Joining any startup, regardless of what stage you’re in can be stressful. So in this article, I’m going to share with you seven questions that can help give you some clarity as to whether or not the opportunity that you have in mind is actually a good fit for you in meeting your needs.
By the end of this article, you’re going to know the exact questions you can ask, either a recruiter or the founder you’re working in finalizing your offer to join that startup.
Question #1: What is your runway
The first question you’re going to ask when it comes to deciding whether or not to join a startup is just simply asking, what is your runway? The reason why you need to ask this question is because if you’re in a smaller stage startup, this is an incredibly important question.
If the startup doesn’t even know what their runway is, you should run for the hills because that means that they don’t have a clear understanding of their cash flow, as well as how long of a runway they have before they run out of money. So the reason why you asked this question is because it gives you clarity as to how financially conscious the company is, as well as how financially secure it is in terms of actually meeting the payroll needs of everybody that’s on the team.
I’ve heard horror stories from friends before who worked at other startups, where the runway was not really clear and not surprisingly when things actually got rough. What ended up happening is those companies went through multiple rounds of lay offs before things stabilized. So you want to make sure that you know, at least a broad understanding of what the runway is.
Good answers to those question are at least several years of runway, at least 12 months of runway. Anything that’s comfortable for yourself in terms of your general timeline, when it comes to finding a new gig.
Question #2: what is this organization’s growth rate looked like over the last few years?
Once you get this first question out of the way, the next question that I would ask is what is this organization’s growth rate looked like over the last few years? The reason why you want to understand how this company is growing over the last few years is because sometimes founders will sugar coat things and say that things are going really well because they had a breakout year, which is why they’re hiring for this role.
But what you want to actually understand is whether or not this is a multi-year trend that has established. The reason why you want to figure this out is because if, for example, you’ve had a really big year in the last year where you doubled, but maybe the year before revenue cut in half, well, then that double is not actually that impressive.
So by asking this question, you’re going to have a better understanding of whether or not this startup is actually in a growth phase for their business. And that things are as rosy as they seem. You want to make sure that you ask for the multi-year time horizon. Because a lot of times people get shortsighted, even when they’re building their own businesses, that they only really want to talk about the most recent year but really you want to see how the business has been progressing over a long period of time.
Question #3: What are the goals in the next year as well as in the next three years?
The third question I’d ask is what are the goals for this startup in the next year, as well as in the next three years? The reason why you want to ask this question is because it gives you an understanding of where you might fit into the picture for whatever role that you’re applying for. Not only in the short-term, but also in the next few years as well.
If for example, they are hiring for a marketing role, and they’re telling you about how they want to do X, Y, Z in the next 12 months, but they don’t have a clear understanding of where marketing might go in terms of scaling up that department three years from now well then it’s probably likely to, if things don’t go all that well, your department could be cut first. And this is often what I see is that if the founder or whoever is interviewing you doesn’t have a clear understanding of the role of that department and the overall organization, it will likely be the first one on the cutting block when things go south.
So you asked this question to get a more clear understanding of where this role fits into the bigger scheme of things, as well as how this company thinks about multi-year goals and what they’re working towards in the future. You can even extend this out to the next five years, but to be realistic, most startups don’t have anything past the next three years planned out. So don’t count on having a really concrete answer if you were to extend this to five years.
Question #4: How has this company performed to pass goals that you guys have set
The reason why you want to answer this question is because it gives you a better understanding of how good the company is at anticipating where it’s actually going to be a year from now or a few years from now.
If, for example, they tell you that they set a goal that they didn’t hit several years in a row, well, then it probably means that some of the things that they may have told you in answering the earlier questions should be taken with a grain of salt. So by asking this question, we have a better understanding of how they choose to set their goals.
Some startups are going to choose really conservative goals where their goal is to actually just exceed their baseline measurement. Other startups are going to set really ambitious stretch goals in which actually, if you were to just hit 70% of the goal, that that company would feel like you had a successful year. The company I’m part of right now works off of this sort of model, but by understanding the perspective and the mindset of this startup in terms of how it sets goals and how they’ve performed to those goals, you’ll get a better understanding of the overall culture of the startup when it comes to the idea of excellence in startup culture, as well as whether or not it vibes with your personal values.
Question #5: Ask whether or not you can connect with a few of folks who would become your peers
The reason why you want to ask this question is because in the case where they don’t say yes to this request, well, and there’s something probably wrong internally in this culture, but on the flip side of that, If they say yes, in which in most cases they will, it’s a great way for you to gauge whether or not you’re going to actually feel like you can get along with your future potential colleagues.
If you don’t feel like you can really get along with these folks, well, then you might want to reconsider this particular role, comparing it to other potential opportunities that you might have. The reason why this is also helpful is because it gives you an opportunity for another perspective beyond the founder or the recruiter that you’re talking to.
I’ll tell you firsthand as a former founder as well, that I’ve made really good sales pitches to potential candidates before. That being said, though, I’ve always wanted to make sure that candidates have the opportunity to talk to their potential peers. By doing this, I make sure that there’s a culture fit and another perspective from my end, in terms of making sure this person would be a good fit into our company, but also on the flip side of things, it makes it so that you can have a sounding board in terms of asking the hard hitting questions that you might not feel comfortable asking the recruiter or the founder that you’re working with.
It’s one thing to hear from the founder of a company that work-life balance is great. And it’s another thing to hear from a few other peers that are actually in the day to day to say how they only work 40 hours a week to actually believe the statement of what the founder has said.
Question #6: Are there any intentions to raise money in the next year or the next few years?
The sixth question that I asked is, are there any intentions to raise money in the next year or the next few years? The reason why you want to ask this question is because it can give you a better understanding of what exactly this organization is working towards some stuff. We’ll take the venture capital route. And when they do that, it means that there will often be raised expectations from outside investors who have come into the business.
And so as a result that might lead to certain pressures that you may or may not want to be a part of, but if you don’t have a clear understanding of what it looks like in terms of what the aspirations of this startup are, well, then you won’t have a better understanding of exactly how the goals throughout the year, if you were to actually join this startup might look like.
A lot of times, if you join a startup that has just raised a big series, A, B, C, or D round, you’re going to find that there are renewed expectations for that company. And that’s because investors have funneled millions of dollars into this business and they’re expecting some form of growth.
And so what that might mean is that certain priorities are changing, which means you have to understand whether or not those change priorities align well with the role that you are potentially considering. On the flip side of things, if you’re talking to a startup that is completely bootstrapped or has limited funding, well, that will also change the way that that startup approach is building.
In that situation, that startup is probably going to be a little bit more conservative, but what that allows the startup to do as well is because they don’t have the outside expectations of additional investors, they’re able to play potentially longer-term games on certain strategies which gives you even more runway in terms of working towards whatever it is that you might be building.
So by asking this sort of question and what are the goals and the intentions, as well as whether or not there’s any intentions to raise capital, we get a clear understanding of how things might change when we actually get into the role itself. I’ve had friends in the past who have joined Starbucks before raises and they didn’t ask this question, and so it became really problematic later on because in their first 12 months on the job, the company actually raised a big round. And as a result, it’s changes happened in the company that they didn’t necessarily agree with, and if they’d known that this would have happened beforehand, well, then they would have factored that into their decision to take the particular job.
Question #7: What are three words that you would use to describe this startups culture?
The reason why this question is great is because it’s forces people to take a step back and just reflect on what they think embody some of the core values of the culture of this organization. And what you should be looking for is whether or not there are trends between the different folks of the organization and what they’re saying or using in their words.
If you’re seeing a lot of similarities in terms of things like we work really hard, but we like to have fun as well, or we are intellectually curious or we approach iterating really quickly and we use agile approaches. These are sorts of keywords or triggers that you can think about when deciding between different opportunities that you might have. If on the other hand, you see complete differences in how people are describing the culture, well, then that’s probably a signal for you that maybe the culture isn’t as strong as what’s being pitched to you.
So by asking this sort of question, you give folks an opportunity to reflect on their experiences with this particular organization. And also take that into your own evaluation criteria of whether or not you’re going to join this company.
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