Previously, I shared some of the questions I like to ask when interviewing with an organization for a Product Manager position. One thing I quickly realized while interviewing back in the day was that interviewing at an established company or former startup is quite different than interviewing at a startup, and that’s because the startups deal with a lot of risk around viability.
You might say that all organizations, whether they are startups or not, deal with risk, and risk comes with working anywhere. But, as a Canadian working in the US on a work, I knew that if I wanted to work for a startup, I needed to understand for myself whether the startup in question had the potential to succeed. I took this aspect seriously because if I joined a startup that tanked, I would have to leave the US promptly and then try looking for a job in the US from Canada…and that’s something I wouldn’t be very excited about doing. In addition, I wanted to find an organization that I could be with for the next couple of years.
So how could I understand whether a startup had potential to succeed (or at least survive for the next 12 months)?
Well, by having an honest and open conversation with the founders of the startup and asking these questions:
- Why did you start this startup?
- What is the main problem you are trying to solve?
- Why are you the person to solve it?
- How did you find your team?
- What is the bench strength of the management team?
- How much experience does the team have in the company’s industry?
- How long has the team been in place?
- Where did the management team work previously? What were their track records at their previous employers?
- How stable is the team? Is it a committed team or a revolving door?
- What are your top 3 priorities in the next 3 months?
- What’s the exit strategy? Time frame and goal if acquisition. If growth, what is the growth plan?
- What’s the current runway?
- When is your next funding round?
- What are the company’s revenue drivers?
- Has revenue been growing? Stagnating? Or, something in between?
- How successful has the company been at selling its services or products?
- What products or services are driving revenue? Is it just one or two, or are there more?
- How concentrated is the customer base? Are sales dependent on just one or two key customers? If so, who are they? How stable are their businesses/industries? How much pricing leverage do they/can they exert? Is this a short term situation or this long term?
Costs & Cash
- What is the company’s cost structure? Are most of the costs fixed or variable? How have they evolved over time?
- What is the company’s cash flow situation?
- How much cash does the company have?
- What is the company’s burn rate?
Some of these questions are quite direct, but that’s the point. If founders are comfortable answering these questions, then you can safely assume that when things get rough, they’ll let you know about it so that you can make more informed decisions, instead of hiding it.
Founders sharing the health of the startup with employees and potential employees is quite analogous to relationships: the more both of you share and be vulnerable to each other, the healthier, and happier the relationship will be, since it builds trust and comfort for both parties!
Do you have any interesting questions you ask startups? Please share!