How to Choose the Right Startup

I spend the majority of my day speaking with software engineers. This can vary from the person recently out of school to the engineer with 20+ years of experience. The people I talk to and get to know, come from all types of backgrounds and are at different places in their lives. Some have few commitments aside from rent and food, some have families and own homes. In the San Francisco Bay Area, these commitments take on acute importance.

When speaking with people about their career motivations one overriding message comes through – they crave fast-paced learning, they want to create meaningful products and be recognized for building something impactful. When I ask, “what gets you out of bed each day,” what is often described back to me sounds like life in a start-up company.

Then the conversation turns to, “how do you pick the right start-up?” Let’s face it, it’s confusing. While most would agree they prefer the work at a start-up, they also want to make good career choices – that is, companies that will thrive and deliver on the initial promise. People are willing to give a start-up company their all, but also want to be rewarded. We all want to make good career choices.

Many, for lack of an ability to identify the right start-ups, default to joining a big company. They are big, they are safe, they look good on a resume, the parents and spouse are happy, but in most cases that yearning desire to create, build and to be impactful is not satisfied. People I have grown to know, end up as a cog in the machine always wondering, “what if?”

…and there is risk in start-ups. We all know this. Nobody wants a career of moving from a failed start-up to a failed start-up. So how do we identify these great companies to be? How do we cut through the morass? There are 1000s of technology start-ups to choose from. How do we identify the handful that display early signs of being the next great company? In a sense, it is much like finding the ideal husband or wife. If we look beyond the initial emotion, there are sometimes subtle and often not-so-subtle signals which tell a compelling story.

The good news is that there are signals. I’ve spent my entire career looking for these signals. Each time I decide to work with a company, I go through the same process an engineer should when they evaluate companies. While there are no guarantees, great start-ups that have grown into great companies, for the long-term, share many of these early characteristics. Here is what I have found they have in common:

1. A market
2. Unique competitive advantages
3. Proven founders
4. Shrewd investors
5. Excellent and senior-level early engineering teams
6. The ability to attract top engineers post Series-B
7. The ability to attract top executives after Series-B
8. The ability to attract great salespeople
9. The ability to execute thus far

I will be expanding on each of these 9 signals in subsequent articles. Stay tuned!