This is a fantastic guide that I think anyone thinking of working at a startup should read. There is far too much hype, personality and gimmickry it seems around startup hiring much of the time.
We're interviewing lots of folks these days and here are some more questions I think candidates should ask or which we've been asked which I appreciate:
1. How many months (or years) of cash do you have in the bank?
The founder might not say the exact number of dollars, but they should be willing to give you a # of months/years left esp if they're not revenue generating and are reliant on other people's money (VCs, angels). If it's 3 or 6 months, I'd think twice as there are no guarantees of funding being raised and do you really want to be job-seeking in 3 or 6 months or get laid off cuz of the Last In, First Out principal? There are no guarantees of more money being raised. Plus they might be exaggerating about how much they actually have. If I were a candidate, I'd love to hear 2 years but 1 year at a minimum. 2 years only happens generally if the business is real (making revenues/profits)
Clarification: On the money in bank question, you're looking for real money in the bank now. Not what they expect based on their projections or if they land that big customer they are "on the verge of landing" or the "we have termsheets from investors and will be closing in the next few weeks" -- none of those are money, they are promises/hope. So perhaps the better way to ask this is "If you earned no more revenue or got more financing after today, how long will the money you have in the bank today last the company?" -- Also, this is a question you should only ask of a founder, CEO as they'll prob be in the best position to actually answer it.
2. What specific projects do you see me working on if I were to join?
This may in all likelihood change by the time you join, but they should have a clearly defined plan for the areas your talents and skills be used. This will help give you a sense for what you'll be doing as well and whether it's interesting. I also think if they articulate some nasty, unpleasant work you'll be doing, that is good as well. Jobs are rarely all rainbows and butterflies so someone who is going to be honest with you about the good, bad and ugly up front is probably better than someone trying to sugarcoat up front with all the amazing stuff you'll be doing every day to "change the world and make people's lives better."
My only comment on the post is the question about "What technologies do you want to be utilizing?"
Technology enables solutions to problems. So whether some company is adopting some new, shiny technology is less relevant than whether they're using technology in a way that is solving a real problem and ideally becoming a real, fast-growing business.
I think the better question is to somehow gauge their receptivity to being flexible about technology if there is a real benefit to doing so. Not sure the right question to test for "technology rigidity" but that is the question I'd ask if I were a candidate talking to us or any startup.
I think another great question is: Can you describe to me what my first day, week, month will look like? This helps to really crystalize what they see you doing and being responsible for from the get-go.
Absolutely agree. Clarity of thought and a plan are key to look for as startups without a clear view on these things may be indicative of fuzziness on other important fronts, i.e., where is this company really going, how we are going to make money?
To this, I'd add another question if interviewing at a non-revenue generating startup -- "How will the company make money?" And you should assess how realistic this sounds. You don't need to be a VC here but it should pass your own innate b.s. filter.
But if they do answer, "We're going to have millions of users (one day in the future) and will monetize through advertising", my recommendation would be to run the other way (quickly).
For one data point: as an employer, if someone asked me that in a job interview I'd think they were complete mercenaries and highly distrustful/cynical. Would smile, respond with something noncommittal about how the board won't let us share that kind of information, and cut short the interview as soon as possible.
Think about it from our perspective: part of the point of being a non-public company is that you can keep some things close to the vest, like profits and balance sheet. Perhaps 50% of the people we interview don't end up getting a position. What if you take that info and share it with competitors, or plaster it on TechCrunch?
This is particularly true if this was a follow up to a previous question (which is borderline) about how many months of cash were in the bank.
Should you judge the financial health of a company? Sure. Look them up on CrunchBase, observe the surroundings, do some research into market size yourself. But have some tact.
> For one data point: as an employer, if someone asked me that in a job interview I'd think they were complete mercenaries and highly distrustful/cynical.
Now this is interesting. What triggers that reaction? Is it asking for the particular documents, or is it the request for meaningful information?
> Perhaps 50% of the people we interview don't end up getting a position. What if you take that info and share it with competitors, or plaster it on TechCrunch?
Good point, and looking at it from your perspective, sure, I'd be reluctant to open the kimono too. The main thing that stops me, since we're swapping data points, is that it would be the wrong thing to do. Betraying confidences is both unethical and often contrary to the protections of common law.
> This is particularly true if this was a follow up to a previous question (which is borderline) about how many months of cash were in the bank.
If you then smiled and cut me short, I'd be suspicious. It sounds like we both lost.
> Now this is interesting. What triggers that reaction? Is it asking for the particular documents, or is it the request for meaningful information?
It's sort of like a woman who asks you what car you drive right off the bat, on the first date. It indicates she is only in it for the money. And that she also lacks the social intelligence necessary to gain information without revealing that she's only in it for the money.
For a startup to succeed its people need to be a bit irrational. A pure profit maximizing strategy for a good developer is just to do something boring at Google. You aren't joining a startup to do median case profit maximization, you're doing it to (a) do something interesting for a change and (b) have a shot at a big payday.
Now, there's a certain undercurrent here at HN that says "F you, pay me". OK, but this is not the type of personality that is likely to build something great. They are the first ones to bail when things get rough, the first ones to trash their former (or current) employers, the first ones to lay blame.
There is a role for highly skilled mercenaries, just as there is a role for really beautiful golddiggers. But they should gravitate to Google/really rich men, as that's where they'll find a mutually satisfactory exchange.
Why is it tactless to ask whether a company is profitable (or at least has positive cashflow) and, if not, how much time is left at the current burn rate?
Sounds like basic due diligence when checking out a potential new employer to me.
Jacques - I'm all for candor in discussions we have with candidates but in my view, this would be overreaching. I doubt most companies would be willing to show this unless they're hiring someone at the C-level. Plus for VC-backed startups, I wonder if there are limitations on showing this kind of stuff (we're revenue-backed so I can't comment on that)
I think your point #2 is valid even if you ask my initial question about "real money in the bank". If they don't know how much burn they have left or can't answer immediately or are reluctant, that is still a problem.
Small company: I think it's not unreasonable to know at least the headlines of the financial state. After all, small businesses are inherently riskier and I may be making financial commitments based on the presumption that I will have a job.
Big company: I can probably just look it up myself.
Medium company: That's where it gets tricky.
> I think your point #2 is valid even if you ask my initial question about "real money in the bank". If they don't know how much burn they have left or can't answer immediately or are reluctant, that is still a problem.
Are you joining as an employee, or as an investor? Because if you're not an investor, your ties to the financial state of the company begin and end with the paycheck that shows up on your desk every Friday.
your ties to the financial state of the company begin and end with the paycheck that shows up on your desk every Friday.
And the companies ability to pay that paycheck every Friday are of critical importance. We are all investors either with our money or our time (a paycheck is just a return on a time investment). I don't invest either without plenty of research.
That's a simplistic view of matters. My relation to my employer is not quite so atomistic.
I carry enough savings to get by for a few weeks if they go broke or tire of my lame puns; but for many people certainty is worth money. That's why lots of folks prefer steady paycheques to high hourly rates or equity.
1) Companies don't owe you any of this information as an interviewee. Sure, ask about the financial health of the company. But a balance sheet? Good luck.
2) You're going to get lied to in an interview about the health of the company. Do you really think a hiring manager is going to say "Yeah, we're throwing as many bodies as we can to finish this project, or else we're toast"? They want you to believe everything is fine from the day you start.
3) Even the financially secure companies hit the wall, get sued into oblivion, have their core product copied by Google, etc etc etc. You just don't know what will happen next.
1) Companies don't owe you any of this information as an interviewee. Sure, ask about the financial health of the company. But a balance sheet? Good luck.
They may not owe it to you just as you don't owe the company anything like showing up for an interview. It's what people do when they want a job and it's what the company should do if they want good people (this applies a lot more to small startup companies than a big corp because a big corp will have a lot of public information already out there). Good people will simply go somewhere else rather than take unneeded risks.
2) You're going to get lied to in an interview about the health of the company. Do you really think a hiring manager is going to say "Yeah, we're throwing as many bodies as we can to finish this project, or else we're toast"? They want you to believe everything is fine from the day you start.
Once again, if you lie to someone to get them to start work expect them to start looking to leave the day they find out you lied. They also will not likely work very well while they are still there. Of course, like #1, if the company is only hiring crappy people then it doesn't really matter. They are usually happy to take a job anywhere and ride the company into the ground.
3) Even the financially secure companies hit the wall, get sued into oblivion, have their core product copied by Google, etc etc etc. You just don't know what will happen next.
This is common sense. No one expects the company to know everything. That's all the more reason the company should be fairly open with potential employees so employees can walk in knowing what to expect. Let the employee decide before being hired if they want to be a part of a company that can easily be copyable or be a potential scam.
It's what people do when they want a job and it's what the company should do if they want good people (this applies a lot more to small startup companies than a big corp because a big corp will have a lot of public information already out there). Good people will simply go somewhere else rather than take unneeded risks.
Wasn't it mentioned somewhere else in this thread that a lot of small VC-backed startups are contractually compelled to not disclose their finances?
And when a small startup says "okay, Mr Experienced Developer With High Salary Requirements, we can't afford you (because we're very tight on cash), but take this Awesome Restricted Stock in lieu of comp", what do you say? Isn't that the big risk that is supposed to lead to the Big Payday?
And when a small startup says "okay, Mr Experienced Developer With High Salary Requirements, we can't afford you (because we're very tight on cash), but take this Awesome Restricted Stock in lieu of comp", what do you say? Isn't that the big risk that is supposed to lead to the Big Payday?
That's when you hammer them on what exactly they are doing. What is their product, market, sales strategy, exit strategy, pricing, and finances. Ownership, options, etc... are worthless in a worthless company. Risk doesn't mean going in blindly.
And yes, I've turned down options and jobs before because the CTO couldn't really answer these types of questions during an interview. Interestingly enough, the one company that was most secretive and offered me the most options was the one that went out of business a month after I turned them down. Others, I've heard after the fact how they are horrible places to work. The interview process is a two way street, especially in small companies.
As the CTO of a startup you recently closed an investment round, I think the more appropriate question would be: "with the money you got and your budget, how long can you survive?". I would have no problem answering this to a prospective candidate. Without making sizable revenues or closing another round at some point, a startup will run out of cash.
We're interviewing lots of folks these days and here are some more questions I think candidates should ask or which we've been asked which I appreciate:
1. How many months (or years) of cash do you have in the bank?
The founder might not say the exact number of dollars, but they should be willing to give you a # of months/years left esp if they're not revenue generating and are reliant on other people's money (VCs, angels). If it's 3 or 6 months, I'd think twice as there are no guarantees of funding being raised and do you really want to be job-seeking in 3 or 6 months or get laid off cuz of the Last In, First Out principal? There are no guarantees of more money being raised. Plus they might be exaggerating about how much they actually have. If I were a candidate, I'd love to hear 2 years but 1 year at a minimum. 2 years only happens generally if the business is real (making revenues/profits)
Clarification: On the money in bank question, you're looking for real money in the bank now. Not what they expect based on their projections or if they land that big customer they are "on the verge of landing" or the "we have termsheets from investors and will be closing in the next few weeks" -- none of those are money, they are promises/hope. So perhaps the better way to ask this is "If you earned no more revenue or got more financing after today, how long will the money you have in the bank today last the company?" -- Also, this is a question you should only ask of a founder, CEO as they'll prob be in the best position to actually answer it.
2. What specific projects do you see me working on if I were to join?
This may in all likelihood change by the time you join, but they should have a clearly defined plan for the areas your talents and skills be used. This will help give you a sense for what you'll be doing as well and whether it's interesting. I also think if they articulate some nasty, unpleasant work you'll be doing, that is good as well. Jobs are rarely all rainbows and butterflies so someone who is going to be honest with you about the good, bad and ugly up front is probably better than someone trying to sugarcoat up front with all the amazing stuff you'll be doing every day to "change the world and make people's lives better."
My only comment on the post is the question about "What technologies do you want to be utilizing?"
Technology enables solutions to problems. So whether some company is adopting some new, shiny technology is less relevant than whether they're using technology in a way that is solving a real problem and ideally becoming a real, fast-growing business.
I think the better question is to somehow gauge their receptivity to being flexible about technology if there is a real benefit to doing so. Not sure the right question to test for "technology rigidity" but that is the question I'd ask if I were a candidate talking to us or any startup.