Ask HN: How should I evaluate a startup as I job hunt?

You should (primarily) think like an investor. You are investing your time after all. For example, look at the questions that YC asks during interviews.

And then you have to think a lot more about the team/culture fit since you will spend way more time with the team than any investor.

Here are a handful off the top of my head:

  - Are you profitable? If so, for how long?
  - How long until you need another round of funding?
  - Are you planning on hiring more staff? If so, for what positions?
  - How do you gauge promotions/raises?
  - Who will my coworkers be?
  - What is the office setup like?
  - What hours will I be working?
  - How much time is spent on maintenance vs. new development?
  - Is your code unit tested, and do you have version control?
  - Who do I report to?
  - Is there a vision for where the company will be in # years?
  - Ignoring equity, is my compensation fair?
  - How fast is the company growing? What are some recent milestones?
  - Is the office located in a place that's easily accessible?
  - What will I be working on after my first month here?
  - How often do you have meetings?
  - How do you manage deadlines?
  - How long have you (the interviewer) been at the company?
  - What attracted you (the interviewer) to the company?
  - Why did you choose the current technology stack you're using?
  - Are you having any issues with stack?
  - How much of the code is understood by >1 person?

Is this the sort of list you're looking for?

   - How long is your runway?

Review HN "Who Is Hiring?" and see what resonates with you: http://news.ycombinator.com/item?id=4323597

If the question more is "What startup might be successful?", team is important, fundraising helps a lot and your instincts are frequently correct.

In my opinion you should choose the one you most like, the one where you really believe in the idea.

The most important point in an startup is the team, the idea can be marvelous but without the perfect team... it's just shit

From the perspective of wanting to get paid for your work, you will want to consider the same things that investors do because the company won't be able to pay you if they run out of money. Do they have a product that people will pay money for? That's the key question.

Another is: Will they actually pay you. or does the contract they give you talk about "binding arbitration"? That's a huge red flag of a failing company looking for a way to cheat its employees and is doubly bad for a woman or minority jobseeker since she would not be able to sue them for sexual harassment or racist promotion practices. If you care about the company obeying the law on any matter affecting you, you will want to retain your right to sue them in a court of law.

An employee stock plan might be seen as another sign of poor financial status since companies in poor shape will look to their employees as a last-ditch funding source. However, this conclusion is more coincidental than automatic. Many healthy startups have an employee stock plan and getting into one early can make you rich if the company strikes it big.

You will want to be paid by the hour, rather than a salary, so they cannot work you more than 40 hours a week without paying you overtime.

As for the company culture, you may be able to get a sense of it by simply keeping your eyes open. Is there a dress code or are people in T-shirts? Is everything neat and tidy or do people have toys at their desks? These are things you can see for yourself. As for the core principles, you can simply ask.

You will also want to consider whether you will be happy and productive in the position, and if you can see yourself making a positive contribution to the company and its customers.

Think hard about your appetite for risk. As companies scale up the work and character and risk profile changes, roughly with each order of magnitude of employees. The same company a year and 10 people later may suit you better.

I highly recommend looking for any dissonance between the ground-floor workers and management/leadership.

The best scenario you can find (a truly rare gem of an employer), whether startup or established company, is where everyone is on the same page. Vision should be clear, strengths should be accurately gauged, and problems should be acknowledged and well-understood. You should be able to share what you've learned from the workers with management (and vice versa) without any looks of shock, fear, or panic. Overall visible stress should be almost non-existant.

The worst scenario is where the company's leadership lives in its own reality and blames any issues on workers or outsiders. Run from these employers; no amount of money is worth working for such people. The easiest way to test for this case is to just talk openly about what you've learned about the company and how the future looks given their strengths and weaknesses. Watch out, in particular, for the hushed phrase "I shouldn't tell you this, but..."

Realistically, though, you'll find a lot of employers somewhere in between. Just know that the distance between the reality of leadership and worker is going to be proportional to the pain you'll feel working at that employer and that such distance tends to increase over time.

You first have to decide what kind of startup you're looking for. Do you want to be hire 1-10, 10-50,50-100, or 100+? Each of those company sizes is a substantially different beast and depending on which one is more suitable to you the other questions change dramatically.

If you're looking at the 50-100 range then the startup is obviously more mature and the nature of the company isn't as important so much as the work you'll be doing. If you're looking to be hire 1-10 then the company itself is a lot more important, especially the founders.

Let's assume you're looking to join a smaller team. If that's the case then I'd concentrate almost everything on the founders. Ultimately it comes down to trust. Do you trust these people to focus on important matters? Do you trust them to be fair and mature about tough decisions? Do you trust them to treat you and your coworkers right?

For many people this can be a difficult thing to gauge and it's made especially more difficult since the founders will be actively trying to sell you and therefore make themselves look better.

Ultimately there are some high level filters that can help carve out a lot of options and save you a lot of time. And these are actually the same kind of filters that investors apply:

Are they a YC company?

What is the experience of the founders? Have they done a startup before? Do they have an "in" for the space?

Does the company have traction?

The reason why I put YC company first is that pg and co are going to be better than most people at picking winners. So if you limit your choice to YC companies then you're going to have a much lower chance of joining the wrong company. I say that from some bias as being a founder of a YC company, but also because I've met many of the founders of other YC companies, and it's just crazy how many of them are awesome and trustworthy.

A tl/dr version would be

1. Runway - how much runway do they have until they run out of money assuming revenues will not increase (which of course they should)

2. Culture - does it seem good? Good gauge - are people there even when they don't have to be.

3. Compensation - does it pay enough to make your comfortable and have upside in stake? If so, raises don't matter as much, make your own raise by adding value to your stake.

Ask: "Will I have fun working here? Will I wake up in the morning excited to come in to work? Will I learn something new every day?"

Working for a short period doing something you love in a company that ultimately fails is better than doing something you don't love for 30 years. You can always get another job.

There is no magic way to tell. Go with your gut, keep some of these lists and advice in mind, but ultimately if you have some opportunities on the table, just pick one and don't look back. And don't be afraid to walk away if you start to feel unhappy. "I'll just stay here until ______" is just an excuse.

Get to know the people. I personally feel that these traits trump everything else if you're keen on growing as a person and professional:

  - Vulnerability (openness)
  - Forgiveness
  - Passion (for both the company and life as a whole)

It's hard to find cut-and-dry questions to determine these traits. Try to talk about what these people love to do, even if that's outside of their craft or the company.

  - What was their first job?
  - Where are their "people" from? (Family, ancestors)
  - What do they dislike most about their industries culture?

Although the answer doesn't matter, these questions can expose a lot of a persons personality and history in a short amount of time.

There's plenty of great advice here. I'd add one more signal to evaluate:

How tight is their hiring process?

Hiring is one of the most important tasks of a startup. As the business grows, it identifies new things it wants to get done and eventually that means adding people.

Watch your interactions with a prospective employer carefully. Are they swift in communications to schedule your interviews? Do they seem prepared when you show up to talk? Is their follow up clear and prompt after your first meeting? A startup with their shit together should be able to go from phone screen to signed offer letter inside of 7 - 10 days.

Any longer than that suggests sloppy management, poor communications skills or lack of focus. Or worst of all: lack of clarity/urgency around the initiative they're hiring you for.

If their hiring process is sloppy, it's a safe bet you're in for a bad time.

On a related note, how do I evaluate a startup from the inside? I'm currently interning there, but its my first internship, so I have little basis for comparison besides my friends experiences.

Financially, as if you were an investor. They're the people whose job it is to evaluate startups' prospects, and they care above all about two things: the founders and the market. The founders should be relentlessly effective, and the market should ideally be of a size that can only be obtained by riding on trends beyond the startup's control (but visible to few besides the founders, or the market would already be full). Joining the young Microsoft, for example was a bet on Bill Gates and microcomputers, both of which turned out to be very good bets.

As a hacker you may be able to judge market bets as well as or better than many investors. E.g. I think HN readers knew Dropbox was onto something before most investors did. So if you go wrong it will be in judging founders. For many hackers, especially the unwordly sort, it's hard to distinguish true Bill Gateses from mere good talkers.

I wish I could offer some advice about distinguishing, but that would take a whole essay. The best simple hack I can think of is completely self-serving, but I'll offer it anyway: piggyback on our filter. YC specializes in distinguishing between genuine Gateses and good talkers. We're occasionally fooled, but far less often than a typical hacker looking for a job would be.

One small thing.

Interviewers leak. Sometimes they start on anecdotes. Anecdotes are solid gold. Give some of your own if it seems appropriate.

I've turned down lucrative jobs because of the "hilarious" anecdotes of a CEO changing his mind weekly.

As an employee, a person contributes time, full-time. IMHO, time is the ultimate investment. Something, that cannot be recovered or bought with money. OTOH, an investor puts money and some of his time. Huge difference. If I were to join a startup, I would be thinking, do they deserve my time? Is it worth investing your time?

First figure out for sure just what you are you looking for out of a startup. Personally, my reason for wanting to work for a startup compared to a large corporation is to get to have more influence and work on a wider variety of interesting problems across different domains. And you can get that without needing to be in a business that has potential to grow to a billions of dollars valuation. But if you're interested in maximizing your chances for crazy sums of money while you're at a time in your life that lets you take risks (and there's nothing wrong with going after that, just don't make plans around an assumption that it'll happen), that'll drive your search in a different direction.

Perhaps what not to use as an evaluation?

Think like an investor and a normal job seeking employee when making these decisions. Is the idea going forward and the equity going to be worth a lot eventually. You might not be throwing $100k their way but you're investing your time, which has value, in the startup. The thinking like an employee is just like any other job hunt, find a place you want to work and will be happy there but be ready for layoffs, crashes, etc like any business can face.

Things to consider: -The leadership, is it someone you want to work for and if multiple people do they get along with one another. -How much you believe in the idea, if you're not all to crazy about the ideas you come across in your job search then you may be better off applying for a more stable company. -Their funding, if they are funded that makes it easier for them to pay you continuously. -Their offer to you, the questions that matter with this is how much of both cash and equity will you be receiving, how much you believe in the idea and what you believe that stock will be worth later on, and what your base salary is. If you're not head over heals in love with the idea and whole heartedly believe it's the next big thing with the original founder already having done market research/testing to prove that customers want the product then don't be the technical cofounder of a 'potentially' successful company.

1. Do you and the team share the same passions?

2. Can you live with these folks 24/7?

3. If things go south do you feel like you were better for the experience?

Thanks for asking this!