What exactly is a “startup”? Assessing your fit
You don’t need to be in tech or have a connection to Silicon Valley to count as a startup. The only real qualifiers for what makes a startup is that it’s a company that hasn’t fully hammered out its business model yet.
The specific culture of the startup you join will vary from company to company, and will be informed by details like investors, city, stage, size, and sector. But there are a few qualities (almost all) startups share that you’ll want to keep in mind while you determine whether or not startup life is for you:
- You have to be prepared to manage uncertainty. If you’ve ever worked at a large corporation, then you know that at their best, they’re well-oiled machines. Startups don’t always have systems and processes in place yet–part of your job will be helping to build those out, regardless of what your actual job title is. This might mean late nights, role changes, surprise re-brands or unexpected product pivots. Your whole business model might change one quarter. In short, be prepared to be unprepared.
- You need to be ready to push the limits. Working at a startup means not being afraid to ask, “Why are we doing this?” You should be the type of person who’s always looking for places to improve (and the type of person who has the patience to weather the storm when those improvements cause a re-org). These tend not to be jobs you can just clock in and clock out from–you need to be passionate, and sometimes, brave.
- Think like an owner. Equity means you have part ownership in the company–its purpose is to encourage you to think like an owner. Your goal is to help increase the value of your company’s equity. Where are its blindspots? Where can you help make a process more efficient? It’s not enough to be told what to do; in a startup, you have to take initiative. .
ODF10 Fellow Rnjai Lamba, today the founder of Oxytocin, described ‘thinking like an owner’ like this:
“After joining a 5 person seed stage company while moving from India to Mexico, the proximity to my founders was the real perk of the hypergrowth to 100 employees and 10X growth over the next 4 years. This proximity enabled me to be able to learn deeply from them and eventually find ways of outperforming my founders to scale my impact.”
City, Sector, Stage: Three Factors To Consider
Once you decide that you’re ready for the challenge, how do you choose which startups to apply to? There are thousands of startups out there, and even if you filter just for interesting roles, that still might leave you with hundreds of options.
Here’s one formula to help narrow your focus:
Step 1. Pick a sector (or two or three). What do you gravitate towards when you read the news? Autonomous vehicles? web3? Edutech? What are you most passionate about? What do you have the most experience in? Where can you apply your existing experience? Use these questions to help guide you.
Picking a sector might be challenging if you feel like you don’t have a coherent “professional story.” The truth is, especially in Startup Land, not everyone’s career travels a neat line from A to B.
On Deck 50 Fellow Daniel Gamboa had a wide range of experience and a lot of passion, but wasn’t sure how to re-focus it. It was only after talking to other Fellows who’d had similar experiences that Daniel had a creative breakthrough:
“There was another person that had a very similar background to mine. We both converged on this idea: how do you leverage a technical and financial background to pivot into something that is more interesting, and that can really capture those two things without necessarily having to focus on one of those specifically?”
Talking to other people who are asking the same questions you are can help you put the pieces together–often, they’re already there. It’s just a matter of figuring out the right framing.
Step 2 - Pick a city. Startup land is clustered in just a handful of cities. If you’re a remote worker, or simply don’t want to move, treat this step like a filtering tool to help narrow your search. (Or, you can skip it all together.)
If you are willing to relocate, however, think carefully about your choice of city. Will there be other people in your industry there? Are there multiple companies that interest you in one place? Do you like the overall culture, can you see yourself putting down roots?
And remember, if you like where you are, that’s okay, too. There are different approaches, and there’s no single right way to break into startups–every approach has its pros and cons. These are just preliminary considerations.
Step 3 - Pick a stage. We’ll get into more details on this below, but which funding stage you join a startup at is important, too. Here’s a handy way to think about funding stages in broad strokes:
- Jungle Phase: The path for this startup is still very unclear, and they’re pre-PMF (Product Market Fit). They have 2-50 employees.
- Dirt Road Phase: The path is clear, but windy, and still bumpy. They haven’t put down asphalt yet. They’re probably early post-PMF and pre-scale sales and marketing. They have between 50-1,000 employees.
- Highway Phase: They’ve nailed scaling, sales, and marketing. They have 1,000+ employees.
A Quick Primer on Startup Funding Stages
A startup wears different hats across its lifespan.
The same company might feel drastically different depending on when you enter. Joining as employee four is a much different vibe than joining as employee twenty-four.
The different stages of a startup’s life are usually defined by the nearest fundraising milestone, which are covered below.
Bootstrapping, a typical piece of the Jungle Phase, though not always, means surviving without accepting investments from “official” channels such as venture capital. This could be done off the generosity of friends, family, or even a founder’s own pockets. It could also be done by generating enough revenue from the get-go. Perhaps a startup already has a successful product, or doesn’t need thousands to build one. Perhaps the test model is maintainable by few, or even just the sweat of the founder. This can allow for organic growth, as profits are reinvested. The founder and early adopters retain the lion’s share of equity in the venture.
On the other hand, this may not work for a company with a sizable tech platform to build, or many months of R&D to facilitate. In these cases, seed or angel investor funding can happen at the outset. It’s exactly as the name implies: this money plants the seed of the business, giving it the initial kiss of life.
Some even undergo a pre-seed round, a less formal practice where friends, family, and acquaintances invest. This may be easier to acquire, and the deals may be less shrewd than you’ll encounter in proper funding rounds. But it comes with the same warning as ever getting into business with your loved ones: things don’t always go well. Not all relationships can weather a failure.
Either way, these investors typically receive equity, a promise that their cut will be worth something when the business grows into a tree. In this phase, you can expect a focus on market research and product development. You’d be in very early, and would likely have some say in the future of the tech stack. We’ll explore later on why that’s a blessing and a curse.
Buyers beware, there’s the potential that a company in the seed or pre-seed stages dissolves to nothing. It never advances beyond vaporware. It’s debatable whether it was ever a “real” company, but absent a product, market, or possible model, a startup may not be able to acquire funding in future rounds. It folds, and the day you find out may be the day you learn you’re out of a job.
Learn about what it takes to thrive in a startup in our session, Early Employee Mindset.
Understanding Series A, B, C (and Beyond)
Many startups still won’t have enough runway to fully take off.
If more fundraising is needed, a business will enter their Series A round. The startup is expected to have some small fire that investors can drench with gasoline. Opportunities are scaled and optimized. New markets may be tested. Even if it doesn’t yet exist, the company should have a plan for long-term future profit. In other words, the seed has become a sapling.
Knowing this, Series B and Series C rounds are self-explanatory. In the former, the goal is more gasoline. Expand market reach of something already proven. Meeting a potentially ravenous demand. In the latter, the goal is… more gasoline. A startup in its Series C round is already successful, but may seek funding to develop new products or even acquire other startups. In fact, startup cannibalizations are booming.
Beyond the early-stage funding rounds, your skepticism as a prospective employee is just as valuable. Many think of late-stage startups as safer bets, and they can be, but that doesn’t make them meccas for their workforce.
A startup may continue on to series D or even E rounds. This could be an excellent sign, just needing another push before an Initial Public Offering (IPO). Or perhaps public support is booming and more fundraising just makes sense. However, it could indicate that Series C goals were not yet achieved.
As an employee, you may be walking into a beehive of flustered developers and unhappy management. In this case, it’s more important than ever to suss out the duties of your potential position, and what support structure is already in place to achieve future goals. If you aren’t comfortable with an unhealthy work-life balance, this may be a reason not to pursue or even turn down an offer as more facts come to light.
At the same time, these things are incredibly difficult to determine from the outside.
Research with sites like Google News, Reddit, or Blind can reveal more. You’re looking for bad press around the company, and potentially disgruntled employee rumblings. Of course, you’ll hopefully find the opposite!
Another way to do this research is just through word of mouth–here’s a place where dedicated online communities can go a long way. People won’t only share tips about what it’s like from the inside, but the hiring process or even jobs that haven’t been posted yet. Online communities are like digital water coolers: they’re where you go to get the information that’s not publicly available.
Depending on the round at which you enter, your compensation package could vary wildly. Startups beyond the Series A round are incredibly competitive with respect to salary. They’ve just raised money specifically to acquire kickass engineering talent, and they want to retain you through difficult periods of growth. Of course, what’s kickass to a guy in Ohio may be more laughable to a dev in California who’s propositioning FAANG companies.
However, perhaps of more interest to some is the promise of equity. The earlier you get in, the more likely you are to be paid in some form of ownership in the company. In the long run, this could be worthless, or it could make you immensely wealthy. You become an investor too, though with your sweat more than your money.
The later the stage of a startup, the closer they get to IPO. If you’re interested in the risk of pure equity, these are not for you. Many of the Series C, D, and beyond startups will begin offering stock options, or the ability to buy future-shares that then vest over a period of time. You’re coming in with less of the risk that the earlier employees took, and as such, there’s much less potential for reward.
Pick a Winning Startup Using These Three Factors
How do VCs pick winning companies?
They test them against three broad categories: team, market, and business model. When you’re picking a place to work–you should do the same.
Say that sounds too daunting though–who are you to be determining what company has the best team or business model? You can make some early judgments, but you’d like a second or third opinion.
Every year, Jeff Bussgang collects a list of startups he considers rocketships, organized by region. Lists like these can help guide you–hype is cheap, but a trustworthy recommendation goes a long way.
Applying for a job
Life is good in Startup land right now.
Startups have pivoted entire models and reworked revenue streams from the ground up as a result of the pandemic. The world has had to adjust to working from home following widespread lockdowns and continued threat of COVID-19 infection. For many companies, there still isn’t an end to the policy in sight.
As grim as that sounds, there’s never been a better market for workers.
Right now, you can get on LinkedIn, AngelList, StackOverflow Jobs (which is, by the way, an extremely underrated tool and maybe the best for tech jobs), and twist a few knobs. Apply search terms for whichever tech stacks you prefer. Experience level. Check the “remote” box. Go.
A SWE, mid-senior level, remote just now revealed 14,000 results.
Simply click through them and take note of the company size: one to ten people is likely still a seed, while eleven to fifty might be a startup in its Series A or B, attempting to grow rapidly. And fifty-one to two-hundred could be Series C or beyond. The correlation isn’t always perfect. Startups tend to grow their workforce as the fundraising increases, but this isn’t taking into account the startup that gets a great product to market quickly and begins explosive growth without needing further rounds.
Of course, perhaps none of these companies are startups at all.
As in, perhaps they’re just small companies, content with their size. All it takes to confirm is a quick click into the company’s LinkedIn profile. The more prestigious funding behind a startup, the more likely they are to brag about it directly in the job posting. Presto, in just an hour you’ve fired off ten or twenty applications. Now your qualifications must speak for themselves, and you don’t need me to tell you how important your resume is. Best of luck to you, you only need one to stick.
Breaking In *Intelligently: Warm Intros
Unfortunately, firing off an application isn’t always going to be successful, even if the odds right now are better than they’ve been in a long time. If you’re angling for a more prestigious startup, or a startup that has a lot of hype around it, or even just one where your value add might need a bit more explanation, you’re going to want a warm intro.
Sometimes, these opportunities can fall in your lap without even looking for them explicitly. That doesn’t mean you don’t have to try, of course, but making yourself visible to the right people can go a long way.
Take Jeff Schnurr and Cheryl Francis, two On Deck Fellows, who were able to find one another through our Talent Hub:
Jeff Schnurr (On Deck Scale) found Cheryl Francis (On Deck 50) through On Deck’s Talent Hub, our hiring platform designed to connect fellows across programs. Think of it like LinkedIn–if LinkedIn was a curated network of people you knew you could trust.
Cheryl’s profile quickly stood out to him because of her wide range of experiences.
Jeff says: “It was clear she was looking for a role that challenged her to drive change with the potential for high impact and growth. Her interview process was part onboarding - she spoke to multiple members of the team and the questions she asked proved she was willing to push for clarity and understanding. In my experience, the questions people ask are more important than what they state. She also agreed to get on a plane and fly to Lagos, Nigeria for her first day. Cheryl was all in from day one.”
Read their full story here.
There’s also OD50 Fellow Jeff Sefa-Boakye, who found his current gig at Robust Intelligence, when they gave a presentation at On Deck:
“The return on investment of On Deck 50 was incredibly tangible. For the role I’m in right now, I met the founders through my Fellowship.
The co-founders came to speak. Robust Intelligence was one of the companies that I felt was genuinely tackling a big, important problem: AI risk and security. I felt that for my next role, I wanted to tackle a big problem with smart people. I reached out afterwards, had a bunch of conversations, and got hired. Without that opportunity, I wouldn’t have even known about this role and I’ve been here for six months now.”
On Deck removes a lot of the elbow grease that embedding yourself in existing online communities might require. Where it can be hard to determine where to start when you’re going at it alone, On Deck curates opportunities for ambitious people to connect.
It gives you the time, the place, and the people–putting it all together is up to you.