8 Questions to Ask When Interviewing at a Startup



Buffer

Job interviews are meant to be conversations. The interviewer asks some questions and the interviewee does the same. It’s never a good sign when an interviewee doesn’t have any questions. It shows a lack of interest. This is particularly true when interviewing for a startup job because there tend to be so many more unknowns at startups compared to more established, bigger organizations.

Recently someone asked me, “I’m thinking of taking a job offer from a startup. I’ll have to relocate. I have some concerns. What questions should I ask?”

That’s a great question. I immediately thought of Tony Wright’s post: Guide to Evaluating Startup Ideas. It’s definitely worth reading, but it’s also quite high level and doesn’t deal with some of the more nitty gritty issues of startup work life. So here are 8 questions I’d suggest you ask when interviewing at a startup:

  1. What past success and experience do the founders have? Startups are driven by their founders. More experienced founders with past success have a better chance of succeeding again. That’s a good thing. The type of experience is important too. If they previously ran a completely unrelated startup in a completely unrelated industry, that’s less relevant than if they just exited a company in a similar area for $50M. A lot of my own decision as to whether I would join a startup or not would be based on the quality of the founders. Probe aggressively around this area.

    Incidentally, past failures are interesting too. Founders that are willing to discuss their past failures, what they’ve learned, etc. are probably more open, communicative and honest. That’s a good thing.

  2. How much money is left in the bank? Let’s cut right to the chase. Find out how much runway the startup has left. Find out if they’re making money or losing money. Get a sense of their financial health, because this ultimately drives most of the risk in taking a job. I would be concerned if a startup is unwilling to share this information.
  3. What’s the corporate hierarchy? Startups are generally very flat organizations. But it’s worth asking just the same. Who is the direct report? Do you have access to the founders and/or CEO? How does information flow through the organization? How are decisions made and at what levels? The startup’s corporate hierarchy – even if it’s only 2 or 3 levels deep – can have a significant impact on the day-to-day work environment.
  4. How will performance be assessed? Startups often do a very poor job of reviewing employees. They may try and do employee reviews, and then skip them because they’re too busy. Employee reviews are sketchy at best in startups because things change so quickly. It’s not reasonable to do 3 or 6-month reviews and expect to get really meaningful results (both for the employer and employee.) You want to ask this question to get a feel for how the company operates and communicates internally.
  5. What are the startup’s plans for the next 6-12 months? This is a very big, open-ended question. And that’s intentional. As Mark Suster’s points out, open-ended questions tend to draw the responder out more, get them talking, revealing things. This is important in job interviews. If the interviewer is speaking more than the interviewee that’s a very good sign. Granted, it might mean the interviewer is just a talkative person and wasting your time, but often it means they’re comfortable, warming up to you and eager to connect.

    There’s a good chance when an interviewee asks this question that they’re going to learn a lot about the startup. It might be difficult to judge the response received, but look for key points around financial strategies, user acquisition, spending of money, marketing & sales strategies, etc. Specifically, look for details tied to the job you’re interviewing for. If you’re applying to a web / graphic design job, look for information related to the work you’d be doing. How important is it? How often does the interviewer talk about it? In what context?

  6. What’s the competition like? Again, this is a fairly open-ended question. It’s there to get the interviewer talking. It’s also interesting to see what the response is like to this question. If they pooh pooh the competition and don’t take them seriously that’s a red flag. If they’re panicked, that’s also bad. If they can speak intelligently about the competition and how their startup is different and unique, that’s good. This question can also draw some ire from interviewers; it’s interesting to see how people respond if they feel their back is up. That means there’s a risk asking a question like this, but it’s worth it.
  7. How many more people is the startup hiring in the next 6-12 months? It’s always interesting (and potentially very, very important) to understand how quickly a startup expects to grow. If a startup is planning to hire too aggressively that’s a warning sign. They may be overly optimistic. They may run out of cash too quickly. If a startup is planning to hire too slowly that’s also dangerous, because it might mean the workload is overwhelming for each individual. It’s difficult to judge the right number of new hires a startup should bring on in any given period of time (especially as an interviewee looking from the outside-in) but getting a feel for a startup’s recruitment strategy is helpful nonetheless.
  8. What are the key metrics for success in the next 6-12 months? Startups need very well-defined goals. The interviewer might speak about the startup’s future plans, but now it’s time to dig a bit deeper and get more specific. This question is intended to narrow down on specific metrics or targets that the startup is aiming to achieve in the relatively near future. The intent here is to understand whether those metrics exist, how they’ll be measured and whether they’re reasonable. Ultimately those are the metrics that all employees should be judged against.

A lot of this information can be collected through research. Do your homework! Don’t go into an interview cold, especially with a startup. It should be fairly easy to find information about the startup (amount of money raised, competitors, etc.) and find out about employees (or at least see who they are via their social media profiles.) But even if you know the answers to some of the questions above, ask them anyway. So you might find out that one of the co-founders recently exited their last startup. You don’t have to ask them, “Have you ever sold a startup before?” Instead, ask them specifically about that experience. You’ll get bonus points in the interviewee’s mind for having done your homework.

What else would you ask and want to know when being interviewed at a startup?

If you enjoyed this post, please share it!

June 18, 2010 Posted in Recruiting by

  • http://www.facebook.com/people/Todd-Smith/100001115975336 Todd Smith

    Never would have thought to ask these questions. Great article!

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  • http://grattisfaction.com Matt

    How many customers do you have? Can I talk to them?

    If the answer is '0' or none or 'Almost' (which you will probably hear instead of zero or none), be warned.

  • http://www.workathomemomcenter.com Laura

    #2 probably freaks a lot of people out, but it still has to be asked. I didn't ask once and, as a result, was not paid. Even if it makes you uncomfortable, I totally agree with asking — value your time and talent enough to ask about their financial health!

  • Don Demarco

    Thoughtful article. The one point I disagree with is the interviewer talking more than the interviewee is a good sign. In this case isn't the interviewer the person considering joining the startup? Shouldn't s/he ask open ended questions and listen intently? If s/he does most of the talking how will s/he get enough info on which to evaluate the job opportunity?

  • http://www.rescuetime.com webwright

    Great post! I had one queued up on my “list of blog post ideas” but hadn't written it yet. There's definitely a distinction between evaluating the startup idea and evaluating an opportunity AT a startup. I think my post was all around “COULD this idea fly and can I get/stay excited about it?” Your post nails the “Okay, but what about the execution?” part of the equation that is honestly probably more important than the idea itself.

  • arosien

    The most important question is: how will you make money? As Mr. Blank says, a startup is a machine to find a business model.

  • http://www.silver.ag/en/ Igor

    It is much better to be asked these straight questions then be asked for “50 pages financial analysis for next 10 years” as in bank.

  • http://twitter.com/liveortell Chris Clark

    Great article. I'd also like to commend you for your use of specifics. Using quantifiable numbers like 6 – 12 months gets the interviewer thinking and can take the pressure off of you.

    I question I like to ask is, “What aren't you doing?” There are always things start-ups are ignoring because they're too busy. The key is to figure these out and solve them; it increases your value immensely.

  • http://nextgencrm.blogspot.com/ Ami Assayag

    Very cool post. From my experience, not very many people ask these questions. As matter of fact, I usually answer these questions as a way to show candidates the strength of the company even though it is a startup.

    I once hired a guy that was with the same company for 25 years – I normally don't value these guys very highly, but he was really good, so talking through all these points made him more comfortable with the risk involved with startups.

  • irv

    There were some interesting and also debatable points in this post but this question jumped out at me: “How much money is left in the bank?”

    Almost no one on earth is going to answer this question from a prospective employee. Many will consider it at best impertinent. Don't ever ask this question if you actually want the job.

  • http://www.skmurphy.com/ skmurphy

    Ben, George Grellas ( http://www.grellas.com ) added three questions to ask to help you evaluate the equity component of your compensation (if the interview goes well enough that they extend you an offer). It's from http://news.ycombinator.com/item?id=1443117 I have included it below as well

    1. What equity will I get and what form will it take?
    2. What are the total outstanding shares in the company (fully diluted)?
    3. What is the total dollar value of the investor liquidation preference?

    You can get 100,000 options vesting over 4 years, for example, but this could represent potentially 1% of the company (if 10M shares are outstanding) or one-tenth of 1% if 100M shares are outstanding or any other percentage depending on the total capitalization structure. In the one case, on a $100M acquisition (assuming pro rata participation by all parties), you would get $1M and, in the other, $100K. Key point: the absolute number of shares is much less important than the percentage they represent of company ownership.

    Same scenario but assuming preferred stock in place holding $50M of liquidation preference and full participation rights beyond the preference amount: in the $100M acquisition scenario, your 100K of options would net you $500K if there are 10M shares outstanding (1% of the $50M that is left after payment of the $50M liquidation preference) and $50K if there are 100M (.01% of the net $50M amount). Key point: outstanding liquidation preferences can (and often do) materially reduce the equity return to common shareholders, particularly if the company is sold in a marginal acquisition (in an extreme case, the preferred investors can force a sale where founders and employees get nothing).

    Of course, if you haven't vested in full, and you don't have any accelerated vesting on acquisition, the numbers get shaved even more. Say you worked 2 years at the startup on a 4-year vesting schedule, you would net $500K in the best case under the above examples (1% potential ownership that is 50% vested, no liquidation preference) and $25K in the worst case (.01% potential ownership that is 50% vested with $50M liquidation preference).

    These days, many who join startups as employees after the early stages are generally aware of the above issues but it never hurts to remember them if the major reason you are joining is for the hope of a large potential equity payout (if the terms you get are good apart from the equity, and you see it as more of a “tip” if things happen to go well, then these issues are of course much less important to you).

    Capitalization questions are awkward to raise in an interview but are important if equity is key to the offer. Interview as is best for you, then, but make sure to consider these points in deciding how to finalize your deal.

  • stephenhau

    Agreed, it would be impertinent to ask, literally, “How much money is left in the bank?”

    It can always be asked in a more polite manner “Given that this is a startup and there are expenses, how long can we operate for?”

    Like question 6, you're looking for more than just an answer – you should be looking for how they respond to your question. If they dismiss or skirt around it, or react as if it's an unwelcome question, you should be worried. Would you really want to work for someone who reacts like that to valid questions? It's a valid question because you, as a potential employee, are making a commitment to the startup – you'll probably be giving it a month of your labour before you see a pay cheque. And you'll have given up other job opportunities to take this one, which will reflect on your judgement in your resume “So, Irv, I see your last 3 jobs have been for a month each, with companies that have all disappeared…”

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  • irv

    That's a very diplomatic rephrasing of the question. I like it. Being a technically oriented person myself sometimes I lack diplomacy. Thanks for the lesson.

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  • Niftyoptionstip

    hi ,

    i will surely apply your views while giving my interviews.

    thanks metrogyl

  • garydpdx

    Thanks, Ben! This is very much in line with past advice from Guy Kawasaki, two articles (one is an update, I would guess). There are about 5 common themes, and then additional ones from each of your articles.

    http://blog.guykawasaki.com/2006/03/nine_questi

    http://www.mint.com/blog/how-to/guy-kawasaki-st

  • garydpdx

    I have attended the Business Network Chicago (BNC) Venture Capital Group's First Tuesday meetings, organized by Len Bland of Concept Equities LLC, and never fail to be amazed at how so many of the pitching firms stumble on this question!!!

  • http://www.mycostumes.co.uk/ Ryan Dress

    They are great questions and applies to all businesses across all industries. I agree that #2 will definately be a shocker for most companies though.

  • http://www.a3logics.com Merry

    Really very-very informative post..i did never think about these type of question i will definitely share this post with my friends …Thanks!

  • http://www.linkedapplication.com Education Software

    Wow ! its really very knowledgeable post….keep going man!

  • Tompako Industries

    nice post thanks for sharing with us.

  • http://www.recruitinganimal.com RecruitingANIMAL

    Heads up. It's moronic for so many people to start blog postings the same way. 8 questions, 9 tips. etc.

    The numbers in these titles are totally irrelevant. For a little while was once a novel way to present things now it is totally banal and it doesn't help your SEO either.

  • http://www.recruitinganimal.com RecruitingANIMAL

    error

  • http://www.instigatorblog.com Benjamin Yoskovitz

    Certainly the question can be asked in a different way. “What's the runway on $0 revenue?” for example. But the point is the same — “When are we toast here?”

  • http://www.instigatorblog.com Benjamin Yoskovitz

    The quantifiable numbers in terms of time are important because most startups can't look much beyond that with any real certainty. Plus, it's really those first few months at a job that determine whether you'll stick around longer or not. So no point worrying about 2-5 years from now, let's see how the first 6 months will go!

  • http://www.instigatorblog.com Benjamin Yoskovitz

    Thanks for stopping by and commenting. I tend to think in more practical / execution terms for a lot of things…

  • http://www.instigatorblog.com Benjamin Yoskovitz

    The interviewer speaking more than the interviewee might not be good for the interviewer, who later realizes she didn't get all the information she wanted, but it's a good sign for the interviewee that the interviewer is comfortable with the person.

  • http://www.instigatorblog.com Benjamin Yoskovitz

    Interesting — talking to customers isn't something I had thought about. Definitely worth trying. I wonder if anyone else has tried this?

  • http://www.recruitinganimal.com RecruitingANIMAL

    @Boysko got his underwear in a tizzy over on Twitter because I criticized him.

    Well the guy is using the same stupid blog post title technique that every mindless hack has appropriated. And if I don't tell him who's going to? Nobody.

    He claims that his title tells you exactly what you get. But that's not so.

    This title tells you what you get.
    How to analyze a start up.

    This title tells you what you get
    How to evaluate a start up

    8 questions to ask a start up tells you that you have 8 questions.
    Is that so informative? No. But does everyone – including the most
    mindless copycat entitle their postings that way? You know the answer.
    Do you want to be like them and add to the pollution of online culture?

  • http://www.info-intel.com VizFact

    I totally agree. When I doing interviews I look for how many questions the applicants asks. Its very important to identify if we have a critical thinker or not.

    Myself, I always ask a ton of question sin interviews because I want to know how much money I can make long term. This is a very good article for those who are tryign to get an understanding of negotiation.

  • http://www.instigatorblog.com Benjamin Yoskovitz

    Definitely some valuable additions here to the questions you should ask. Since most startups do offer equity of some kind it's important to understand what that means and how it works.

  • http://www.kslights.com led street lights

    Thanks for the report. That is very cool and definitely sustainable.

Ben Yoskovitz
I'm VP Product at GoInstant.

I'm also a Founding Partner at Year One Labs, an early stage accelerator in Montreal. Previously I founded Standout Jobs (and sold it).

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