In today’s context and especially in India, startups have become an increasingly popular choice for professionals looking for a new challenge. However, not all startups are created equal, and it’s important to carefully evaluate a startup before jumping onboard. (Don’t just look at the salary!). The right choice will save you from a lot of potential heartburn (more so in the current environment). Here is a checklist of things to evaluate – along with the time it will take. With these you can really judge whether you and that startup job you are gunning for – are made for each other or not. Let’s dive into it:
Founders & Core Team (30 mins)
The A-team of the company is one of the most important factors to consider when evaluating a startup. Strong founders, core team with complementary skills and most importantly – the right team for the right domain. For instance, a startup that is developing an app may require a team with technical expertise such as software developers, designers, and marketers to succeed. In contrast, a startup that aims to develop a new medical device may require individuals with medical and scientific backgrounds. In addition to having the right team, it’s also important to research the founders and key employees. Look at their prior experience, skills, backgrounds, people feedback. For example, if a startup is developing a new fintech product, it’s important to have a founder who has experience in the financial industry, or someone who has a strong track record in building successful companies. Similarly, key employees should also have relevant experience and expertise to ensure the startup’s success. And no, you don’t need to hire an investigative agency. You will be amazed at the information a simple google search can throw up on people. For the rest, there is LinkedIn! Map out the personas of the team and try to get a sense of what the team is like as individuals.
Things to search for: Linkedin profiles, Blog posts, Social profiles, Event participation, Awards, Quotes
Industry & Market (20 mins)
One should evaluate the market opportunity and potential for the startup by considering factors such as market size, competition, and growth potential. Too much research? Just do a simple search on the existing players in the industry and that itself will throw up a lot of relevant information. For instance, let’s say you are looking at joining a startup in the food delivery industry. Do you think it’s a good idea to start one at this point in time? Unless there is a very strong differentiation or technology, how successful do you think it will be with Zomato and Swiggy going all guns blazing? Another factor to consider is the startup’s industry and its potential for growth and disruption. Looking for an adventure? Look for a startup that operates in an industry with a clear need for innovation and disruption. For example, a startup that aims to develop renewable energy solutions in response to climate change could have a significant potential for growth and impact. Looking for stability and long term growth? Look for a startup that is doing well in an industry that has already been disrupted. Another thing to look for in a startup – its competitive advantage over incumbents. For instance, a startup that uses advanced technology or innovative business models that are superior to those of established competitors may have a higher chance of success. Consider the example of Tesla, a startup that disrupted the traditional automotive industry with its electric vehicles and advanced battery tech.
Things to search for: Market size for target industry, Key companies in target industry, Funding in the target industry, Key trends for target industry, Competitors of target company
The product/service (30 mins)
When evaluating a startup, it will also be worthwhile to assess the quality of its product or service. Look for a product or service that solves a real problem for customers and provides value. For example, let’s say there is mobile app for language learning. Its app uses AI-powered algorithms to create personalized lesson plans, and its user interface is intuitive and easy to use. The app is designed to help language learners overcome common barriers such as a lack of motivation, difficulty in memorizing vocabulary, and lack of speaking practice. These are real problems, adding value to customers. And how will you know about these features? Go to the company website! Spend an hour on it. If you don’t find the information there, ask the recruiter or the hiring manager. No one will say no. In fact, good companies will be more than happy to provide this information to you! Another indicator you can look for is the startup’s inclination towards innovation and future development. For instance, a startup that invests in research and development to improve its product or service, create new features, and expand into new markets may have a better chance of long-term viability.
Things to search for: Product/service features page, Product/service reviews on playstore or review sites, Client and user testimonials, Product/service comparisons with competitors
Funding & Resources (20 mins)
Evaluating a startup’s funding status and financial stability is crucial when considering whether to work with them. Of course no one will share their runway directly, but you can research on the amount raised, estimate the burn (estimated revenues-estimated expenses) and arrive at the runway (money raised/burn) to know whether they have enough capital to execute their plans. It’s important to understand how the startup is currently funded and what is the quality of investors (meaning have they invested in other good companies as well). Startups with strong financial runways are better equipped to handle unforeseen challenges and can weather market downturns. Of course you don’t only need funds to succeed, which is why the points mentioned earlier are also crucial. When evaluating a startup’s financial stability, it’s also important to consider their exit strategy. Investors expect a return on their investment, so it’s important to understand how the startup plans to provide that return. This could be through an acquisition or an IPO, and it’s important to know what’s the plan or the general direction in which the startup will head towards.
Things to search for: Target company funding, Target company investors, Investor websites, Target industry funding, Competitor funding
Culture (20 mins)
Finally, evaluating a startup’s culture and values before joining them is important as well, as it can have a significant impact on its success and the satisfaction of its employees. Look for a company that has a positive, transparent, and inclusive culture that values its employees and encourages collaboration and innovation. This can be evaluated by researching the company’s values, mission statement, and employee reviews. Do they have flexible working conditions? Is it a 6 day work week? Will you be frowned upon if you take leaves or don’t work over weekends? Do employees have good things to say about their managers? Is the founding team actually a team or is it a one man show? Ultimately, everything gets done by and with people. If the general culture is not giving you the right vibes – then probably you need to dig a little bit deeper. Reach out to ex-employees. Talk to peers and see if they can find a connect with existing employees. Culture is something that might be last on your list of decision points, and you may still join the company provided all the other points above are favourable – but do you think it’s a good idea? Probably discussion for another post!
Things to search for: GlassDoor ratings and review for target company, Company social pages (look for employee focused posts), Company website (Team page), Social search for company name (will throw up employee posts)
So there you have it. A timed/finite framework that can help you decide on that job. You may look to score and rank these points as per your own preferences. For instance – Give the startup scores out of 10 for each point and then average them out for a consolidated score. Or you may also apply weightage to each point and arrive at a weighted average. So if you give culture more importance than other points, give it a 1.5x weightage. Many other variations are possible as per your preference.
Parting food for thought: What will be the score at which you will go for that job?