7 Signs Your Company is Doing it Right: A Guide to Working at Startups
Originally posted on Medium.
These are interesting times for tech. Facebook, long fallen from grace, has been blamed for everything from #trumpgate to data breaches to millennials’ chronic FOMO. Amazon, once a shining beacon in tech, was dragged for their unsafe working conditions during the COVID-19 pandemic, with one former VP publicly calling the company “chickenshit”. Elon Musk has seemingly abandoned science to join libertarian protestors in demanding freedom from government-mandated pandemic policies resulting in Tesla’s stock price briefly plummeting. Adam Newman, backed by overseas billions and exuberance brought down WeWork’s IPO bubble and his own personality cult in one fell swoop (although it’s debatable whether renting office space to startups ever warranted a “tech” valuation in the first place). Never before have tech, politics, and people been so intertwined that entire elections can be hijacked by algorithms, or that demand for entire industries can be driven up by do-nothing celebrities posting pictures of diet tea and promoting girdles.
Like all the best inventions, tech takes on the issues we didn’t even know we had. That fierce entrepreneurial spirit sprouts thousands of new startups annually and will continue to do so as we adapt to the post-pandemic world to come. Everyone these days is a co-founder peddling their next billion-dollar idea. VCs have poured an insane amount of cash into companies run by inexperienced founders with a thirst for raising capital and joining the unicorn club. These companies lure the best and brightest, throwing around buzzwords like “culture,” “DNA,” “work-life balance,” and “employee engagement.” They hold weekly happy hours to ensure Angela from Product and Jose from Engineering can finally put aside that spat, enjoy ridiculously expensive cocktails, and work on more cohesion amongst teams. (Eng and Product, am I right?)
So, if you find yourself at or interviewing for one of these companies, how do you know whether any of it is real? By real, I mean a company that truly understands that its success is contingent on its people, a company that invests in your long-term professional growth, is building an actual solution to an actual problem, and ensures that its people are as much of a priority as its product.
I’ve worked in enough startups at various phases (from Series A to exit) to know the signs of a company that’s doing it right. I can tell from a mile away the difference between a company that sells you fluff (like a made-up job title) and a company that actually invests in its team members. Below is my list of 7 things startups do right to ensure that those same buzzwords are not hollow, but hold weight and significance even in a world that moves quicker than your cliff vesting.
1. They’re not perfect and they know it
In 2018, tens of thousands of Googlers walked out in protest of their employer’s handling of sexual harassment claims, amongst other things. Google, in defense of its reputation for a utopian employee experience, went to work to undo some of its most archaic processes like forced arbitration. The company owned its mistakes and is slowly working toward rectifying the cracks in its facade (and I’m not talking about their last three chat apps…). Startups are even more likely to make mistakes than an established company like Google. Pressure from VCs to generate revenue and/or users, raising capital, the rush to hire co-founders or talent, and a lack of solid processes and protocols all contribute to a messy cocktail of trial and error. All companies make mistakes, whether it be in their spending, hiring, or product. Instead of brushing all of their blunders under a rug, successful founders will acknowledge these mistakes, often publicly, and take strides toward actionable change. When going through interview rounds, I do the usual research. When red flags arise, which is not uncommon in startups, I directly address these. I’m less concerned with slip-ups and more interested in listening to solutions.
2. They have a parental leave policy
The U.S. is the only “developed” country in the world that doesn’t mandate employers offer paid leave to new mothers. The Family and Medical Leave Act (FMLA) only requires employers to offer unpaid leave to employees who’ve worked with the company for at least 1 year — emphasis on unpaid! Wait, there’s more; FMLA only applies to companies that have 50 employees within 75 miles. Most early-stage startups are nowhere near that. Furthermore, a lot of startups hire contractors or employees abroad to keep overhead costs low, so it’s likely that FMLA doesn’t pertain to most early-stage startups. Companies that provide these benefits without being required to by law are golden in my view. Yes, snacks, happy hours, and cold brew on tap are cool, but if your company pays for your Friday lunch, but doesn’t pay you for essential parental leave, they’re selling you fluff. Companies that don’t offer paid leave are telling you they’re not invested in the long-term growth of employees and are shortsighted in their strategic efforts and operations.
3. They hire leaders vs. managers
I’m sure you have read articles contrasting leaders and managers, and I’m not simply talking about titles. Anyone can be a leader within their org. “Managers” — or people who tend to focus on managing rather than leading — often have a top-down, hierarchical, low-freedom approach. “Leaders” operate under a high-freedom method, in which employees are given great latitude and ownership over their work, with guidance and mentorship. Every functional and successful company has managers, but leaders are harder to come by. These are people that are the owners of the productivity of their department and the people they lead. They mold and shape the careers of individuals from interns to VPs. For some reason, most people believe that if their teams are meeting KPIs, that alone entails good leadership. Or, they cling to the misconception that if someone is a stellar individual contributor, they’re good leadership material too. I disagree. Leaders should clear roadblocks and inspire their teams, help their direct reports develop skills, and provide ownership, autonomy, and accountability. In short, generating all that revenue in Q1 won’t mean much in the long run if you haven’t grown through the guidance of thoughtful and servant leadership. When interviewing at startups, ask co-founders and hiring managers what types of leadership development programs they’ve successfully run or what qualities they look for when hiring for their leadership team. Like the old saying goes, “people don’t leave companies, they leave their managers” so if they’re not investing in building strong leaders, they’re unlikely to invest in you.
4. They don’t have inflated titles
The standard cliché in tech is for founders to be college dropouts, start a company with zero real-world professional experience, and then get millions of dollars in funding to oversee a company of hundreds of employees. It’s almost like there’s a mold for this… Mark Zuckerberg did it and so can we! Let me be clear, I’m not being judgemental; this is the true nature of the aforementioned entrepreneurial spirit. However, when you have founders that have just hired their executive team and it’s composed of Mike and Ted they knew way back when in Long Island: run. Good founders, and therefore successful startups, will hire pros, not their bros. Before applying for any role, I take a look at Linkedin and go straight to all the C and VP profiles. If their COO was an intern at the company 2 years ago, red flag. If their VP of Product is the brother of the founder, red flag. If their Managing Director delivered pizza before joining the team, cheese-laden red flag.
Successful founders focus their efforts on the success of their company, not the success of their buds. Founders may not always know this, but when they try to uplift their friends and family by giving them jobs with high salaries and inflated titles they did nothing to earn, they’re not just skewing the market, they’re putting the reins of their company in the hands of highly inexperienced and often immature people, only to scare away the actual talent they will need to retain down the line. Take it from me, coming into a startup with a flashy title (one that doesn’t actually reflect your experience) might seem like a win at the time, but it can ultimately be a liability for your career.
5. They invest in HR leadership, early.
This may sound self-serving, but hear me out. Many founders have lamented they didn’t bring HR in early enough, leading them to band-aid fixes for their toxic work culture, lack of diversity, and double-digit attrition. It’s a common misconception that HR is simply there for payroll, benefits, and recruiting efforts (or birthday parties), and can, therefore, be outsourced to the Accounting or Admin teams. But in reality, HR leadership provides a spectrum of solutions to the problems that all growing companies experience in their teething phases. Growing and established startups can find it difficult to graduate from bootstrapping mode, and struggle under the belief that HR weighs the company down with policy and process. To which I say, they’re not being strategic enough.
Encouragingly, I have noticed a trend in the last few years of early-stage startups making an effort to bring on HR leadership or even recruiting for C-level staff with HR experience. Ultimately, we are working for and paid by the company to ensure they limit their liability and risk exposure. But we are equally working toward positive and comprehensive employee experiences. These two goals are not mutually exclusive and HR has the responsibility of driving successful and sustainable outcomes on both fronts.
6. They understand the impacts of who they hire and fire. Or don’t fire.
This should be an easy one, right? The truth is, with the constant pressure from the board of directors to scale rapidly, while preserving runway, startups are often making terrible hires, and compromising on talent over compensation. “Let’s just get this one completely unqualified person in now, and we can hire their lead in a few years.”
Remember when I mentioned HR leadership? Well, that’s one way to help identify stellar or poor performers. Without core HR processes in place, hiring, promoting, and firing can boil down to arbitrary decisions made by inexperienced managers because “hey, he’s a good culture fit” or “she has an attitude.” (Ladies, am I right?).
The most egregious version of this results in startups keeping underperforming and toxic employees on payroll way longer than they should. I’m not talking about the dude who’s never on time to meetings, or the one employee who doesn’t respond on Slack, ever. I’m talking about people who are unfit to work with other humans, or are inexperienced for their roles, but are kept around for reasons no one understands. Startups have a move-fast mentality, but that shouldn’t come at the cost of your team. Hire and promote the right people, and get rid of that person you hired to head up your marketing team who can’t seem to gel with anyone because he wants to “disrupt” the industry. If you consider everyone to be a stakeholder, you’re not doing justice to your company, its employees, or its board by holding onto talent that’s eroding your culture, one employee at a time.
7. They don’t offer equity to substitute for low(er) pay
This is a tricky one to navigate. How does one negotiate their compensation when the company is offering loads of equity but decreased pay? You want to be invested in the long-term growth and success of the company, but you also need to pay your bills. Don’t get me wrong, equity grants are part of your overall comp, but startups that aggressively negotiate for below-market base pay in exchange for share grants are short-changing their employees. New companies fail all the time; they run out of money, they have PR nightmares, they drastically downsize to conserve cash, and they often do this without warning. Asking employees to invest in your company by taking a pay cut for a reward that is abstract and so far into the future is unfair, and, quite frankly, unethical. If you really want your employees to be stakeholders, pay them what they’re worth, and they’ll work damned hard to ensure their grants are worth something in a few years.
What if I already took a job (or am interviewing) at the company you’re talking about?
Don’t despair: for all the downsides, everyone should experience a job at an imperfect startup once. These jobs allow you to think outside the box (often about your own struggles), to understand the value of a paycheck to you personally, and to learn what you don’t want for your professional journey. However, having a shitty job and working for a shitty company are completely different things. Keep in mind the red flags and positive signs I’ve mentioned above, and then use your judgement to determine how long your tenure at this particular company should last.
It’s also easy to forget that startups are responsible for a lot of the good happening in the world. Thanks to record-speed global communication, movements like #MeToo and #TimesUp gained traction virtually overnight, shedding some much-needed light on the struggles of women. Startups like Doordash, Postmates, and Mercato are leading efforts during the pandemic in delivering food and groceries for millions of people. Nextdoor, a local social networking service, is allowing for greater community integration in which its users share information, goods, and services directly on the platform. Working for a startup can be amazing and rewarding. These companies cater to a generation of people whose habit loops are short-term and often erratic. They create entire new marketplaces and can know in an instant whether they are meeting user needs. Often in contrast to big tech, startups are able to move quickly to iterate and deliver. This is why startups are running laps around big tech companies, which are often mired in bureaucratic processes, and overtaking chunks of their market share. This is why tech gurus leave the comforts of big tech companies and come work for startups. These experiences are exciting, worthy of the buzz, and when done right, massively successful.