Ask HN: How do you know if the startup you are working at will succeed?
What are signs that it is worth continuing to work at the startup you are currently working at? How can you tell whether it will lead to a better career outcome that taking up other opportunities?
7 comments
I worked for failed startup, and now I work for successful startup.
How do I know the one I work for now is successful? Founders are transparent about burn rate and available funds and also they do not hesitate to share information about revenue. This does not sound like much but from my experience is already a good sign.
Maybe some users here will find it difficult to believe but previous startup I worked for (the one that failed) was not transparent at all. We would hear stories of potential big.co customer that will bring millions and then... we would hear about another potential big.co customer that would bring millions... And every month or two we would hear the same story. And then one day we was informed that the company can no longer keep us so we are released with immediate effect.
Revenue is (usually) a sign that people want the product you build. And if people want it hard enough to put their money into it then you know you solve a real problem and that there is actually market for it.
How do I know the one I work for now is successful? Founders are transparent about burn rate and available funds and also they do not hesitate to share information about revenue. This does not sound like much but from my experience is already a good sign.
Maybe some users here will find it difficult to believe but previous startup I worked for (the one that failed) was not transparent at all. We would hear stories of potential big.co customer that will bring millions and then... we would hear about another potential big.co customer that would bring millions... And every month or two we would hear the same story. And then one day we was informed that the company can no longer keep us so we are released with immediate effect.
Revenue is (usually) a sign that people want the product you build. And if people want it hard enough to put their money into it then you know you solve a real problem and that there is actually market for it.
I was at a startup that failed, I was actually the last non-founder to leave. Not because I didn't see the problems, but because I was the last one of us to find a new job. Everyone began looking for a new opportunity around 6-12 months before our runway actually ran out.
Here were some of the issues:
Over time, the information flow from our founders degraded in quality and quantity. When you're at a company of 5-10 people, everyone should know everything.
When engineers left they weren't replaced. Tech transfer was just a formality, and projects were shelved entirely. If a startup isn't growing, it's dying.
The founders attempted the same monetization strategy for about 2 years with zero success. Not as in "unsustainable" but literally, not a dime!
So TL;DR: if your company is shrinking, non-founders kept in the dark, and nothing seems to be changing in strategy when no one is paying you, the company is probably going to die and you should move on. However, staying around until the end of your runway will lead to a glowing reference for future job searches.
Here were some of the issues:
Over time, the information flow from our founders degraded in quality and quantity. When you're at a company of 5-10 people, everyone should know everything.
When engineers left they weren't replaced. Tech transfer was just a formality, and projects were shelved entirely. If a startup isn't growing, it's dying.
The founders attempted the same monetization strategy for about 2 years with zero success. Not as in "unsustainable" but literally, not a dime!
So TL;DR: if your company is shrinking, non-founders kept in the dark, and nothing seems to be changing in strategy when no one is paying you, the company is probably going to die and you should move on. However, staying around until the end of your runway will lead to a glowing reference for future job searches.
How would you qualify a startup as growing? Is it limited to getting new customers?
In the abstract, growth means "more." Its good to ask "more what?" but the "what" depends on your business/market. You should be able to ask your founders what their growth metrics are and what they look like.
If your startup is growing, it means that you as an employee will have more work to do, problems to solve, bugs to fix, features to ship, employees to help onboard, meetings to schedule, etc.
When that starts to stagnate (no new hires, no new sales, no new bug reports or feature requests, nothing new to discuss with colleagues, etc) that implies a lack of growth.
If your startup is growing, it means that you as an employee will have more work to do, problems to solve, bugs to fix, features to ship, employees to help onboard, meetings to schedule, etc.
When that starts to stagnate (no new hires, no new sales, no new bug reports or feature requests, nothing new to discuss with colleagues, etc) that implies a lack of growth.
This question is a non-starter. Of course nobody knows. Even if the startup is an astronomic amount of funding and strong growth it could still fail. One man's definition of success also drastically varies from another's.
Enjoy your life, put some money in the bank.
If you're lucky, your hard work and intellect will reward you one day. Granted, only hard work get's you a seat at the table, connections might improve the cards you're dealt.
Enjoy your life, put some money in the bank.
If you're lucky, your hard work and intellect will reward you one day. Granted, only hard work get's you a seat at the table, connections might improve the cards you're dealt.
I've worked on a couple of SaaS startups and it was important that MRR was growing every month and there was low churn / cancellations.
I always assume it will fail. I ask what I can learn/gain even if it fails.
There are often key assumptions the financial statements are based upon. Without clarity, you would never know.
Investors are a pretty big signal for this. For example startups that raised money from YC is pretty much guaranteed to be successful.
What about companies that are in early/pre-seed stage? Any way to know?
Can you define successful? Only one single company from YC has gone public. To me, having "successful" illiquid stock is the definition of "not successful" from the employee's perspective.
That's a really good point, but I assume there have been other YC Companies that have exited (acquired, etc.)
Being acquired very frequently yields a payout for investors and executives, and a $0.00 check for rank-and-file employees (or even less if they foolishly exercised their stock before acquisition).
Two YC companies have gone public, actually - Dropbox and PagerDuty.
Thanks for the correction, but the point still stands. Two out of "over 2000 YC companies." [1]
[1] https://www.ycombinator.com/companies/
[1] https://www.ycombinator.com/companies/
Do you have stats on that? Based on my anecdata, I don't think YC startups are guaranteed successes at all.
Funding is in no way a guarantee of success, and many YC companies have failed. Here's a list https://docs.google.com/spreadsheets/d/13HIAEwspdjqKENvi5uHJ...
The list only includes companies that have reported, I'm sure many others just silently die, or barely keep operating.
Another reason investment doesn't equal success, look at Pebble, $63m investment, acquired for $23m. How much of that acquisition money do you think went to employees.
Not to pick on Pebble, if your definition of success is shipping a product people love, that defines a new industry, and that you can be proud to have worked on, I'm sure that ticked all the boxes, but from a monetary standpoint, it was not a winner.
The list only includes companies that have reported, I'm sure many others just silently die, or barely keep operating.
Another reason investment doesn't equal success, look at Pebble, $63m investment, acquired for $23m. How much of that acquisition money do you think went to employees.
Not to pick on Pebble, if your definition of success is shipping a product people love, that defines a new industry, and that you can be proud to have worked on, I'm sure that ticked all the boxes, but from a monetary standpoint, it was not a winner.
This is false, there are plenty of failed YC companies. Just search around you'll find lots of "Our Incredible Journey" type posts. Yes they have an advantage but are not immune to anything...