Thinking of joining a startup? Proceed with caution
Thinking of going to work for a startup? “You better drink the Kool-Aid – and like it,” says Robin Daman, partner at the Waltham, Mass.-based staffing firm WinterWyman.
At a big company, employees can kind of, sort of believe in the mission, or perhaps not buy into it at all, so long as they show up and do their part. But for a startup company to succeed, every employee must be a fervent believer in its product, technology or service, as well as an evangelist who’s willing to spread the word, Daman says.
On the other hand, “No one should ever join a small startup simply because the product sounds good,” warns Charley Polachi, managing partner of Polachi Access Executive Search in Framingham, Mass.
A great idea will never get off the ground without the right team in place.
Should a startup’s “Kool-Aid” appeal to a candidate, how can he or she then assess the team’s chances of success? And what are the pros and cons of working for a startup as opposed to an established company?
“There are obvious cons and risks associated with joining a startup: it might not take off, compensation is low and work-life balance is much less likely,” Polachi says. “You’ll put in long hours and potentially be jobless at the end of the year due to lack of funding.”
Startups typically have little money to pay employees and offer equity in the company instead. But equity can be a motivator, says Daman: “You will find yourself more committed to helping the company succeed, and the long hours and the pay-out may be worth it.”
Meanwhile, though, paychecks at the end of every pay period are not guaranteed.
Don’t be surprised if the workday includes janitorial tasks as well as opportunities to “assume more responsibility and stretch your skill set, because startups run very lean,” says Matthew Walden, a partner at the New York staffing agency Infinity Consulting Solutions.
Wearing so many different hats can spur career growth, he adds, but it can also lead to burnout.
Getting in on the ground floor doesn’t guarantee a ride to the top. “Startups need very different skills at different stages of their evolution, so you may not be the right person at that next stage,” says enterprise growth strategist David Nour, CEO of The Noir Group in Atlanta.
On the plus side, “Startups tend to be highly collaborative environments where individuals who are invested in the enterprise quickly find that their opinions are valued and taken into account as decisions are being made,” says attorney Kathleen Swan, a partner in the Corporate Services Group of the law firm Quarles & Brady, with nine offices nationwide.
Though hours are long, they tend to be flexible, and working from home or at a coffee shop is often encouraged. “Startups generally have either limited or no office space. Long-term lease commitments are typically avoided until revenues are stabilized,” Swan explains.
To assess a startup’s chances of success, look first to the leader. “The founder’s past efforts are a high-level predictor of their future success or failure,” Nour says.
For that reason, “Experienced startup leaders and serial entrepreneurs are often best to follow,” Polachi agrees, “but you must be sold on the leader and their vision.”
In other words, drink the Kool-Aid and like it.
Before accepting a job with a startup, “Interview them as extensively and intently as they interview you,” Nour advises.
Has the company targeted a big enough market? Is there adequate funding? What’s the marketing strategy? Which milestones have been met, and which still lay ahead?
When evaluating a startup’s prospects, it may help to assume the due diligence of an angel investor, says Brad Hancock, director of the Neeley Entrepreneurship Center at Texas Christian University in Fort Worth, Texas. “You’re not investing money, but you are investing years of your life,” he says, “so make sure the interview is a two-way process. The entrepreneur should be prepared for this – for selling the opportunity as much as interviewing the candidate.”
Salesmanship alone does not a good leader make. “Look for unquestionable integrity,” Nour says. “Money, or lack thereof, makes people without principles do stupid things.”
Finally, make sure the Kool-Aid is good and healthy. “Entrepreneurship is not just about getting rich; it’s about doing something that gives life meaning and makes the world a better place,” Hancock says. “It’s about making meaning as much as making money.”
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