Ask HN: Signs as an Employee of a Failing Startup? | Hacker News Reader

Ask HN: Signs as an Employee of a Failing Startup?

24 pointshnjb22 comments

recently started a new job at a start up. while there seems to be a lot of domain specific knowledge, good developers, and leaders, there isn't really a ton of technical know-how so I've been having to relearn some of the lessons learned in my more corporate roles. I've been having to redo work in the last month - even after getting it reviewed and checking in on if this is how the work is supposed to be done. I try to do it to satisfy my direct manager, but they seem very disorganized and it doesn't make me feel very confident in the company. there were also laws passed that seem to be our current business model.

are these signs of a failing start up or something else?

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I am young and have only been at one startup so with a sample size of N=1 here is my "possibly in trouble startup indicator".

- Unclear go to market strategy/pivoted often (>3 times)

- Strongly established politics and structure even though the company is young (<2 years)

- Lots of work being done that does not relate to a specific product (if half the employees are working on tooling that's a bad sign)

Your description does not fit the above criteria, I would expect a startup to be somewhat disorganized and having lot of domain-specific knowledge is good. As for regulations that might lead to a pivot but it's not necessarily terrible.

Keep in mind that my answer is based on a very limited description so it's most likely entirely wrong.

Pivoting and no strategy is practically the job description for a seed stage and possibly Series A startup. The others don't sound good though.

There are lots of reasons why a startup might fail. Technical competence and disorganization are way, way down the list.

In my experience engineering at successful startups is often subpar. A successful startup engineer is above all productive, flexible, creative, and ships often. Their code gets the job done but probably wouldn't pass muster at a corporate job.

Management at startups is always flailing about. If things aren't working, then you should be taking random stabs at doing something else. If things are working, you probably have many more problems you did yesterday and you should feel under-resourced.

Your original post mentions something about laws being passed to outlaw your business model. That seems much more concerning.

But in any case, here's what I'd look for

* Is there a market for the thing we're doing?

* Is our iteration fast and are we learning from what we do?

* Do I trust the people I work with? Do they seem ethical?

Even if someone here wants to oppose the idea of an ethical business, consider that there are about 10,000 ways to get screwed over as a startup employee and you want the people in charge to resist doing those things to you.

Working at a company where middle-management is incompetent is common. Particularly in startups where they promote from within or the leaders haven't seen good management before. That being said, if you aren't getting your best work done, it's probably best to leave.

That being said, regarding whether or not your startup is failing, its hard to know (even from the inside). But one thing that is important is whether the leaders of your company think they are failing. That is easier to notice and is a shittier experience than just if your company is failing but your leaders see a way out. If your leaders think they are going to die, the easiest way to know is when the free stuff gets taken away (swag, coffees, expensed lunches). The other is if projects keep getting killed and new ones that get promoted as the answer to all the problems ... sign that they don't know what they're doing.

Wait… there are startups where projects aren’t silver bullets that never work out?!

I’ve also found that to be a reliable sign of a zombie startup - might not fail, but constant lack of success is grating too.

It's fruitless to discuss signs of a failing startup since almost all tech startups fail. They fail with good management and bad management, good product and bad product, good developers and bad developers. If there was a way to know that a startup wasn't going to fail it would almost certainly not be a startup.

If you're worried about failure then work at a more established company with a lower risk profile. If you're going to work at a startup then don't worry so much about whether it will succeed or fail, but rather whether you enjoy working there, you like your team, you like what you're learning and that you're getting compensated reasonably well. Anyone on HN that thinks they can predict whether your startup will fail based on 6 sentences you wrote about it is just blowing hot air.

Just as an example, I've been running my company for close to 15 years now and almost everything people are saying in these comments about failure could easily apply to me, and yet my company still exists and is going strong. I only promote from within the company, I never hire external management and it's a principle I strongly value. Apparently that makes my company a failure.

I always make it clear to everyone I hire before they accept that our business is risky and our company can go bankrupt tomorrow without warning. I never pretend or exert any kind of false sense of confidence and on the contrary I'd rather people understand and appreciate the risky nature of this business. Apparently that makes my company a failure.

My company pivots all the time on stuff and we are always looking for new and interesting projects to work on. We've explored crypto lending, decentralized poker, VR, prediction markets, and a social dining platform, all of which have failed but were incredibly worthwhile experiences that everyone had a good time working on and learning from. Apparently that makes my company a failure.

My company is big on tooling, from formal verification methods, to custom tooling developed for our in-house UX/UI team to prototype complex financial interfaces and data visualizations, to highly sophisticated performance monitoring and alerting tools, we even developed our own functional reactive programming language. Apparently that makes my company a failure.

With that said, maybe my company is a failure and next week I'll be the one to find out... but it's been a great 15 years for me and everyone I work with, we all get paid well, we get a chance to work on things we like with people we respect and I wouldn't have had it any other way, failure or not.

> I only promote from within the company, I never hire external management and it's a principle I strongly value.

I won’t comment on the others but this specific point is huge, and I have a lot of respect for leaders who decide to follow this path. On average it ends up being incredible for morale.

It has always been rather demotivating doing hard work at a company just to see external leaders and managers come in, take all the credit or make decisions without full context. In one instance I’ve seen it nearly destroyed the company: a director was hired who started imposing silly decisions that caused multiple people to get severely pissed off. Only after many months and several key people leaving (founding engineers with immense knowledge of the business) the executives woke up and fired this person. What a wasteful sacrifice of talent.

In my ideal company, everyone on the technical side would need to join as senior engineer, and be promoted from there. Of course relevant talent will be lost because some effective leaders will not be willing to go through the gauntlet, but it’s a fair price to pay nonetheless. I assert that a good subset of engineers who deeply know the systems of a company make for excellent leaders of that company.

I've been on the other side. My company was only promoting from within, and honestly it wasn't working. The engineering department was filled with people with IC only contributions, and no one knew how to manage or could mentor others. They knew it wasn't really working, but didn't know what to do/change.

At some point they hired someone external, and damn, he was amazing and could mentor the other managers. Sadly, he left quickly.

I don't think there can be a checklist for things to look for, same as there can't be a checklist for a startup that will succeed.

You should really base your decision on your alignment with the mission and fit with the people there. That sounds corny but is probably the best formula for success.

Especially if you're an engineer, things that seem ridiculous to you could actually end up getting the traction needed for a successful exit (source: I'm an engineer who has seen lots of things I thought were ridiculous pay off and lots of things I thought were important lead nowhere).

> I've been having to redo work in the last month - even after getting it reviewed and checking in on if this is how the work is supposed to be done.

This sounds rather annoying but I don’t think that it is a sign of a failing startup. I’m extrapolating a bit here but: Your manager and PR reviewers may understand the technical aspects of the code but may not understand the big picture “why” of it. If you’re working on something, then someone within the firm - a product/project manager, a salesperson, the CEO - must be advocating for it to be done. Seek them out and build up a direct line of communication. You aren’t usurping your manager by doing this, you’re understanding pain points better and helping to build team cohesion. (That sounds like word salad but I mean it.)

> there were also laws passed that seem to be our current business model.

This is concerning. But - then again - maybe you’re misreading the law. If you don’t have the means to bring this up comfortably in an all-hands or 1:1 context, then this is yet another reason to build relationships with other employees outside of your direct chain of command. Sales and product people should definitely be knowledgeable of this sort of thing. Find a way to bring it up in conversation on a call (“I saw this article in the paper the other day...”).

The only important sign that you should concern yourself with is… lack of money.

- Lack of investment or

- Lack of revenue

I’ve learned one thing in being a part of one unicorn and multiple failed startups: Your startup isn’t a failure until the runway runs out.

Until then, spend time with people outside of engineering especially in sales, finance and product.

Most teams like to brag about their successes so if they’re landing customers and increasing team size because of investment you’ll know.

> are these signs of a failing start up

Wrong question.

"Are these a signs of a company where I would waste my time and wouldn't learn anything substantial" or "Are these a signs of disorganized management which wouldn't help me [or even would harm my development]" are slightly better ones.

Of course you should always adjust your answers on your compensation and requirements.

The biggest sign of startup failure is lack of growth: slow sales, no new hires, no new features, etc. In general, stagnation. Development issues like redoing work, poor coding practices, etc. rarely matter unless it goes on for a long, long time.

Smaller companies are often disorganized (and is one of the reasons some folks prefer them over larger, more bureaucratic organizations), but are also more flexible and can pivot faster. If you are at a startup that won't pivot when things aren't working, that's also a big problem.

I've noticed that successful companies don't have this so-called "steady" growth everyone looks for. Early on it comes in bursts, and it's very clear because sales growth suddenly jumps up and it's hard to find that new high until it eventually does occur. It's really hard to survive. You either wildly succeed, or you never get off the ground. I've never seen it any other way.

Lifestyle or consultancy businesses are entirely different. You can be alive forever and just have good and bad years.

A failing startup will commonly not have a growth strategy which usually looks like some form of marketing, cold calling, and penetration by industry events, these are the top three entry points I've seen over the years for growing companies small and large, or have a tremendous cost of acquisition and low retention rate. You can get this from startups that share sales metrics with the wider company.

There are absolutely signs. Don't listen to people who say there aren't. You'll know. Your sales teams will know the most because they'll know all of the telltale metrics from having seen them more frequently than you.

You need more initiative working in a startup than most corporate roles, so adjusting to that might take some time.

I would be more worried if they struggled to make payroll or didn't pay bills on time, or there is cofounder trouble. Let the c suite worry about the product, best you can do is hit your marks and get used to being semi independent so you aren't a bottleneck.

The big “oh crap” moment is when a more experienced/senior employer quits, and you realize their work was much worse than anyone thought.

Another issue is when the core product itself is faulty in a way the customer will notice. That sounds obvious … but it’s not.

Also, hitting a growth spurt with no full time product managers. That’s not good.

Unethical practices. For example, if you’re asked to generate “rosey” sales reports for the board. In fact, anything where you’re working against the board screams: “Run!”

Being very liberal with stock options. Nothing says “failing company” like a comp package that’s mostly options.

Also, pay attention to the quarterly cycles. If the company is going to collapse, they’re probably going to collapse at a quarter mark.

> Another issue is when the core product itself is faulty in a way the customer will notice.

Products with (really) rough edges is part of working at a startup. You may be dissatisfied with what you’re shipping but it is all about how much it is solving your customers’ problems.

> Unethical practices.

This should definitely inform whether you stay or go as well as how much trust you can place in mgmt/co-workers.

Unethical practices by no means imply that a firm will fail. For that matter, dysfunctional firms don’t always fail either.

1. Starting to lose funding and lower profits each year

2. Starting to hire cheap 3rd world employees to save costs

3. Starting to look anywhere to minimise costs including people's salaries and benefits

The first problem is that you don't know what failure is at all levels of the company -- especially management.

Whole businesses are spawned, funded and collapsed where investors and founders make a good buck, despite the business never turning a profit or standing on its own legs. To some, that is still a success...

Your job is to try and figure out how the people above you view success and see if it aligns with your version.

Chaos is more often signs of a suceeding startup than a failing one. Often the demand is too high and tech debt is taken on.

Pivoting is not bad either, it's practically the job scope of early stage startups.

The main symptom I've seen of failing startups is trying to look good. e.g. you're asked to buy products and reimbursed for it, adding features of no value to customers but valuable to investors.

Biggest sign is paychecks don't come and excuses are given.

Is what you're working on core to the startup's business? Any idea on what the burn rate of your company is? Any problems getting revenue or further funding?

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