Interviewing the Employer

maanantaina, maaliskuuta 10, 2008

I often read blogs that have tips for interviewing candidates. I’m always looking for questions that may give me some real deep insight as to what the person is like to work with. It is also important to ask a potential employer about life at the company but I see only a few blogs about the subject. Today I’m writing a little about what to ask the startup type company to see if it is a good company for you to work at.
Take a look at the article “Startups Must Hire the Right People and Watch Every Penny. Or Fail.” and “How to save money running a startup.” Item 11 in the latter article is the most important thing to pay attention to. Then read the comments and see how many people agree with his sentiments. The specific item is that an employer should fire employees that don’t love their work or aren’t committed enough. Now, in all fairness, this was his attempt at clarification but it really doesn’t make things better.
The need for interviewing your employer is growing more critical as beliefs like these continue to gain traction. There is a world of entrepreneurs out there that would work 24/7 and they expect you to be just as committed as they are. Commitment comes in different flavors, some entrepreneurs want you just to focus, be enthusiastic, creative, happy and bring your “A” game every day. Others expect commitment in the form of hours: the more you work, the more committed you are.
Most tech entrepreneurs in major hubs like Boston, the valley, Seattle, Chicago, etc have to work incredibly long hours because there are countless meetings and presentations to make to customers, investors and the industry community at large. The last group is really important because it leads to introductions to even more customers, investors and a wider audience of the industry community. It gets very exhausting and the pace never lets up. The key point to understand is that every aspect of your entrepreneurial life revolves around work and it seeps into every interaction outside of work too.
Some entrepreneurs believe that they are not asking any more of their staff then what he is willing to do himself. This is a scary statement because the entrepreneur is probably working upwards of 70 hours a week anyway. A developer can work that many hours, but we usually see the results in the form of frantic and badly written code leading to a worse release. When a developer complains about a 60 hour week the entrepreneur sees it as a lack of commitment though.
Not all entrepreneurs are like this. Many are really great people that inspire a real sense of camaraderie and excellence. They work hard, are honest and they make sure that their staff is happy too. They may need somewhat long hours, but the work is actually rewarding. Further, some of these guys want to help you along later so that you can build your own company in the future.
Figuring out which entrepreneur you are interviewing for is not exactly easy or precise. You may not be able to find out who you are dealing with until the offer comes in either. You can find out a lot though from the staff during the interview. The following is a short list of questions I generally try to ask each of the interviewers.
1. What time do people generally get in?
It’s good to know if you are working with early risers or a company with specific start of day times. Some companies have very flexible schedules with core hours. Some startups actually run a 9-6 shop in terrible commuter locations.
2. What would you say your daily routine is like?
You could find out that the team likes to grab a coffee at the starbucks around the corner and go over the plans for the day. You could also find out that everyone reports to their desk and reads emails quietly.
3. What is the release schedule like?
Is it a web service that goes through weekly or monthly releases? Is it every 6 months? A year? 2 years? The shorter the window the more you generally have to do. Different project management, QA and development strategies are used for different intervals and kinds of applications.
4. What is your project management style: waterfall, agile or something else?
You know which of these you like and are willing to try.
5. Where do you live?
This sounds really odd, but how far everyone is driving matters. Does everyone live in town while you are going to have to drive an hour? It changes the amount of time you can spend at work and with your colleagues outside. You may find yourself at a place that expects you to work really long hours and then you have a long commute to face while everyone else is close by. They may not understand that you just can’t work the really long hours because of the commute. Another factor is the after hours commitment. Some companies have an active social life and a long commute may make it difficult to join in.
6. Where do people go for lunch?
What you are trying to find out is if people go out for lunch as a group. If you aren’t making much money but everyone goes out then you may have to go out to be accepted in the group. That could be really expensive. It could also be that everyone brings lunch from home and eats at their desk. It could also be that people don’t go out as a group ever.
At some point be sure to get a cup of water or coffee and visit the restroom. This sounds kind of odd, but you really need to see how these people live. You should see if they have an open-office plan and if everyone is silent or talking. Is the “kitchen” a nasty pit or really clean and the same for the bathroom.
These last items may not make sense and may sound dumb. Open-office plans can be noisy or silent except for the clicking of keys. Noisy places mean people are talking to each other while a quiet office can mean that there is nothing to say or everyone knows what needs to be done. A silent office can also mean that people are messaging each other instead of talking. One style or the other does not make it a bad place to work, but you need to sort of know whether you like quiet or noisy places. You also have to be sure that you can live with the total lack of privacy.
A kitchen and a bathroom tells you what the people are like and if there is a cleaning service. I personally like being someplace clean. It matters, I’m a germaphobe. Let’s say that you see an adequate kitchen with the usual things except for tables. Where do people eat? Do people hang out together during lunch?
You usually don’t have a lot of time to ask all of the questions from each interviewer but be sure to ask at least one common question from each interviewer. It’s important to hear similar answers from each person in regard to the life style of the company. A manager will always try to sell the company, but an engineer may be far more straightforward in his answers. Take some time to think about the mosaic of answers to each of the questions after the interview.
There are no right or wrong answers to the above questions. You may really like a frenetic or a silent workplace. You won’t know about the place until you ask.
The most important person to interview is a senior manager or a founder. You will almost certainly interview with a founder in a startup. The company is small and they are into pretty much everything. This is great because they set the pace of the company. You want to talk to him about everything you can and really know this person. The one thing about them that is certain is that you won’t change the kind of person they are no matter how important you may become. A crazy leader stays a crazy leader for awhile. Its whether he is your kind of crazy.
The compensation conversation is the one to listen to the most. Any discussion about stock options must include the size of the share pool. Founders may know the number off the top of their head. The reason they know the number is that they have a huge portion of the shares and they can calculate their wealth almost instantly in the event of a buyout.
Knowing the share pool size lets you determine whether it is a meaningful number of shares. Let’s say you go to a startup and they make you an offer of 10,000 shares on an unknown pool size. You may want to make a $1MM off the deal in the event of a buyout. That means that your shares have to be worth at least $100 per share to get you to a million. Now, what does the company have to be bought for to get you that money. The pool size helps to tell you that. 10,000 shares of a company with 40MM shares means that the company has to be bought out for at least $4 billion in order for you to get $1MM. Good luck.
There are a bunch of terms like ratchets and multipliers that factor into the valuation of options too. The discussion on these topics is incredibly long, but they are mechanisms to ensure that the investors get a decent return on the investment and risk they are taking. Basically, the investors get paid first and at a premium and you get your share of the remainder. That could mean that the investors take an additional $20MM or more off the top of the deal.
Don’t get me wrong, I love options. Just be sure you understand how much you are getting and set your expectations appropriately. If someone interviewing you says we’re all going to be rich, but sure that “we” means that you have a large number of options too.
Everything I am writing here is about trying to collect information about whether a company is a good pick. Some small companies claim to be startups even though they are pulling in $5MM in revenue and running a 15% profit for the past 5 years. It’s very sexy to be a startup and some startups are similar to a 53 year old woman claiming to be 39. They aren’t a startup but they want to be so badly that they take on the startup-lifestyle.
The issue is that small companies have usually already gone through rounds of investment so the share pool is very large. You have to examine the offer package carefully to see if the commitment necessary for the small company is worth the overall effort when compared to the offer from a real startup. Real startups option packages are often more valuable because the number of shares in the pool is very small. The effect is that you can evaluate if the time you will have to put in is worth the final reward.
No matter which company you ultimately decide to work for, be sure that you have done the due diligence and selected a company that you are going to look forward to going to every day. And if that doesn’t work then find a job that you can tolerate. And if that doesn’t work then you probably are better off where you are right now. But no matter what you choose, be sure to find out what you are committing to and who you’ll be working for.

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