Questions to Ask Founders Before Joining a Startup
blog.cardash.com
blog.cardash.com
If only I had asked the employees what they thought of the founders, I would have saved myself a lot of headache, heartache, and stomach ache.
The problem is, if you asked current employees what they think of the founders during an interview, they're going to give you a party-line everything here is awesome drinking the kool-aid answer. The only way to really be privy to the honest answer is to back channel it, but hard if you don't have a large network or don't have any contacts there. I don't know the solution.
That makes no sense.
For an easy kind of counter example, suppose I have two kinds of $1 lotto tickets, A and B. Both are incredibly unlikely to pay out. Ticket type A returns about $12k one in 10k tickets, resulting in a 20% rate of return. Ticket type B returns $8k one in 10k tickets, for a negative 20% rate of return. Being able to distinguish between them doesn't make them any less of lottery tickets.
Being able to distinguish between these is great if you're an investor buying tons of tickets, but if you only buy a handful in your lifetime you probably won't win, so maybe it's good advice to treat these lotto tickets as what they are and focus on other things that matter like happiness and salary.
It's important to know what the motivations of the founder are, and what areas I can help make success happen.
The first one will also likely tell you something about the company's culture and its approach to work-life balance.
The second may give you some insight not only into what the company's current areas are where you can make an impact but also whether they're poised to fail. Not to mention whether the founder is worried about the right things (either in general as a businessperson or for their stage of growth, or given the information you've gleaned from other discussions).
This is the most important sentence in the article. The answers to the questions may or may not help you predict the success of the startup, but the willingness of the people in charge to give you the answers, will surely give you some insights into their attitude to employees, which in turn will go a long way to predicting both what it will be like to work there, and whether they will pay out on your stock options if there is a successful exit.
So why not ask only one question of founders: "Are you backed by one of the top individual venture investors?"
Depending on the structure of your comp package, the interests of the top investors are not necessarily aligned with those of a software developer.
Exactly. Assuming the common claim of "90% of startups fail" (i.e., assuming each startup is IID with 90% chance to fail), an investor that invests in 7 or more startups has a more than 50% chance of seeing at least one succeed (1 - 0.9^7 > 50%), whereas as an employee of one of those startups, you still have a 90% chance of failure.
Unlike runway and percentage ownership questions, which you are always entitled to, companies can be justifiably squirmy about providing these numbers to candidates. If so, can you get a commitment to get the numbers once you accept an offer? With that commitment in hand, can you talk in generalities about their numbers? Do they have targets? Does everyone know what they are? Do they change often? What happens when they miss?
We talk a lot on HN about cap table questions, but not so much about the nuts and bolts questions of what makes a business successful or not. I'd start with those before getting to the equity numbers, as they'll inform a lot of your negotiating position. "How much risk am I taking? How critical is my role to the performance of the company? How sensitive is the company likely to be to performance, including mine, in the next 9 months?"
I'd be really hesitant to take a job at a company that (a) should at this point be thinking in terms of revenue rather than metrics but isn't, and (b) has a number that management knows about but rank-and-file employees don't.
Really? Yes, as the article points out, SOME VCs do actually manage to correctly assess startup's potential. But that is literally their entire job - 40+ hours/week. And a breathtaking amount of VCs fail at that. What hope do you have, as a prospective employee?
Do you think the VCs limit themselves to those quick questions? No. They get full financials, projections etc. And still get it hella wrong.
The article fails to mention ALL the engineers who went to work for startups that failed, thinking that they had evaluated it correctly. I bet the failure rate here is significantly worse than for VCs, who at least can demand much more detail than can a job candidate and spend (paid, working) hours assessing those details!
Does that mean you shouldn't ask good questions? Of course not. Ask ALL the questions you can get away with. Ask the hard ones.
You should ask good questions of any prospective job, and these are particularly well suited to a startup.
You should ask a lot more than that. You want to make sure that not only is the company not completely unlikely to succeed, but ALSO a decent working culture, good people to work with etc. Gates, Zuckerberg and Kalanick revealed themselves pretty early on to be horrible people. IF you're going to work with/for someone like that, and you're saying to yourself - this will work out because I'll get hella rich and retire in a few years... well, how much worse will it be in the MORE likely outcome that the company fails AND you invested years working with someone like that?
If anything, this article reinforces my belief that equity should be treated and viewed as a bonus in the form of a lottery ticket. Get yourself paid a reasonable, if not above market salary for the risk and opportunity cost, not to mention the extra work you expect to put in at a startup.
Surely a reasonably skilled engineer has options these days. So yeah - ALSO don't go work for a startup whose product/service you don't believe in - either economically OR morally. But don't delude yourself that your belief in the product/service gives it anything like a higher chance of succeeding, even as a skilled "in the industry" person.
Remember all those engineers who believed in all those failed startups.
EquityZen is a platform that lets start-up employees sell shares before IPO: https://equityzen.com/?utm_source=hackernews&utm_medium=comm...