8 things to watch out for in Startup jobs

While many dream of entrepreneurship, there are reasons why MBA students won’t start their own companies immediately after graduating. For such folks who aren’t ready yet to embrace true-blue entrepreneurship, thanks to their MBA education loans, there is another option. Join a start-up.

While the Fortune 500 companies in technology, consulting, finance and other industries dominate the MBA placement space, the adrenaline rush that these conventional jobs offer don’t come close to what startup jobs can.

However, as with the bigger well-established firms, a startup career comes with its own 50 shades of black, white & gray.

We generally try to keep these blog posts apolitical, but this topic is apt to examine the AAP analogy. It’s a startup that shows tremendous potential. The underlying idea and philosophy is powerful enough to draw the best talent from diverse spheres. But it’s also a startup that’s growing faster than the founder ever imagined.

From a helicopter view, The bigger vision appears to be clear. But the granular level execution and random experimentation raises questions and concerns.

Hopefully, body and mind will learn to work together in harmony soon. Till then, the traditional & social media that generally struggles to get interesting content, is going to have a field day.

Look at start-ups in technology, healthcare, retail and other fields that have become successful. And then look at a whole lot of ‘wannabes’ who want to replicate their model. What happens to them?

Some fall by the wayside pretty quickly. Other startup companies are lucky to see growth, but in spurts. This is when the body is becoming stronger, but the mind hasn’t had a chance to become mature. Each muscle is trying to figure out its function and where it fits into the bigger scheme of things.

For instance, the technology department may be strong, but the hiring isn’t. The startup may have raised funds, but apart from the presentation that got them the money, the company starts struggling with the strategy execution.

Alright, enough political and medical analogies for one day. Getting back to the main point, whether it’s the examples or startup jobs, the takeaways are similar.

8 things to watch out for in Startup jobs

Whether you have an MBA or not, there are a few things that you can add to your due-diligence list (that’s a fancy term for background research).

1. See how long the startup has been in existence

Trust surveys to come up with random statistics, but apparently most start-ups don’t last beyond 5 years.

Taking the actual number with a pinch of salt (or chutki bhar sindoor, if you are Ramesh babu), the message here is – stay away from start-ups that have been able to garner a lot of attention, but their revenue model and long-term sustainability is hazy.

2. Validate the startup’s financial muscle

One reason why start-ups fizzle out is because their cash fizzles out. The burn rate (how quickly they use up the available funds). Most are ‘boot-strapped’ (self-started) based on funds of the founder, friends (and fools!).

Some powerpoint savvy folks manage to raise external funding from VCs (read more about how venture capital works). Either ways, there are too many holes where money can be flushed down. And in the euphoria and irrational exuberance of the moment, it gets tough to see the end coming.

3. Look at the background of people who’ve joined the team

Look at the About Us section of startup websites. The founding members invariably tend to have fantastic profiles, qualifications and track records. That’s probably one of the reasons, their idea got funded.

After you are done with your oohs and aahs, move to LinkedIn or any other platforms where the rest of the employees are hanging out. What have they done in life? What are they doing right now? Do you see yourself gelling with them?

4. Check out the attrition history of the startup

Many employees who join the startup hoping to strike gold, get disillusioned after learning that the day-to-day schedule is far more gruelling, uncertain and unrewarding than they assumed.

Their stock options mean nothing more than paper till the startup gets a major exit and gets listed on the NASDAQ or NYSE. Most don’t have the patience to hang around till that happens. They move. Think whether that might happen to you as well.

5. Watch out for the market vibes

Any startup worth its salt (or sindoor, if you are…) will get talked about in the media, in startup events, VC conferences and online forums. See what folks who aren’t insiders are saying about them.

What concerns are they raising about the business model? What are they saying about the people who run the show at the startup?

6. Are the startup jobs & roles well-defined

Even if your recruitment process at the startup didn’t involve yogasanas, it’s a given that the founder was looking for flexible employees. It’s difficult to find a perfectly defined role that won’t change over time.

But at the same time, if employees have no sense of direction and constantly in a fire-fighting mode, it can get very unproductive and stressful. Resulting in point 4.

7. Ask yourself if you can handle the VC culture

Startups are in a hurry. Because the venture capitalist who’s fund them are in a hurry. As part of your perks, you might get free T-shirts with witty captions & free lunch coupons. But always remember, there’s no free lunch.

The rich guy who paid for all those freebies is waiting for some bigger milestones. In financial terms, an exit. This creates a strange electically charged environment in funded start-ups.

8. Have a Plan B

After all has been said and done, Murphy’s Law still appears to be more consistent than Newton’s. If the super-glamorous startup that you had joined starts losing its sheen, what are you going to do?

Will you join another similar startup? Or will you head back to the cosy comfort that you were used to at the bigger (and badder) companies? How will that impact your career aspirations? Are you going 1 step ahead or moonwalking, MJ style?

If you are willing to be part of exciting and untested waters, be ready to pay the price for it. Also, it helps if you can do your homework before joining.

Anyone who’s worked for start-ups? What good or bad experiences did you have? Pleejh post anonymously, if you fear that your founder might be stalking you online.


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Sameer Kamat //
Sameer Kamat
Founder of MBA Crystal Ball. Author of Beyond The MBA Hype & Business Doctors. Here's more about me. Connect with me on Google+ | Twitter | Facebook | Linkedin

3 Comments

  1. Vikram says:

    Hi Sameer, i am highly impressed with your humorous style of writing ..:) In my case, i did take a leap from working in a big French MNC for few years to a new start up co. of big Indian brand. Here, as you said, roles are not clearly defined, always in fire – fighting mode, processes and systems are not in place. I felt really awkward in the beginning to deal with ambiguity in everything. Now, i am part of the team for developing processes (sharing whatever i learned by working in MNC) but expectations from the senior management are sky high. They want the work to be done like a world class co. and obviously, with scant resources.

    In my view, before jumping one should introspect where one’s personality is suited. Some are good in working with ambiguity and some are good in working with system and processes. One needs to be selfless and do not expect rewards in a short time. I had clear intentions to move out of my comfort zone and venture into unknown in a way to find my capabilities.

    Regards,
    Vikram

  2. Sameer Kamat says:

    Thanks for sharing your experiences, Vikram.

    Good to see that you figured out a way to adapt to the ambiguity and the sky-high expectations.

    Hope you get the fruits of your labour (and patience) that you deserve, soon.

    Best of luck buddy!

  3. achintya says:

    well my story is the exact opposite, well not exactly but well almost, scouted for startups did not find many good enough mnc did not consider me for lack of an mba degree so finally joined one old startup which is not funded but functions old school style and is bootstrapped and living happily with its small team.
    so they task me with creating plans for scaling up their startup. since the rest of the team is much older than me it falls upon me to create systematic processes, find them clients, give feedback on their new products and define roles and responsibilities for future recruits. there is no pressure in the atmosphere as the market is nascent and the seniors absorb the pressure leaving me to my own comfort space. my pressure is created by my head which wants me to take this startup to dizzying heights though the team is not that accomodating but they have a great understanding of scaling and have put in place a very rigid basic corporate structure which can comfortably scale.
    so my roles so far have taken me across all functions in the company and also assisting all the cxos.
    now they took me into important meetings from the beginning and letting me decide if want to hire new members into my team.

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