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The opportunity to join a startup can appear extremely attractive, and it’s something that you will probably consider at some point during your career, if you haven’t already. The lure of an agile, entrepreneurial and fast-paced environment has great appeal, especially if you’ve worked in a bigger business for many years and have felt bounded by the bureaucracy or intricacies of a complex matrix structure.
Working for a startup comes with a multitude of advantages; they are a great way to boost and broaden your skillset, to gain a wider understanding of business and can lead to large financial gain. Startups typically have the agility to adapt at an unprecedented rate. Their dynamic nature means they can quickly respond to market demand, which in turn can lead to rapid growth within a relatively short space of time. In short, they can be a very exciting and pioneering place to work.
Whilst working in such an environment may seem incredibly desirable, there is an element of risk involved. With only 25% of new firms surviving 15 years or more, you need to be sure that you fully assess the risks of a startup before joining one. We have identified 5 key questions to ask to ensure your career move to a startup is the right one for you.
This question is possibly one of the most important; the saying ‘success breeds success’ has never been truer than in the startup world. Do your research and find out who the founders and main stakeholders are within the business and investigate their previous professional experiences.
Having a leadership team with relevant experience will ensure that the startup has the best chance of success. If the business leaders have worked in a startup previously, they will have encountered a lot of the issues that a new company will face at the beginning of its journey. If they have prior industry expertise, they will bring with them invaluable market knowledge and insights and a long list of networks, which they will be able to utilise and tap into. Having strong foundations and this kind of direction can make or break a young startup business.
A key part of risk assessment is that of the financials. Is the company funded by venture capitalists, is it privately owned, or is it built on private equity? How long does the business have this investment for? And how easy was it to secure that investment in the first place?
Businesses that have succeeded in securing funding will have undergone detailed due diligence checks, which include corporate structure, strategic fit, intellectual property, employees and management.
Not only will this indicate others’ confidence in the firm and its growth projections, but also the company’s own attitude towards growth and spending.
The biggest cause of failure amongst startups is an insignificant product. If the service or product isn’t solving a client or consumer problem - or if it mimics an existing product or service too closely - the risk of failure is tenfold.
Another important question is, does it have the scope to develop? It may be relevant now, but will this business still be offering something unique and in demand in 10 years’ time? Will it be able to adapt with the market?
CB Insights looked into the common causes of startup failures and found that a lack of market need, too much competition, a poor product and ignoring customers were at the top of the list. All of these relate to a poorly thought-out business model, making this consideration a major one. If you are serious about joining a business then make sure you quiz them about their target audience at the interview stage. They should know the target demographic for their offering inside out.
This question isn’t really one you can answer from online research; it would be a discussion to have with a key decision-maker during the interview process.
You want to find out where they see the business going. Do they plan to merge, acquire other companies or sell? Or do they want to expand their offering and branch out independently?
Finding out what’s in the pipeline is important to see if the leaders have thought that far ahead. You want the reassurance that they will be putting the right measures in place to get there.
Secondly, you want to check that your own long term plans are aligned with the projection of the company. Will you be able to get out of the role what you would like to?
Future plans can also indicate the level of investment leaders have in the company - a want to sell for example implies that they see it as more of a short term project. Plans for acquisition or expansion suggest a much longer-term investment.
Startups are a different kind of workplace that don’t often follow the traditional 9 to 5. The last question to ask then is to yourself; what do you want to get out of your next career move?
Working in a startup can accelerate your career trajectory and bring an increase in professional responsibility, a wider breadth of tasks and greater exposure to different areas of the business. There is a chance to make a real impact. However, these are often a trade-off for longer hours, a more unpredictable work schedule and a salary package that doesn’t come with all of the added extras. You need to know what to expect in the role - and be sure that it is what you’re looking for.
There will always be some risk attached to joining any startup, but that shouldn’t be what deters you. By asking the right kind of questions you can assess the risks before you make any decisions to see if the move is a risk worth taking. Some of the brightest stars and biggest success stories in the industry right now fall within the startup bracket. Working in a startup environment can be every bit as fruitful and rewarding as working in a large corporation, it’s just about ensuring it is the right one for you.
CSG has worked in partnership with a wide range of Medical Device startups throughout the years. Whether you are looking to build up your team of experts or you are considering whether or not a startup is the right environment for you, please don’t hesitate to get in touch: firstname.lastname@example.org
CB Insights, The Top 20 Reasons Startups Fail, 12.02.18
Investopedia, Top 6 Reasons New Businesses Fail