want to make sure that in tough situations, the founders will have the determination to pull through. Startup success relies heavily on the sheer determination of the founders. If the founders aren’t putting 200% into the startup, why should you?

  3. What is the story behind the idea? How did they identify the market need? How long have they worked on this startup? Have they changed course? If so, why? Do they have a convincing story? Do they really know what they’re talking about? If they tell you they’ve been working on this idea for a year and have iterated in a dozen different ways, great. If they just came up with the idea three weeks ago and are hiring already… it’s time to walk away.

  4. Are there signals that their idea will work? Even though people are often wrong, second opinions are useful when you don’t know a whole lot about the founders or the market. Have they raised money? Do the backers have a track record of investing in successful companies?  Are the founders active members of the startup community and do people respect them? If they have a product, play with it and see if you’re impressed. Ask how much traction they have. Ask about whether their customers come back. Read reviews and comments on Hacker News.

  5. How long will their cash last them?  When I was traveling in Europe last summer, I met a Oxford professor who offered his wisdom to me. He said, “You can’t run a business without cash.” Let me repeat that, “You can’t run a business without cash.” So make sure that the company you join has cash. I don’t mean plans to raise cash. Or conversations with investors. I mean money in the bank. Don’t be afraid to ask: How much money in the bank do they have? What’s their burn rate? How much revenue do they have? If they’re unwilling to tell you at least be frank about their situation, walk away.

  6. Will you get along with the team? If you’re working 12 or even 15 hours a day, you want to make sure that you will get along with the team. Do you respect them? Do you think you’ll be able to learn a lot from them? Do you see yourself becoming close friends with them? Meet them and talk to them. If you’re not sure you would actually enjoy being stuck on an desert island with these folks, think again.

  7. Are you passionate about the idea and the job? By the same token, if you’re working 12 or even 15 hours a day, you want to make sure that you love your job. Find out about the details of your day-to- day work. Ask yourself if you failed in the end, would it still be worth it to have spent 2 or 3 years working on this idea?

  8. What will the startup do for you? In addition to making sure you will be actually useful to the startup, you should make sure that the startup does something for you. Will the startup let you wear multiple hats? Does it allow you to see they things you want to see? Will they give you control and discretion? Will they help you break into the startup community? Will you get to work with the people you want to?

  9. What do you have to lose? Do you have a family to care for? Health problems? Hobbies you don’t want to give up? How important are these things to you? Alternatively, are you disciplined enough to leave time for those other things even with a very demanding job? Like I said, startup jobs are more time-consuming and exhausting than most regular jobs. Make sure you don’t jeopardize the other things in life that are important to you.

  10. How bad can you be burned? Remember, startups fail all the time. So expect to be out of a job. How much money do you have in the bank? Are others dependent on your job security? A startup job doesn’t mean that it’ll be harder find another job. In fact startup experience is highly positive to many employers, especially at other startups. What a startup job means, though, is that you are more likely to end up spending a couple months unemployed and looking for something else to do. If this is a problem, joining a startup may not be for you.

In the end, I decided against joining a startup. But the decision may look completely different for you. Ask yourself these questions, and if you still think working a startup is the right choice for you, go for it and have a blast.