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Evaluating the Rocket Ship – Joining a Scaling Startup

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Sheryl Sandberg often says, “If you're offered a seat on a rocket ship, get on, don't ask what seat. Just get on" but how do you evaluate if you are looking at a rocket ship that will reach the moon or one that will never leave the launch pad?

“If you’re offered a seat on a rocket ship, get on, don’t ask what seat. Just get on.”

Sheryl Sandberg often cites this advice from Eric Schmidt as the best career advice she ever received but how do you evaluate if you are looking at a rocket ship that will reach the moon or one that will never leave the launch pad?

Both potential employees and founders need to evaluate startups through the rocket ship lens. It is important for employees to join growing companies and it is just as important for founders to evaluate their company in order to recruit a generation of talent that is following this advice.

See minute 5:00 for the context around Sheryl Sandberg’s quote.

How to evaluate startups that are scaling or about to scale:

  1. Is the company solving a real problem for customers? Are customers willing to pay for this solution? These seem like very obvious questions, but it is amazing how many times people assume that because a certain prestigious venture capital firm invested at a high valuation, the company will be successful. The key fact that you need to remember is that this is one of many companies that the VC firm has in their portfolio. Whereas, you are only betting on this company being successful. You cannot rely on another person’s analysis. You need to think critically and know the market before you join it. Without doing your due diligence on the market, the customers, and the company’s business model, you cannot hope to know if you are on a rocket ship that is taking off. Companies can gain traction for a time period on market buzz but ultimately, sales need to be made and cash needs to start entering the company’s balance sheet.
  1. Rocket-ship-animatedWho are the founders and management team? This is the biggest area that I see people failing to evaluate deeply enough. A startup is highly dependent on its founders and its core management team. Therefore individual personalities can highly impact the trajectory of a startup. For this reason, I believe that completing a due diligence on the founders and management team is key. You can do this by both talking with those individuals yourself and talking to people who have worked with and invested in them before. History is a good indicator of a person’s character an
    d ability and it is important to know it.
  1. Who are the backers? Rocket fuel is not cheap. While it is not about only working for companies backed by a certain prestigious venture capital firm, it is important to know the startup’s ability to fundraise both within their investor base and with new investors. Nothing stalls a rocket launch like running out of money.
  1. What process did the company take to hire you? This is another area that people often overlook when evaluating. Was the company and
    its employees thoughtful and prepared when talking with you? Were you able to get your questions answered? Good companies pay attention to who they hire and take the process seriously.

In the end, no one knows for sure which company will succeed but going through the due diligence process of evaluating the rocket ship is critical in order to avoid foreseeable failures. That way, you can enjoy the ride.

3 thoughts on “Evaluating the Rocket Ship – Joining a Scaling Startup

  1. Great post Kate. I think you’re right to dig deeper, beneath Sandberg’s quote to the practical implications of today’s job searcher. I also think you make a great point I never thought about around “what process did the company take to hire you”. That’s a smart yardstick that I think few use.

    I think a follow-up blog post that could add additional depth to your analysis would be around company size and traction. You mention that it’s important to evaluate whether the company is solving a real problem for customers, and whether customers are willing to pay. I completely agree.

    The challenge, however, is that the greater the evidence the company is solving a real problem and the greater the evidence customers are willing to pay, the less equity you will get upon joining the venture, and the more upper management ranks will already be filled by experienced executives. I think Sandberg is a unique case — with world-class smarts, pedigree, and connections — such that she could join Google and Facebook very high up the ranks while still receiving significant equity.

    So, for the rest of us, I think the useful caveat to your framework is that potential employees must assess what company risk profile is right for them. Use your framework above to understand the key considerations, then recognize that the most life-changing opportunity may be those where all of your boxes are not checked — thus allowing an employee far greater equity or position within the organization.

  2. Thanks for your post, Kate!

    I actually have a question around your third point:

    Is it appropriate, as a potential employee, to ask the company who is backing them? I can imagine in many cases such information is not necessarily public–please correct me if I’m wrong–and I feel like that might be an awkward question to raise during the interview process. Do you have any tips/advice on how to navigate finding the answer to that question? Are there resources available that we can use, or do you have ‘strategy’ for poising the question in a way that is not offensive or too “probe-y”? Or is that question completely open and acceptable in the start-up world?

    Thanks in advance for your thoughts!

  3. Great post Kate. I think a lot of us are thinking of joining a seed stage start-up as one possible alternative for actually founding one. This post is very helpful in assessing the different opportunities that are out there. If I were to rank these in the order of importance in my opinion, I would say that the founders and management team are probably most important. Although business model and customer’s willingness to pay is the next important factor, I think there is a higher probability that smart and capable founders will pivot or find a way to succeed.
    In assessing the founders and team, I think its helpful to also consider personality fit with you as well their previous track record. If you think that you could work well together, if their values are compatible to yours, if their management philosophy is agreeable etc. are all things you may consider in conjunction with their experience.

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