Are you Thinking About Joining a Startup? Some Tips to Consider
Let me start by stating the obvious: all startups companies are not created equally. There are, indeed, a lot of similarities, such as a driven passion by the Founder(s) eager to change the world, either a unique or enhanced product or service offering to the marketplace, a desire to pragmatically onboard key additional employees to expand the business, and a focus on managing working capital, with an acute focus on cash. Yet, each has its unique qualities, too.
In evaluating which startup environment best suits you, consider that most future employees initially focus on the specific role that is available and how their own set of qualifications aligns with the specific requirements, as they should. Additionally, it is good to evaluate job location and whether there is flexibility in working from home some days. Also important is to assess the person to whom you would report to discern compatibility, capabilities, background, education, and experiences. The basic question to ask is: Can I learn anything from this person?
At the same time, it helps to do an initial evaluation/due diligence on the company itself and to assess the following: what the product or service offering is; perhaps additional knowledge of the market size, competitors and potential for significant growth; and, a cursory review of the executive or leadership team to understand their philosophy, values, and direction that could influence your experience there.
For many, and especially those job seekers who are early in their careers, the decision to join a company is based solely on the criteria noted. With full and honest disclosure, you have just read my original criteria for joining many startup companies.
With the benefit of hindsight and a few rounds of raising capital from many, many venture capital firms, private equity firms, and private placement (read: deep pocket individuals with seriously complex tax returns looking to further enrich their lives and that of their families), I have a deeper sense today for what to consider.
Key Criteria for joining the right Startup
While all of the criteria identified above are still very important, with experience, comes wisdom. Now, in addition to thoroughly evaluating these criteria, I place a lot more weight on assessing the executive team.
Said differently, think like an investor! While a startup may have the next great offering to the market, Investors are, in reality, investing in the management team and their ability to execute flawlessly. There is a countless number of startup companies that had great products but the company ultimately failed due to poor management. You will note that many successful companies placed emphasis on not only the depth of the executive team but also, just how long they have been a team. As in sports, the longer an executive team has worked together, the higher the probability of success. I often use the metaphor, with a license to use the executive team as jockeys and the product or service offering as the horses. Before moving forward to join a startup, I now bet on the jockeys and not the horses!
Finally, one of the most undervalued and rarely assessed criteria is the assessment of the company’s culture. In a startup environment, the pace of issues to be addressed can be and often are pretty overwhelming and some in leadership positions have not yet managed to bridle their stress levels. Too often, employees bear the brunt of this stress. I became aware of how important company culture is when I joined a startup company where we were attempting to hire an extremely talented person to lead our marketing department. When all usual methods and attempts to bring this person on board had failed, I decided, out of pure curiosity, why he had refused to accept our offer. His response was simply, the company culture did not comport with his desired environment.
For me, this was an “aha” moment! I had never considered evaluating a company’s culture to determine whether I could be successful in that kind of environment.
And, he was right! The executive team in this startup was the male version of Mean Girls. When employees voluntarily resigned, the CEO would state, in our executive team meeting, that he was going to fire that person anyway. It was a line he used for everyone who resigned.
That disturbed me for several days until one day I sensed that I had had enough! After yet another employee resignation, followed by our subsequent executive team meeting, I firmly and unequivocally announced, that we, as the executive team, must allow employees to leave our company with their dignity. They have made valuable contributions to our firm and we thank them for their contributions to our ongoing success!
Then, as they say, CRICKETS!
I left the company shortly thereafter and the CEO, who had a very close and personal relationship with our Chairman and lead VC Investor, was summarily fired.
A company culture assessment is an important criterion for assessing whether to join a company of any size. It is especially important at an early stage when the culture is still being shaped.
Rodney Smith co-leads the Start-ups, Rapid Growth Companies, and pre-IPO Practice Group and brings to his early-stage company clients an extensive background in the technology industry, with notable manufacturing companies such as Hewlett-Packard, Zilog, and Sun Microsystems, as well as work with software, media, and SaaS start-up firms from global locations. Rodney has led a team of senior executives in changing a multi-billion dollar software firm from a perpetual licensing software company to a combination of perpetual and SaaS deployment and financing firms.