Thinking about joining a startup or a business? #
If you’ve been thinking about starting a business or carefully considering to join a new startup, this should be helpful to give you some insight if the company is built on solid foundations or not just haphazardly going through the motions of what looks like an exciting venture. I’ve just re-read Peter Theil’s Zero to One (affiliate link). One of the insights in the book outlines the 5 qualities that every successful business have. They are: a vision, a secret, persistence, a strong culture and a kick ass sales strategy. I’ve outlined them below with some questions to ask as your evaluate your the startup you are considering.
vision #
A company creates meaning
This the north start. The guiding ideal that pulls every decision to forward to the main goal. This is the direction. This is where the company is wanting to go and informs what is acceptable behavior within in it’s culture. This is sometimes called the mission of the company. For example, it could be to eliminate crime or create lasting experiences. This is what gives the company a soul. Having a clear vision that is clearly articulated gives it meaning.
Some questions to tease out their vision: #
- What is the vision of the company?
- What major decisions have you made recently? How was that impacted by the vision?
A secret #
shhh.
A secret is something that is not quite well known to the masses. The key here is that there are lots of secrets to be uncovered. If people did know about them, people wouldn’t know what to do with that information. These are the very cumbersome processes and procedures that people undertake because there really isn’t a better solution available to them. In the eyes of Value Proposition Design, its the things that people find annoying, but put up with because they don’t have another choice. The secret lies in a key perspective in discovering the correct thing. It does not mean it cannot be known. Remember, with the right perspective you can uncover a secret.
Some questions to ask gauge if they know their secret: #
- How well do you understand your audience?
- What pain points does your solution address?
- How much are people willing to sell
Persistence #
Persistence over profit
The goal of anything that has a life is to livelong. Just like a living being a company’s goal will be to persist as long as it can in some form or another. Some may think that having a profitable company is important, however, it not always necessary in the near term. It is ok not to be profitable in the beginning. It’s not ok not to pay yourself and the folks that work for you. A company’s value is determined by the profit it makes on it’s lifespan. Consider the Rule of 40 where the sum of the growth rate and the profitabilty equals 40 or greater. i.e. as long as the company is growing while the profitability is not that exciting, you can still value a technology company’s future value greater. Investors use this to determine if a company is worth investing in or not.
Some questions to gauge the company’s longevity: #
- What are some actions that this company is taking in order to last in the market today?
- What are some markets that remain unaddressed?
A strong culture #
Culture eats strategy for breakfast
You need a strong culture. Above all, the kind of people you hire in the company are going to be people who align with the kind of culture you need to operate and execute towards the vision. A culture is what gives meat to your vision, it is what makes the pragmatic steps towards your end goal. This is where culture fit matters and what informs the formal and informal Code of Conduct where specific behaviors are rewarded and not rewarded. These are underpinned by some guiding principles like: No job is small enough for anyone, Everyone does their best, or action over slow scrutiny
Some questions to ask to get a sense of their culture: #
- What are the guiding principles in your team?
- What kind of behavior does this culture promote? What is a recent promotion that happened in this company, what qualities did this person exhibit that got them there?
A kick ass sales #
talk your walk
A major component of providing value, persisting and executing a vision is to communicate it to those who are interested in them. In order to provide value you have to communicate that to the correct people. You need a robust sales strategy where which each customer segment is clearly outlined and identified. For each segment the way they prefer to communicate and their pain points are known.
Some questions to ask to see how the product is delivered: #
- What are some pain points that a customer segment have and how does your solution solve it?
- How often do you communicate with your customers and how?
Good luck in your interview #
In your interview, I hope this has help you generate some questions that you can ask the company. Using this framework from Zero to One (affiliate link) should help understand how the startup aims to deliver value to their customers, and essentially gain a foothold in the market that they are attempting to crack. Best of luck and I hope you find a place you can flourish in.