(Originally posted on the True Ventures Blog)
So you want to work for a startup. You like the pitch, the founders seem cool – but is the startup going anywhere? What should you find out before jumping in?
Recently, when trying to convince a certain Mr G to join Vurve, I spent a lot of time explaining what milestones we had hit so far but, more importantly, explaining why these were important in the first place. I thought this knowledge would be useful to share with others looking to work for a startup!
Note that these milestones apply to most SaaS startups, but the principles apply broadly and incorporate current thinking on agile development, lean startups, etc. Also, this list is meant for employees, not founders, and, if you are looking to join one, remember that what follows is an example, not a prescription.
Now on to specifics. Try to find about your startup’s progress across a few different tracks:
• Product+Customer Track – building a product that customers like and are willing to pay for
• Hiring Track – building a kick-ass team
• Advisors & Investors Track – getting those who can guide you with advice and money on board
• Partnerships Track – finding design and distribution partnerships
• Operational Track – setting up a corporate entity, lawyers, accountants, benefits, etc
In my view, the Product+Customers Track is the most important to find out about. If your startup has built a product that customers like and are willing pay for, everything else will fall into place. Most of the energy of startup founders should go into driving this track forward.
Within the Product+Customers Track, let’s start with the following milestones:
1. Corporate vision defined
Do the founders have a clear vision that drives their thinking? The founders’ view of the world will drive each product iteration and every pivot and ultimately determine the startup’s success or failure, so look for a clarity of vision first and foremost. During tough times (and there will be many), this vision will serve to clarify the company’s purpose and help choose between hard choices.
2. Initial product focus defined
Do the founders have an initial hypothesis, an outline of a product, that they are trying to validate? This should be a reasonable, bite-size chunk of their larger vision. A diffuse focus makes for slower progress (as cash burns), but too narrow a focus means frequent recalibration. Good founders are able to balance a far-reaching vision with a short-term focus. However, if you are unable to reconcile what their vision is with what they are building now and the founders can’t explain how the current focus leads to the future vision, alarm bells should start ringing.
3. Potential customers interviewed
Have the founders personally interviewed at least 3 potential customers? The more customers they talk with, the clearer sense they will have of what to build. If there is a lot of product built out but not enough validation from potential customers, I would worry. Just like you need at least three use cases to build a robust API, you need a critical mass of similar customers to triangulate their pain points and to build a product to meet these.
4. First prototype built
Has a working prototype been built to test potential customers’ reactions? Even a somewhat fleshed out user experience with a faked back-end could be used for this purpose. While some founders like building a whole lotta product before pausing to pull things together, I am firmly in the end-to-end prototype camp; I think integrating early and often tends to expose conceptual and developmental holes.
5. Feedback from prototype incorporated
Was the prototype actually put in front of customers, and was feedback incorporated into the product ‘roadmap’? Often, early prototypes are created internally, dissected by the team itself, and learnings applied – without ever involving the eventual customer! This might work, but is a risky proposition, as the team might be living in an echo chamber. Ask what the team has learned from the most recent prototype exposed to customers!
I hope this is a good start. In my next post, I will cover the following milestones:
• First trial customer
• First planned iteration
• First paid customer
• First recurring customer
• 30% customer happiness milestone
• 70% customer happiness milestone
• Revenue break-even
What do you think? Feedback welcome in the comments below, or email us at firstname.lastname@example.org. If you are curious, yes, G did accept our offer and will join us very soon. Want to join us for the ride (and find out what we’re actually up to)? Email us at email@example.com!