Joining A Startup? Top 6 Questions You Should Ask

About This Blog

This site is for  entrepreneurs.  A full RSS feed to the articles is available.  Please subscribe so we know you're out there.  If you need more convincing, learn more about the site.

Community

Google+

And, you can find me on Google+

Connect on Twitter

Get Articles By Email

Your email:

Google

Blog Navigator

Navigate By : 
[Article Index]

Questions about startups?

If you have questions about startups, you can find me and a bunch of other startup fanatics on the free Q&A website:

Answers.OnStartups.com

Subscribe to Updates

 

30,000+ subscribers can't all be wrong.  Subscribe to the OnStartups.com RSS feed.

Follow me on LinkedIn

OnStartups

Current Articles | RSS Feed RSS Feed

Joining A Startup? Top 6 Questions You Should Ask

 


In most of my experience with startups, I’ve been either a founder or an advisor to the founding team.  As such, I’ve generally been on the hiring/recruiting side of the equation.  It continues to amaze me how often people fail to ask the really important questions before joining a startup.  They get a lot of the basics (compensation, benefits, vesting, roles/responsibilities, etc.) right – but often fail to hit some of the important topics that are peculiar to startups.  

The reasons people don’t ask the critical questions can be broadly categorized as:  “I didn’t even to think to ask that” or “I would have liked to know, but didn’t think it was appropriate to ask”.

Here are the things that I think all individuals looking to join a startup should know about the startup before joining – but are in many cases, not asking.  I’m going to stay away from the standard questions that most people already know to ask and focus instead on the questions that often go unasked.  Note:  I’m not suggesting that you ask these questions “point blank”.  I’m trying to really just surface the areas that should be covered in your discussion.

Top 6 Questions People Fail To Ask Before Joining A Startup
 
  1. Will the founders get along when the going gets tough?  I think it’s critically important to know what the background/history of the founders is.  How did they meet?  Have they worked together before?  What brought them together for this specific opportunity?  Too many startups fail not because of market forces, but because the founders simply could not agree on important issues.  You should ask questions to get to the heart of whether the founders are likely to get along.

  1. Will you get along with the team?  Startup teams are usually a very close-knit group.  There’s nowhere to hide.  If you don’t get along with just about everyone there, life is going to be hard.  Most recruits will determine whether they respect the founders and other team members (in terms of experience, accomplishments, intelligence, etc.) but just as important as all of this stuff is the simple question of:  “Do I like these people?”.  If you can’t see working along side them for 60+ hours a week for several years, think twice.

  1. What’s the history of the basic idea?  What other ideas were assessed and discarded?  I get worried if the idea being pursued is too fresh and green.  Often the founders have not yet had a chance to really think through the idea fully yet.  Often, it takes a fair amount of “refinement” for most people to really settle-in on an idea that they are going to pursue seriously.  I’m leery of startup teams that come up with an idea in week 1 and start “recruiting” in week 2 because they’re so enamored of their idea and can’t wait to get started  This is almost always bad news. If I were joining a startup, I’d like to know how the founding team arrived upon the idea they’re pursuing now (chances are, they went through several others before getting to this one).  Don’t get me wrong, there’s nothing wrong with being involved in a startup when it’s very young – I’m just cautioning that you need to know what the status is and be prepared to have the overall direction shift on you pretty dramatically in those first few months.  Rarely have I come across a startup that can successfully think of a single idea very early in the game and then doggedly pursue that idea (and succeed).  I’d prefer seeing the openness to consider multiple ideas and pick the best one.  On a related note, it helps a lot if all of the founders are pursuing the same idea.  You’d think that this would always be the case, but it’s not.  

 
  1. How much cash is there, where did it come from and how long will it last?  If a startup is venture-backed, it shouldn’t be too difficult to find out who the investors are and how much capital was raised.  In most cases, this information is publicly available (some press release was likely issued) and if not, it is not inappropriate to ask.  For bootstrap and self-funded startups, this line of questioning can be a little uncomfortable.  If you’re squeamish about it, then you can revert to the:  “What are the capital-raising plans for the company?  Do you expect to bring in outside investors?  If so, when?  This will give you a sense for where the company stands.  One thing to remember:  There is no real substitute for cash in the bank.  Though the fact that  “we have several investors that have expressed interest” is good, it will not pay the bills.  

 
  1. What are the founders looking to get from the effort?  Try and move beyond the platitudes and clichés.  Seriously, what do they really want to get from the startup?  Build a world-famous product?  Make a ton of money?  Take a company public?  Raise capital from top-tier VCs?  Get a chance to work with their friends?  There is no right answer, but the key is making sure there is some parity across the founders.  At some level, they need to have similar goals or there will likely be a fair amount of conflict.  

  1. What will the startup do for you?  Joining a startup is usually a pretty big risk and a lot of work.  In order for it to be meaningful, you need to really, really make sure that in addition to bringing a lot to the startup you’ll be joining – it needs to bring a lot to you.  Are you looking to wear multiple hats?  Do you want to have a fair amount of discretion and control?  Are you hoping to work with a specific founder?  Regardless of what you attribute value to, make sure that you have a decent chance of actually getting this value.  One-way relationships in startup-land rarely ever work.  You need to be able to draw a lot from the startup – in addition to contributing a lot to it.  I’m a big fan of the growth opportunities in a startup – particularly for younger individuals earlier in their careers.  Nowhere else will you get the diverse set of experiences and visibility that you can get in an early-stage startup (whether your own or someone else’s).  If you’re not going to be benefit from this (or are not passionate about it), you’re missing out on one of the biggest components of value.


Overall, it seems that the level of startup activity (particularly in the major markets) is really starting to pick up.  People are starting companies at a pretty good pace and those scarred directly or indirectly by the last bubble are starting to come out from under their desks and explore startup opportunities.  I, for one, think it’s always a great time to look at startup opportunities.  But, it’s important to walk in with your eyes open.  This is particularly true if you have never worked for a startup before.  Hope the above helps. 

What are your top recommendations for questions new recruits should be asking their startups?  Would love to hear them.

Posted by on Wed, Aug 02, 2006

COMMENTS

I'd have to echo the advice about getting along with the team as a whole, and not just the founders.

With the last startup that I worked with, I got along really well with the founder and most of the rest of the team. However, I really didn't get along with one of the other developers. Since startups work so close together, it is impossible to ignore such an issue like you could in a regular employment relationship. It may sound harsh to say it, but sometimes you just have to say "Either he goes or I go"- simply because if you both stay nobody will be happy (Internal conflict can kill the zeitgeist of a young company).

posted on Wednesday, August 02, 2006 at 10:25 AM by


This could not have come at a better time than the present. I am going to copy parts of this to my blog - we are looking for 3 key guys to join out team

posted on Wednesday, August 02, 2006 at 10:45 AM by Manoj Ranaweera


This subject is important.

I would ask one more question -- How serious are the founders?

Are they betting their careers on the startup? Are they working full time on the effort, or do they have day jobs? Do they worry about their customers problems from when they wake up until when they go to sleep? Are they willing to do whatever is necessary (write code, print business cards, call the cable Internet company, and so on)?

Or, are they business school students who want to work on a startup over the summer to put it on their resume? Do they want to hire developers to do all of the tech work?

(This queston is similar to #5, but a little more narrow in focus.)


Writing this has led me to an additional question -- Are the founders hackers?

posted on Wednesday, August 02, 2006 at 2:19 PM by Adam Smith, of xobni.com


I'd like to echo Adam Smith (xobni)'s comment. I've seen "start-ups" where the entrepreneur got a piece of the lat '90s .com boom by being early in a start-up and they think that doing it part-time is sufficient and working 8 weeks of the year out of the Caribbean is OK -- because they've done it before. Not a recipe for success if you ask me.

posted on Wednesday, August 02, 2006 at 7:25 PM by David Catalano


If I were to add a 7th question, it would be posed to myself... Do I really believe in the vision, product and model that this company is trying to execute? The earlier the stage of the startup the more important this question becomes. It is easy to hide at larger organization but that doesn't fly at early-stage startups.

posted on Thursday, August 03, 2006 at 2:39 AM by Andrew Fife


I justed posted my top 6 on http://manojranaweera.wordpress.com/2006/08/03/top-6-questions-people-fail-to-ask-when-joining-a-start-up/

posted on Thursday, August 03, 2006 at 5:40 PM by Manoj Ranaweera


I found myself wondering if I had cared to ask ALL of these when I joined and left a start-up within months... And the answer to Q1 was the most difficult to recall. Perhaps because I never asked the question.

I would add a 7th. If you do not know one or more of the founders, try and obtain independent view on their value system. If you work on different philosophical and ethical planes, the relationship will not work.

Tougher to do than to pontificate about - does anybody else have similar experience?

posted on Friday, August 04, 2006 at 2:54 PM by S Y


While I can understand the sentiment, joining a startup is a leap of faith. If you don't like taking leaps of faith that heavily rely on people that you don't know well, join a big company or start your own company.

When you join a startup, you are basically making a significant multi-year commitment ... based on a few hours of discussion, a few pieces of paper and (likely) with people that you don't know really well. All the questions in the world aren't going to tell you enough of what's going on. After 3 to 6 months, you'll know everything to the finest detail that you'd never be able to grok from an interview.

I've been on the receiving end of some of these probing, in-depth questions and I always tried to answer them as best as I could. But just telling the facts doesn't portray the subtle and important things (both good and bad) that seem to make all the difference. So, even when I answered these elaborate and detailed questions that people would ask, they still really didn't know enough to make an informed choice.

But ask away. I never held it against people when they asked detailed questions, even when some of the questions seemed skeptical, cynical or negative. I'd only caution you to account for natural defensiveness (true believers sometimes don't like to hear skepticism) and a lack of bulletproof logic (businesses are based on attempts and strategy, not ironclad proofs that success is inevitable).

posted on Monday, August 07, 2006 at 1:37 PM by Daniel Howard


My pertinent point was about value systems.. If they do not match - and information about these can NOT garnered from interviews but only from people who have worked with the founders in the past or otherwise known them in a professional capacity - an early exit is inevitable.

Even with good business plans, it is entirely possible for a business to go bust ESPECIALLY if the founders believe their own hype too much or as in my experience, one founder somehow manages to take all the money he could from the other, skips country and leaves the other to pick up the pieces and serve bankruptcy. Yes it is an extreme example but I use it as a guide to choosing start-up clients whom I advise and with whom i work closely without becoming an employee which requires a bigger leap of faith and a relative inability to point at an emperor not wearing any clothes.

As it happens I do run my own company.

posted on Monday, August 07, 2006 at 4:22 PM by S Y


Yes, everybody's been burned by a startup. It's tempting to think that risk could be removed by just asking a bunch of magic questions or doing research. And people always formulate the one magic question that they think would have revealed that the bum who burned them was a bum.

I think that's just being naive. Frankly, if you don't want to be burned by startups, well, don't join startups. And, if you do join a startup, don't think that you can somehow remove the risk. And, expect to be burned, at least once, maybe several times.

Let me be constructive and suggest alternate questions that a person considering a startup should ask HIMSELF.

1. Do I trust these guys? Forget everything else and ask yourself, at a gut level, if you think that these guys are worth following.

2. How bad can I get burned? For some people, losing a job is a disaster; for others, it's no big deal. Maybe some of your own money is involved. Maybe you're taking a salary cut to get more equity. Quantify what you might lose then ask yourself: Can I afford to lose?

3. Do I have anything to lose? Lots of people come up with imaginary losses: opportunity costs, they lost time, they lost a chance at a happier or more prestigious job, they lost a chance getting 4 weeks of vacation. Be realistic: if you can easily get your career back on track or your career is in the toilet or you're fresh out of school, you aren't missing anything by taking a job at a startup. If you have nothing to lose, you have nothing to lose.

4. Can I tolerate any risk at all? Many people only want to take a risk if they are guaranteed to pay off. That's a certainty, not a risk. Most veteran developers think that any risk is too much. If you are at the point in your life where you don't want or need to take risks, then just admit it. Don't waste your time, shopping around for the startup that is a good bet, because none of them are. Even VCs pick duds, most of the time.

Knowing yourself is more important than knowing the startup.

posted on Monday, August 07, 2006 at 9:08 PM by Daniel Howard


Daniel: I agree with most of your points, but not necessarily with the conclusions you are drawing.

Startups do inherently involve risk -- and it's iimportant for people to understand that.

But, much like VCs do a significant amount of due diligence before selecting which companies they invest in, people should do some amount of diligence as well. Just because most startups fail and just because it's impossible to ask all the right questions, does not mean that one should not at least learn what one can to get a better sense of things.

If it were me, I'd be unwilling to just leave all this to chance and let the cards fall where they may. I'm pretty risk tolerant, but like to mitigate risk where I can.

posted on Monday, August 07, 2006 at 9:16 PM by


I would add one more as well. If you have the access, watch how the money is spent. Are the expenditure prudent?

I was at one startup where the original funding came from the founders themselves. (they were in hock well pass the nether regions...) and had just acquired angel financing. Well when that happened you could see the change. A great deal of proclivity for spending more than they should etc. Went from close to break even to burning more red ink. I got out soon afterwards.

posted on Tuesday, August 08, 2006 at 6:49 PM by John McGinnis


Dharmesh:

I think that you aren't mitigating risk. The answers that you are getting back aren't facts; they are hopes, opinions, proclamations, personalities, the party line, self-delusions and shades of the truth. You're likely to see what you expect to see (good or bad) from these non-facts.

It's counter-intuitive. But, if your evidence is unreliable, it's best to throw it away.

posted on Tuesday, August 08, 2006 at 11:12 PM by Daniel Howard


What would you all say to one that is an advisor/member of the team and the Powers that be-are not "getting out of the way" in order for things to develop and work like they should??

posted on Thursday, August 02, 2007 at 2:44 PM by Joe


A great discussion. Some more question to ask of yourself. Are you a startup type person? Can you tolerate living with an uncertain future and an unpredictable outcome. Do you really believe in the product? Would *you* invest in the product. What do you bring to the team? Why do they need you? What are your unique skills?

posted on Saturday, December 22, 2007 at 7:00 AM by MVK


Nice post. There are many startups emerging in India now a days and people make mistakes joining the wrongs ventures. These question definitely make sense.
Thanks

posted on Saturday, May 17, 2008 at 9:50 PM by Ravi Sagar


I've been involved with a few startups, both vc-funded and bootstrapped. In my opinion, the main reasons people get into startups in the first place is either to create some new innovation and/or to get a large paycheck at some point in the near future. 
 
So I think you really need to believe in the purpose and value proposition of the company, if only to maintain your enthusiasm and ensure that you are willing to persevere through all the challenges that lie ahead. Thanks for the interesting post.

posted on Thursday, July 10, 2008 at 12:35 PM by Niraj Patel


When launching a start-up many young entrepreneurs get caught up in the "How much money are we going to make" aspect and they tend to forget that there are lots of headaches that come with starting a new business.  
 

posted on Sunday, September 07, 2008 at 8:45 AM by Hillel


I've been made an offer to join a start-up. Apart from all the above questions here's one I'd like any one of you to answer: "With the financial world going upside-down, is this a good time to join a start-up in India?"

posted on Wednesday, November 19, 2008 at 4:34 AM by N D Badrinath


Here's is a variation of the subject in question. 
I was offered to join a startup as a partner because I can add some competencies yet lacking in the company. The startup is self funded and is already 1 year in development. The idea seems solid and backed by a good business and marketing research. The two founders are capable so from all aspects it seems correct. However, I was offered to buy my place as partner which I agree as some effort was taken place prior to my invitation. But they would like me to pay my part of the company according to projected value of the company in the future, and not just effort (costs + time). I am tending not to agree to that as I don't feel like an investor. But I invest myself, full time, no salary until success or failure ensue. And I totally agree to pay my part of the global effort payed so far. But not more. I would like to hear your opinions. thanks

posted on Wednesday, June 24, 2009 at 12:26 PM by Phil


Comments have been closed for this article.