This article was originally published by Built In on September 6, 2022.
Is that exciting new opportunity too good to pass up — or too good to be true?
As a partner at SPMB, one of the largest retained executive search firms focused on the technology sector, I’ve worked with countless candidates at growth-stage tech startups during their job search over the course of my career. Because of these relationships, I have first-hand knowledge of why leaders leave companies — and if they are leaving soon after their arrival, the questions they wish they would have asked during the interview process to avoid joining in the first place.
The biggest motivators for candidates to leave their startup are broken into three categories of concern:
3 Biggest Motivators for Candidates to Leave Their Startup
- Product and technology
- Financial health of the business
To dig into these core issues, I recommend asking pointed questions early on in the interview process. Here are eight of them you should think about asking.
→ PEOPLE ISSUES
The number one reason people change companies is people issues! These problems range from the culture being toxic, high turnover, and/or significant leadership changeover. It can be challenging to evaluate culture with just a few meetings/discussions. While running through the interview process, beyond purely gauging your rapport with the hiring committee, I suggest assessing the company’s historical investment in and success of employees by asking these questions:
3 Interview Questions to Ask to Uncover People Issues at a Startup
- Why is the position available?
- What’s the employee and leadership retention like?
- What professional development resources are available?
Why Is the Position Available?
This question will uncover whether this is a growth position or a backfill. If it’s a backfill, you’ll want to uncover the reasons for that person’s departure. Were they set up for success? Did they dislike the culture? You don’t want to end up with the same fate if the challenges they faced haven’t changed.
What’s the Employee and Leadership Retention Like?
Companies, especially fast-growing startups, need a healthy amount of turnover. With that said, having high retention and a stable leadership team are two strong indicators of a healthy work environment. If the turnover is high, try to connect with a recently departed employee to figure out what went wrong and why they left.
What Professional Development Resources Are Available?
Whether you are a seasoned executive or early in your career, you should evaluate a prospective company on whether they invest in their employees and culture. There are a number of ways to frame this question, including: What does the HR department look like? Are there training and development resources for the whole team? Does HR measure employee engagement?
As a leader, you’ll want to confirm that you can support your team and their development, and as a new addition to the workforce, you’ll want to learn whether you can grow and learn in that work environment.
Happy employees = happy customers = a thriving company.
→ PRODUCT & TECHNOLOGY ISSUES
Another serious motivator for employees to exit their company is that there are major product/technical issues that prevent them from doing their job. When companies aren’t transparent in the interview process about the state of the technology, it can be difficult to judge what you’re really getting into. All tech companies have some degree of technical challenges — but as a future employee, you want to enter into a business knowing that the product works, especially if you’re not a technical leader that can improve that core area of the business. I recommend getting as comfortable with the product as possible before joining by asking these questions in the interview process.
2 Interview Questions to Ask to Identify Product and Tech Issues at a Startup
- Can I see a product demo as part of the interview process?
- And/or can I speak with someone from the technical team as part of the interview process?
Can I See a Product Demo as Part of the Interview Process?
You’ll want to see the product in action first hand whether that’s through an online website demo, or by requesting a demo during the interview process.
And/or Can I Speak With Someone From the Technical Team as Part of the Interview Process?
Hopefully, someone from the actual technical team will give you an honest perspective on the state of the technology and the work that needs to be done. Adding this additional step in the process will only benefit you by giving you peace of mind and greater insight into the lifeblood of the business.
→ FINANCIAL HEALTH ISSUES
The third significant cause for employees of all levels to leave or be fired from their job is if the startup has financial struggles. The timing of joining the business is important to be aware of and you’d ideally join after a recent fundraising round, but that isn’t always possible. To mitigate risk, you’ll need to evaluate the leadership team’s abilities to fundraise and manage cash flow. Some probing questions to expose these details include:
3 Questions to Ask to Identify Financial Health Issues at a Startup
- How much runway does the company have before needing another fundraising round?
- How strong is the executive team/CEO at fundraising?
- Where is the revenue coming from and from how many customers?
How Much Runway Does the Company Have Before Needing Another Fundraising Round?
You can easily find out the most recent fundraising round online or through the recruiter that you’re working with, but knowing the burn rate vs. revenue growth will enable you to assess the true health of the business and better gauge your risk coming in at a certain time in the growth cycle. If the business is close to needing another funding round, I would ask the following two questions for sure.
How Strong Is the Executive Team/CEO at Fundraising?
There’s less risk joining a company with a seasoned founder, but regardless of the founders’ backgrounds, if they have strong relationships with the venture community, the company will have more safety nets if things go awry.
Where Is the Revenue Coming From and From How Many Customers?
Long term growth and success of a SaaS business is not just about winning deals but winning the right deals across a diversified group of customers and then keeping those customers happy and accounts growing. You should also ask: How does that compare to the valuation? What’s the net dollar, gross dollar, and logo retention like? These questions will highlight the strength of the growth and areas for improvement.
My role as an executive recruiter and corporate matchmaker is to facilitate long-lasting and mutually beneficial relationships between executives and businesses. Because of this, I ask my clients to give time for candidates to ask questions and also to cater the interview process based on their needs. At the same time, I coach my candidates to ask the tough questions upfront in the interview process because a mis-hire is detrimental to all parties involved. Using these probing questions will allow you to better understand the risks and benefits of different job opportunities and hopefully allow you to find a long-term home at your next startup.