Due Your Diligence
by Eric Newman
As we continue to endure this frigid winter, we have been teased with glimpses of better weather here and there. The hope of spring is usually just enough to get people through the last wretched throes of winter, because they know there is something much more promising at the end of this struggle: spring.
MBAs interested in joining a startup after school go through a personal winter throughout the entire school year as they watch most of their classmates scurry around campus in their suits to various interviews attempting to secure jobs in consulting, finance, non-profits or big industry. Then they watch those same classmates plan crazy vacations and exotic weekend trips throughout the rest of the year.
Those interested in startups are mostly on the sidelines. The reality of the hiring cycle at small, high growth tech companies is that there is insufficient certainty about the business to reliably predict the hiring needs more than a month or two ahead of time, at most. For MBAs interested in startups, the personal winter is only manageable because with the emergence of spring means they can finally start making headway in the job search process.
Charlie O’Donnell from First Round Capital (@ceonyc) has a great post for MBAs who want to work in startups that has gotten a lot of buzz and rightfully so. It is a very well thought out post that is useful for both MBAs. I personally am very appreciative of the post and have used it in my search. For those not familiar, he points out that most MBAs approach to finding that great startup job. Instead of meeting with a bunch of VCs and “asking what opportunities there are for you, you should be telling me what opportunities you are going to create for the startups I know.” I am assuming that anyone really interested in working in a startup has read that post and taken Charlie’s advice to heart.
Now assume that you were successful in your approach and found a cool startup that bought your pitch and is excited to bring you on their team.
STOP. Take a step back. Breathe. You are not done. Despite your desire to immediately jump on that offer, you still have more work to do.
If you follow Charlie’s post to the word, you will be overlooking a key element of any job search. You will have failed to do due diligence on the people you will be working for. There is a lot of romanticism about working at startups from the ivory tower of academia. Case studies almost always focus on the unbelievable success stories in entrepreneurship and startups. At the very least the companies have done something of note, or else there wouldn’t really be a reason to create a case study in the first place! It is not all rainbows and puppy dogs, however.
The reality is that when you are working at a startup, it is often a very small group of people who are working intensely together for long hours and in close quarters and going through extreme emotional highs and lows. When things go bad it can get very ugly. Talk to anyone who has been in the industry for a while and they likely have some horror stories. At the end of the day, the personal relationships matter and they matter a lot.
So, before you accept the job, you need to do your homework, not just on the startup and what they do and how you can add value. You need to do homework on the people you will be working with directly in the startup, as well as the others on the team, if possible. Find out how they manage people and how they think about developing the talent on their team. You are not going to get any big fancy development programs like in big companies, but you should have a reasonable expectation that your boss is going to take an interest in you doing well, learning and generally kicking-ass. But, different managers go about it in different ways.
Finding this information is not trivial. You have to get creative with how you get information. And face it, if you are going to survive in a startup you need to be resourceful anyways.
Some suggestions for potential sources of information and how they might be useful for you….
This is all a means of gathering bits of info and you need to figure out if there is any discernable thing to learn. You are trying to get as informed as possible to manage the risk. At the end of the day, you will probably have to go with your gut on this, take the plunge and see what happens. If you’re not willing to do that, you probably won’t do very well in a startup anyways.
As we continue to endure this frigid winter, we have been teased with glimpses of better weather here and there. The hope of spring is usually just enough to get people through the last wretched throes of winter, because they know there is something much more promising at the end of this struggle: spring.
MBAs interested in joining a startup after school go through a personal winter throughout the entire school year as they watch most of their classmates scurry around campus in their suits to various interviews attempting to secure jobs in consulting, finance, non-profits or big industry. Then they watch those same classmates plan crazy vacations and exotic weekend trips throughout the rest of the year.
Those interested in startups are mostly on the sidelines. The reality of the hiring cycle at small, high growth tech companies is that there is insufficient certainty about the business to reliably predict the hiring needs more than a month or two ahead of time, at most. For MBAs interested in startups, the personal winter is only manageable because with the emergence of spring means they can finally start making headway in the job search process.
Charlie O’Donnell from First Round Capital (@ceonyc) has a great post for MBAs who want to work in startups that has gotten a lot of buzz and rightfully so. It is a very well thought out post that is useful for both MBAs. I personally am very appreciative of the post and have used it in my search. For those not familiar, he points out that most MBAs approach to finding that great startup job. Instead of meeting with a bunch of VCs and “asking what opportunities there are for you, you should be telling me what opportunities you are going to create for the startups I know.” I am assuming that anyone really interested in working in a startup has read that post and taken Charlie’s advice to heart.
Now assume that you were successful in your approach and found a cool startup that bought your pitch and is excited to bring you on their team.
STOP. Take a step back. Breathe. You are not done. Despite your desire to immediately jump on that offer, you still have more work to do.
If you follow Charlie’s post to the word, you will be overlooking a key element of any job search. You will have failed to do due diligence on the people you will be working for. There is a lot of romanticism about working at startups from the ivory tower of academia. Case studies almost always focus on the unbelievable success stories in entrepreneurship and startups. At the very least the companies have done something of note, or else there wouldn’t really be a reason to create a case study in the first place! It is not all rainbows and puppy dogs, however.
The reality is that when you are working at a startup, it is often a very small group of people who are working intensely together for long hours and in close quarters and going through extreme emotional highs and lows. When things go bad it can get very ugly. Talk to anyone who has been in the industry for a while and they likely have some horror stories. At the end of the day, the personal relationships matter and they matter a lot.
So, before you accept the job, you need to do your homework, not just on the startup and what they do and how you can add value. You need to do homework on the people you will be working with directly in the startup, as well as the others on the team, if possible. Find out how they manage people and how they think about developing the talent on their team. You are not going to get any big fancy development programs like in big companies, but you should have a reasonable expectation that your boss is going to take an interest in you doing well, learning and generally kicking-ass. But, different managers go about it in different ways.
Finding this information is not trivial. You have to get creative with how you get information. And face it, if you are going to survive in a startup you need to be resourceful anyways.
Some suggestions for potential sources of information and how they might be useful for you….
- Venture Capitalists normally have a good understanding of the founders of the company and have been with them along the way so far. After all, they invested in them at the beginning. VCs may not have the full picture, however. Depending on the style of the VC, they might not have a lot of exposure to how the founders treat their team or manage their workers day in and day out. Finding a classmate who worked as an associate at the investing fund might provide a less biased opinion. Alumni working at the funds that invested, but who was not the lead partner on the deal could also provide a less biased view of the company. They probably sit through portfolio review meetings and hear about what is going on in that startup.
- Employees will have the best sense of what is going on in the company and how the management treats the team and the culture. Be careful that the employee isn’t too biased because things are going well for the company right now and times are good. Ex-Employees may give you good honest perspective, but they can be jilted by the fact that they are no longer with that company. Plus, it might prove hard to track someone like that down. Being crafty on LinkedIn could yield some good results however.
- Friends, former colleagues, classmates and professors who know the space could have worked with people on the team and have an opinion to share with you. Ask around. You never know who might now someone who knows someone who you can get good information from.
- Social Media is another way of getting bits of information about the management team. Do some Twitter searches to see what, if anything, people might be saying about the team specifically. You may get some good nuggets on there, but you will have to filter out a lot of noise. Tweets about the product or service aren’t going to help you determine if you will learn a ton from the management team. Blogs by management are unlikely to give you a lot of information unless they posted specifically about how they think about developing the talent within the company.
- The Office is another place where you can get good info. If possible, just get down there and hang out to see how things are going, get a general feel for the culture and vibe. You never know what you might discover, but you won’t discover it unless you put yourself in the midst of the action. If you are in Boston or NYC and the startup is in California, this might be more difficult, but see if you can make that work.
This is all a means of gathering bits of info and you need to figure out if there is any discernable thing to learn. You are trying to get as informed as possible to manage the risk. At the end of the day, you will probably have to go with your gut on this, take the plunge and see what happens. If you’re not willing to do that, you probably won’t do very well in a startup anyways.
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