6 things you need to know before joining a NYC startup

While the idea of a startup job in NYC can seem sexy and progressive, it’s important that you uncover the facts before leaving your current career behind in pursuit of a new opportunity. Startups are a dime a dozen these days and you have to be able to decipher the promising ones from the ones that are destined for failure. 

 

Data shows that nine out of ten startups fail. That’s an incredibly sobering thought – and one that you need to carefully consider as you think about joining a startup. Why do 90 percent of startups fail? CB Insights has crunched the numbers for us and revealed that 42 percent of polled startups fail because of a lack of market need for their product.

 

That means thousands of startups launch each year without an accurate understanding of their target market. They’re so blinded by their product, service, or idea that they don’t take the time to study their target market’s pain points. As someone who is considering joining a startup, this should be your primary area of concern. Is there a market need for the product? Do sales numbers show traction? Is real-time data matching up with projections? You can figure some of this out on your own. Other times you’ll need to ask the startup for more information.

 

While a lack of market need is by far the most common reason for startup failure, there are plenty of other causes. These include a lack of working capital, having the wrong team, losing out to the competition, pricing issues, poor product design, flawed business model, and poor marketing. Keep these things in mind when studying startups and meeting with founders. If you see any of these red flags, proceed with caution. 

 

 

While you can tell a lot about a startup’s potential by looking at the product and the funding behind the venture, you also need to look at the founding team. Who are they, and what experience do they have? While every successful entrepreneur gets their start somewhere, it’s much more comforting to work with a founder who has shown signs of success in the past.

 

For each member of the founding team, do some research. Check their online profiles and run searches for their names. If you really want a clear picture of who they are, contact past employers or coworkers. However, it’s critical that you don’t judge people solely on their failures. Sometimes a business failure is more valuable in the long run than a business success. 

 

 

Before joining a startup, it’s wise to learn more about the financial picture. Has the company recently received a fresh round of funding? Are they drowning in debt? Is there hope that a new investor will infuse a significant amount of cash into the venture in the near future? Good startups fail every day because of a lack of capital. While it’s noble to judge a company based on the people and products they sell, it’s unwise to ignore the financial situation. 

 

 

Selfishly, you need to understand how you fit into the picture and how you’ll be compensated for your work. As you know, startups operate entirely different than established businesses. You’ll rarely find a startup job that offers you a full salary, benefits, and paid time off. Their job offers are much more creative and – from the hire’s point of view – risky.

 

Understanding that you’re more than likely going to take a pay cut when moving from a corporate job to a startup position, think about what it’s going to take to get you onboard. Typically, startups will offer something like promise of future payment or equity in the business. If you’ve done your homework and are confident in the business, equity is obviously more valuable than an upfront paycheck. Just make sure you get everything in writing before accepting a position that forces you to take a pay cut. 

 

 

If you’ve been in the corporate world for a number of years, the transition from that type of environment to a startup culture can be challenging. You’re going to have to get really comfortable with being uncomfortable. No more clocking in at 9 a.m., typing away on a keyboard in your secluded cubicle, and heading home at 5 p.m. Things change quickly within a startup and you’ll rarely find a groove, pattern, or routine. 

 

Before signing on with a startup, ask to spend a day tagging along. Find a seat and simply observe. How many hours are employees spending in the office? How do they interact? Do they have their own workspaces, or do they simply plop down wherever they find a spot? These may seem like small questions, but they’re pretty significant once you’re thrown in the mix. 

 

 

Some startups will take any and all help they can get, saying ‘yes’ to someone before they even consider what their role will be. You want to avoid these opportunities. Instead, hone in on startups that have a very specific and clear role for you. Before committing, you want to know exactly where you belong and why they want you. If they can’t provide you with this security, it may not be the right fit.