Do you have the startup itch? I got my first startup itch in middle school when I made over a thousand dollars trading a popular card game called Magic Cards. Even though I never played the game, I figured out I could buy them at a bulk-discount and then sell them to my classmates.
I’ve come a long way since those days. As of late, I have helped a social app startup grow from one to 10 million active users to raise series A and co-founded my own startup backed by Alchemist Accelerator. If you have the startup itch, here are the top 10 things to consider before joining a startup.
1. Does the leader have a compelling vision?
The most important question to ask the startup co-founders is: “What’s your vision in one sentence?” A strong vision should be articulated concisely and powerfully to rally everyone towards a common goal. For example, Peter Thiel built the PayPal Mafia with this compelling vision: “creating a new digital currency to replace the U.S. dollar.”
After earning my MBA from Duke, I had some attractive job offers but was most attracted to Shots’ vision of “building the next great social network centered on positivity.” Everything we did, from engineering to marketing, was laser-focused on this vision. A year later with everyone marching towards this goal, we raised $12M in Series A.
2. What’s my motivation?
The most important question to ask yourself is, “What’s my motivation to join a startup?” There is no wrong answer here, as long as you are self-aware of why you want to join a startup. Are you in it for the money? The fast pace? The experience? The passion for a cause?
Let your motivation guide you. If your main motivation is to maximize doing and learning, consider joining an early-stage startup where your responsibilities will be broad, and you will get to wear multiple hats. If your motivation is to get rich, you’ll have a better chance by joining a later stage startup about to IPO.
For me, my main motivation for starting Birdnest is to solve a huge real estate problem that affects so many startups while enjoying this journey and living without regret. Therefore, I enjoy both the challenges and the grind, and being the co-founder of a startup fits me perfectly.
3. How are important decisions being made?
During your meeting, ask: “Can you tell me about a time when a key decision was made?” Find out if the CEO is also the CLO (Chief Listening Officer). What separates a great leader and a weak leader is his ability to listen to smarter people.
I’ve been part of a team where the best solution was obvious to everyone except the CEO who was too stubborn to hear other people’s opinions. Most critical decisions were made without input from other key employees. As a result, the startup went down a death spiral.
4. Am I excited about the product?
Ask to see a product demo. Does the product seem like it’s solving a pain? Can you see yourself using it? If you’re far from the target market, find a friend or someone who is an identifiable ideal customer. See their first reaction to the product. Do they get it? Is there a “wow” or “aha” factor?
5. Do they have customers?
Do they have any customers? Who are they? When did they become customers? How long have they been a customer? Can you talk to them? Would they recommend the product? Look for customer testimonials in case studies and reach out to them through LinkedIn or email. Ask them for a quick 10-minute phone or coffee chat.
6. What’s their key metric?
Ask the CEO or co-founder, “What’s one key metric your startup track religiously (outside of revenue)?” If they don’t have a key metric, it’s a sign they don’t have a great understanding of the value for their customers. Airbnb’s key metric is trips booked, Youtube’s is minutes watched, and Buzzfeed’s is pages viewed.
7. Who are the investors?
It’s tempting to see who the investors are, and that is important. But more important than who, check to see how much they’ve raised, when the last funding round took place, and how much time passed between the series.
If the time between two raises is only a few months, then that means they are outgrowing investors projections. If they are still in early stage, that’s okay, just make sure the founders have a strong vision and are persistent about solving the problem.
8. What’s the company culture?
Don’t ask, “What is your company culture like?” or else you’ll get a vague answer. Instead say, “Do you enjoy working here?” It’s really hard to lie about this. Look for non-verbal cues. If they look away or give you a canned answer that’s not genuine, probe deeper.
9. What’s their business model?
How is the startup making money or planning to make money? Are they a SaaS company like Salesforce that relies on the sales team to sell into large enterprises? Are they a social media company like Facebook that relies on advertisements? At the end of the day, if there is no clear path to generate $100M revenue in 10 years (rule of thumb for many VCs to judge an opportunity size), then it might not be a VC fundable business.
10. What’s your gut feeling?
Last but not least, it’s important to check in with yourself. There are times in life when all the boxes are checked, except for your gut feeling. If you are not fully excited and committed and thinking about getting other offers to compare, then this is probably not a great fit for you. Move on and keep looking for something you are absolutely excited about and can’t wait to do!
Nick Jiang is the co-founder and CEO of Birdnest, a curated, visual place for startups to find their dream office. Prior to Birdnest, Nick had grown venture-funded startup Shots to over 10M active users. Duke MBA, Princeton Engineering.
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