Should you join early stage startups?

Early stage startups are great for growth, but you need to know how to choose them.

Hi everybody, how are you doing? I am back after two months, and I hope to continue writing here (in case you are wondering why I stopped writing here, that’s a different story for another day).

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Back to the actual topic, how do you know which startup to join? In case you are wondering if it is just about the product, the team members, and the culture, there is more to it!

I know startups offer plenty of growth and learning opportunities (I've learned a lot in the past ~3 years in startups), but along with learning, you also need to assess the startup's longevity (90% of startups fail, so how do you know if it's the right one to invest your time in?).

This issue is to help you navigate the unanswered:

1. Do thorough research on the founders

I know this is not a usual step (but in this newsletter, we only write the bitter truth). In an early-stage startup, you are betting on the founder as much as the founder is betting on you. Your experience will depend a lot on the founders. Try to understand their vision (and if they even have one), question them often (healthy debates are important; in an early-stage startup, your opinions do and should matter), and look at their previous experiences (if they have had startups before, how did they do, which VCs funded them, and if they are funding them again).

2. Try to understand the finances

At the end of the day, it's a business, and knowing how much runway is left will help you plan your next move, discuss the product roadmap, and plan the go-to-market strategy. While working at startups, it's easy to become emotionally attached and overlook these facts, but you shouldn't. Your career should be a priority, so focus on your personal growth.

3. Look at the company culture

Every startup these days has a handbook that highlights its company culture and ideals. I personally look for words like “empathy” and “customer obsession” and stay away from words like “hustle.” Choose your own poison, but make sure you know what to expect once you are in the company.

3. Understand the product well and ask a lot of questions

Startups are filled with uncertainties, but if you can understand the product and the founder’s vision, it will help you judge the product-market fit. You might not be a growth person, but some research, looking at sites like Crunchbase, industry trends, and analysis will help you understand if there is a fair chance for the product to do well. Ask questions about how the company plans to monetize and how far away the product is from being monetizable. There are graphs and research you can read online that explain startup valuation, when they should start monetizing, and how the next rounds of funding and acquisition work.

We talked a lot about some serious points, but remember that startups also depend a lot on winging it and trusting your gut feeling. If a startup passes the "vibe check," and you like the people and the product, then you might consider taking the leap of faith. This article by Akash Bhadange from Peerlist is a perfect read if you are thinking about whether or not you should join a startup.

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That’s a wrap for this month. Will see you again next month. If you have any suggestions for topics, feel free to DM me @Haimantika