GirlbytheWindow’s Startup Red Flags

1,766. That’s how many startups have been created in the United States since January of this year. When I started working in the tech sector (beginning of 2016), it was at 3,211. Working at a startup was the “it thing” to do once a person graduated college. Startups marketed themselves as a fun workplace, with constant happy hours, crazy amounts of VC money, beers, and foosball in the break room. It catered to young college grads who wanted a job but still wanted to hold onto the last dregs of college life. You had a decent paycheck and unless you had a family to financially support, you were only responsible for yourself. That worked well with a lot of twenty-something-year-olds, for a while.

Startups have taken off in the last two decades because every one of those small companies wanted to become the next Salesforce, Google, or Facebook. If that didn’t work, the next best thing was to get acquired by a larger company and make hundreds of millions to start over.

Having been in the industry for a few years, I can see why startups can be seen as glamorous by those who want to make an impact in the tech industry. I can say that after almost a decade, my rose-tinted glasses came flying off. I’m here to share some startup red flags that you can look for while interviewing for your next role.

Ask for the company’s burn rate
The burn rate is the rate at which the company is spending its investment money before generating positive cash flow. If they can’t answer it, check their Crunchbase profile. Take a look at how much money they’ve generated through funding and the number of perks outside of the standard compensation package they showcase. Quarterly company trips? Are kegs delivered daily? It may be a sign that they’re just burning through cash and are not creating a sustainable business.

Ask about employee turnover, without asking about employee turnover.
Ask your hiring manager what their managerial style is. Are they hands-off? Do they like to walk their employees through their everyday tasks? Do they openly trash-talk their ex-employees?

Are they able to explain their own product?
If they’re not able to describe what they sell, the rest of the company probably doesn’t either. This can mean that their customer churn is constantly high, and you might not want to work for a company that’ll be gone in a few years.

What is the team’s track record of success?
This can give you so many clues about team culture, team fit, and the company’s alignment with its own employees. If there is something to be said about a company’s success, it’s how their own employees stay on track to continue said success.

Trust your gut.
Yes, the paycheck sounds cool, but does it demand more than 80 hours a week? Are the employees in constant fear of being fired? Today’s interviews are mostly virtual so I try to check Glassdoor or Comparably reviews to get a glimpse of what the culture is like. If it doesn’t look positive, it probably isn’t. Time to move on.

This doesn’t mean that you should disregard startups. They’re a great way to experience working in different roles and deciding which one you want to become an expert in. It also allows you to create an intimate network of people who also share the same mission you have. Some of the people I met at the first startup I worked at are still my friends today. However, I have to emphasize that it takes a certain type of strength and perseverance to work for startups of any size. If you think you have what it takes, do it, and have some fun.

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