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5 Signs To Join A Startup

I’ve been at this company for 20 plus years now, and I’m tired of the same old processes, small raises, being just a number, etc. You’ve been considering to join a startup to make more of an impact, and grow quicker in your career, along with hoping that the equity play vs higher salary will pay off. Sound familiar? Or you just got out of college, and your friends are convincing you to join a startup. You’re told it’s the fastest and quickest path to financial success. So, now you are considering to join a startup, all of which is very common in Silicon Valley.

In the first case, these individuals are just tired of the big company BS, getting very little in return for what they felt they were putting into it. Politics grew out of control, others being promoted, and it was getting old, so it was finally time for a change. So after talking to many others, they’re convinced that they want to try a startup. With the second case, the individual is young, ambitious, and has come to Silicon Valley to go to college, or from college and try to ‘make it big’ immediately by joining a startup. Many of their friends have done this and done well, yet others have not. But the determination to make it big, plays large with these individuals and startups are the only way to make the ‘big’ money with generous stock options and equity plans.

There are many other reasons to join a startup, but these are two prime examples for extremely different reasons. However, every startup is different, so when considering to join a small, innovated startup, here are 5 signs that can signal that the startup may be successful, assuming that’s the goal of every person who joins one.

1. Value Proposition

The fundamental foundation of any startup is the ‘value proposition’. The value proposition is the ability to take the idea or product of the startup and show how it will create market value that will equate to strong market growth, leading to solid sells and strong, continually growing revenue. It’s that simple. The value proposition should be able explainable in one sentence. If the value proposition is clear, understandable, and can be digested by anyone who will then ‘get it’, immediately, then this is a good sign. The startup is on to something very good. While the value proposition doesn’t book, ship and collect products and revenue. It does tells you that there is a market, where the startup sits in this market (against competition), and the probability of pending success.

2. Solid Customer Traction

Once the value proposition is thoroughly verified, backed and funded, then it must be executed to the appropriate right product(s)t, that will build a credible ‘customer’ base. Gaining just 4-5 top-notch, credible customers will expand the company’s brand and reputation with product differentiation, thus, addressing the validation, industry reliability, use cases, etc. necessary to achieve initial growth that will expand into more repetitive customers, leading to Q-Q, linear growth. If you know in advance that you have customers who are willing to pay the price you are asking for the product or service you have, the startup has overcome a huge obstacle that many run into. Too many good startups fail to sufficiently validate their customer assumptions, or try to scale too quickly before validating the initial marketplace and streamlining their costs. A successful startup scales its growth on the basis of proven, steady and paying customers; basic book, ship, collect (especially where residual/subscription income is involved). Steady acquisition is also a very good sign, as opposed to high and low fits and starts.

3. Short & Long-Term Strategic Initiatives

As with any P&L whether it’s a startup, a big company or a division within a bigger company, or just a small business, thinking long-term about strategic growth and the path it will take to achieve this success is the direct opposite of a company that is operating in panic mode, or exhibiting survival thinking. A successful startup will have a one-year and a five-year agenda; two separate plans. Getting though the first year is the hardest part of a startup, but if the company is making steady and measurable strides to meet the critical milestones, then it is poised to grow in their later years. Having a solid one-year plan that was executed and holding strong, will carry the startup into a longer-term, five-year growth curve through solid strategic thinking and initiatives. Startups thinking and executing this way bodes well for the future.

4. Cash Conservation

One of the biggest things that I learned when I left Silicon Graphics, at it’s prime, to join a startup was the way cash was handled. No more of the business class flights, generous budgets, fancy business cards, golf outings, etc. This was really tough at first, but it thoroughly educated me with how successful startups manage cash vs unsuccessful ones though my years of doing startups. For startups, cash is king. The rewards for many are stock options or equity, cooler cultures, faster-paced, voices-being-heard, etc., but the budgets are tight in all successful ones. Air travel is economy class, staying in average hotels, and either very tight or non-existent entertainment budgets. Sounds unpleasant doesn’t it? But, what most don’t see is that the startup budgets are being managed appropriately for the period that it’s in. As the company grows and expands, then the budget will be ready for this, and this shows that it’s successful. With this success, the rewards of joining a startup will pay dividends! At some point, in this successful journey, the startup will ‘cross the chasm’ that allows for more of what you left at the ‘bigger’ company. But, if a young startup is spending money at will, traveling business class, hiring at random, etc., then it’s not being managed for long-term success.

5. Leadership & Communication

As words of wisdom from Alan Hall once said, “every great leader and every great company communicates well” For a startup this is even more true! They communicate good news. They communicate bad news, with candor and straightforward language, as well. They communicate with skill; imagine the frustration of the investor who knows he or she has invested in a great company, but due to lack of communication, the world may never know. No great company was ever conceived and grown in a vacuum. Every successful company recognizes the vital need and the tremendous opportunity they afford themselves when they communicate well. Successful startups share information, which increases employee engagement, morale, and loyalty, while amplifying your own individual reach and effectiveness.

These are five good signs to sense that a startup is on the right track to success. So, if you’re really thinking about a startup but are having reservations, look for the above signs, but at the end of day, do something you are passionate about, do something you love. If you are doing something you are passionate about, you are just naturally going to succeed, and a lot of other things will happen that you don’t need to worry about. There are so many opportunities and choices that anyone can make about what they do. Do something you are passionate about. Life is too short.

Steve Dalton

Steve Dalton is the founder, President & CEO of Linear Growth Consulting, LLC (LGC). LGC is composed of extremely high qualified, experienced, industry-proven, high-tech executives and personnel with hundreds of man-years of successful results with real-world understandings of how today’s companies need to be fast and nimble with premier execution models that encourages creative entrepreneurial management necessary to compete in today’s markets. To solve these very common executive management breakdowns, there is no better way to understand them than by dealing with them in real time. The partners and consultants at LGC are industry, hands-on executives with proven track records of driving and delivering disruptive solutions in Engineering, IT, Marketing, Sales, Operations, and Customer Service infrastructures. We all exhibit strong leadership, sustained innovation, focused execution, and a sound understanding of market requirements/shifts in defining technical strategy, building & releasing products ground up, and working with the field to drive major customer wins. LGC strives for strong communication skills to be adopted as this has shown to be one of the biggest reasons for a lack of management deficiencies. Moreover, building the revenue is one of the toughest aspects of successful companies, and LGC has all the experience, know-how, and methods to accomplish the toughest challenges that some companies may be facing in this area. Since his ‘learn-by-doing’ undergraduate education at Cal Poly, Steve Dalton has been taking this approach throughout his 30-plus years in the competitive, high-tech market of Silicon Valley. That is a skill within itself and can be done only by having ‘done it yourself.’

Learn more by talking with key executives at Linear Growth Consulting, LLC
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