How to avoid joining a doomed startup

Startup CEOs lie (to themselves and to you). Run your own numbers.

👋Hi, it’s Greg and Taylor. Welcome to our newsletter on how to make high-stakes professional and personal decisions in your 30s.

Read time: 10 minutes

Working at a startup is full of risk – the biggest and most persistent of which is getting laid off. You should be compensated for that risk in at least one of two ways – personal growth or company growth. Preferably it’s both, but one will do if you’re really confident in it. 

The problem is, most people I interview don’t ask a single decent question to validate the potential for personal or company growth. 

They’re happy to buy the CEO and hiring team’s bullshit about mission, culture, and growth without asking for proof. They’re dedicating the next 2 to 5 years of their professional life to this startup, and have no idea how the company is really doing — or what they’ll be doing there — before they start.

Don’t make this mistake. If you accept the CEO’s pitch at face value, 90% of the time you’ll end up at a car crash instead of a rocket ship, and potentially waste several years of your working life.

Here are the questions every startup interviewee should be asking – and the answers that mean, “Run.” 

– Greg 

The (only) two reasons to join a startup 

Startups are organized chaos. Especially in the early stages, they’re companies that don’t know what they are yet. Working for one is difficult – few processes, endless amounts of work, and a rollercoaster of wins and disappointments (often in the same week). Plus, a layoff is always one bad quarter away.

If you don’t get personal growth or company growth out of it, you’re suffering for nothing.

Company growth = 50%+ revenue growth YoY

With company growth, you’re looking for companies growing 50% or more per year. These companies are accelerating, hiring, and making resources available for new projects. Companies that grow also have a much higher chance of exit via acquisition or IPO — which increases your likelihood of wealth creation.

If you’re choosing between two startups, and one is growing faster, take that job. Every CEO wants to hire candidates that have handled company growth – since they think their startup will also grow fast.

Personal growth = projects, not title 

Most people think of personal growth as a title change. If you want that, join a late-stage startup or established company. At an early stage startup, growth is about ownership of projects. 

Instead of thinking through the lens of an org chart, think through the lens of your Asana board. Know the projects you’ll own and how much freedom you’ll have to take risks.

Interview questions to determine company growth

1. What evidence do you have of product market fit? 

Why ask it: This is the single most important question you can ask. Unless you have a product that enough people will pay for, your company won’t grow. Many startups are still validating PMF, but you want signals that they’re competitive in at least one large customer segment. 

Good answer 🟢: They have strong indicators of product market fit, demonstrated through product usage, repeat customers, or NPS scores. They can get specific around their target customer. They’ve got at least 10 enterprise or 1,000 consumer unaffiliated customers (not their friends, family, or people recommended by investors). They can tell you their net dollar retention in the previous 12 months. And they’re clear on what parts of product market fit they haven’t figured out.

Bad answer ❌: They can’t give you much data, provide what seems like generic evidence, or they explicitly say, “We’re still figuring it out” with no real plan.

2. How much did the company grow last year, and what’s the forecast for this year? 

Why ask it: To get the answer – and to see how transparent the company is about their metrics. You can’t assess a company if you don’t know how they’re doing. So ask for their performance and forecast, explicitly. Expect a cogent answer from everyone you ask, not just the most senior interviewer.

Good answer 🟢: The company is growing 50%+ and can provide color to back up next year’s forecast. You get answers derived from data (not “we plan to accelerate growth”) and everyone on the team has a consistent understanding of the plan. 

Bad answer ❌: They won’t tell you, can’t get into specifics, or don’t seem to know. Unless you’re talking to a top-secret biotech company, they should be able to give you approximate figures. 

Note: A company that’s stalling (after experiencing previous growth) can sometimes offer great personal growth opportunities and future company growth. It’s not an immediate disqualifier, but it requires more diligence from you. Do they know why? What are they doing about it? How have they adjusted their forecast? And how will the role you’re interviewing for help find growth? Let’s be honest – our company, Section, stalled between 2022 and 2023 and is now growing again.

3. What’s your TAM (total addressable market), and what’s the math to get there?

Why ask it: To exit, venture-backed startups need big markets (or categories). You should believe this market is large, and understand how they define the opportunity. 

Good answer 🟢: If they’re operating in a large, existing market, look for a credible story about how they’ll disrupt current solutions and competitors. If they’re building a new market, you should understand (and believe) the assumptions they’re using to approximate the size of that new market and see evidence of an expanding need for their product. 

Bad answer ❌: You don’t buy their sizing of the market. Anyone can give you numbers that spell a big market. In the book Founder vs. Investor, successful entrepreneur Elizabeth Joy Zalman observes that on paper, the market for birthday candles could be $2.9 trillion (9B humans x 80 years (avg age) x $4.00/box). But that’s not the TAM for birthday candles.

4. Can I try the product? 

Why ask it: You want to know if you’re working on a real piece of shit before you join the company. Products are the lifeblood of a startup (more than brand, team, or anything else). You’re tying your personal success to the success of this product. You should experience the product and be impressed. 

Good answer 🟢: They give you access, and the product is good. This is obviously easier for a direct-to-consumer product and harder for enterprise – and especially “behind the scenes” software or services. But you should at least be able to get a demo.

Bad answer ❌: They won’t give you access – or they give you access, and you don’t believe in the product.

Interview questions to determine personal growth

5. Tell me about the three biggest projects your team has worked on in the last six months, and who led them

Why ask it: Growth at a startup is all about ownership. You want clear evidence that people on the team get end-to-end ownership of high-impact projects. The best way to grow quickly is to take on new projects or tasks you’ve never done before. So you need a company willing to let people learn on the job and assume responsibility early and fast.

Good answer 🟢: They cite big, ambitious projects, and there’s a range of tenures and titles among the people who led them. You’ll have to ask follow-up questions to get these answers (“when did Josie join the team?”). But you want to make sure there’s precedent to take risks on people. 

Bad answer ❌: Everyone leading big projects has been around forever or was on the founding team. 

6. What challenges have you not solved yet?

Why ask it: You want to work for a company that a) understands their challenges, b) has a lot of ambition and energy for solving them, and c) wants you to help solve some of them.

Good answer 🟢: Look for self-awareness (they know they have challenges) and ambition. These should be hard and specific challenges – like “We have one working enterprise go-to-market channel, but we need to find others that scale. We’re considering X, Y and Z tests.” 

Bad answer ❌: They can’t answer, or the challenges they cite aren’t relevant to the role you’re interviewing for. If they need to improve the product but you’re interviewing for sales, you won’t get experience solving tough challenges (and you won’t have much agency to change your fortunes).

Tip: How do you know if a challenge is an exciting opportunity or a red flag? It’s all about specificity. If the challenge is, “We need to find PMF,” that’s a red flag. If it’s more specific – “our product works with this small market, but we need to find channels to widen it” – that’s a problem you can work on.

7. Tell me about the process to propose a new project

Why ask it: You can only grow quickly at a company with an appetite for new initiatives. Look for evidence that the company encourages people at all levels to propose ideas, and has a process for assessing and greenlighting. 

Good answer 🟢: Look for adaptability and specificity. A good answer would be, “Our best ideas come from all levels in the business. To propose an idea, you need to do enough research to develop conviction and pull together a scrappy business case so we know the risks and potential ROI before greenlighting.”

Bad answer ❌: Two extremes here: “It’s an annual process at the end of Q4” (suggests a rigid process that’s hard for you to get into) or “Ideas come from anywhere” with no mention of the process (too vague).

Research to do on your own

If you only talk to the hiring team, it’s nearly impossible to develop your own conviction – unless you want to just drink their Kool-Aid. Do this additional research to complement what you learn in interviews.

1. Look at competitors in the category. Have other companies reached $20, $50, or $100 million? This gives you a sense of the company and category’s potential. 

2. Talk to 1-2 salespeople from the company, and find them yourself on LinkedIn. You can ask for a referral, but they’ll usually give you their best seller. You want to know their average rep’s experience selling the product. What resonates and what doesn’t?

3. Find someone who embodies the ideal customer profile (a friend or relative is fine), show them the product (or describe it), and ask about their level of interest or reservation. Would they buy it?

4. Look at the middle management layer (leads, directors, heads of). Do they all have the same background (all came from Google, all Ivy League, all ex-consultants, all white men). If so, do you fit? It’s hard to overcome a culture that rewards one type of person.

5. Read reviews – app store reviews for consumer products, TrustPilot and G2 for enterprise products, and Glassdoor for employee reviews.

Our advice

Bottom line: In the interview process, expect some irrational exuberance (delusion), since you need that to found or run a startup. But the CEO’s narrative has to be backed up, at least in part, with some data and feedback from the market. Your job is to find that data before deciding.

We know it’s a tough job market right now in startups – and if your primary goal is to land a decent job within a few weeks or months, you might not be able to optimize for personal or company growth. Do this analysis anyway. It’s a good muscle to develop, and you’ll use it again for the next job. 

But if you can, try to optimize for at least one of these growth vectors when looking for a new job. If you just spent three years working at a tough startup that didn’t make it, you might choose the rocket ship with a more limited role. If you have Stripe on your resume, you might gravitate toward a company that offers lots of responsibility, but is struggling to find growth. 

Or if you find yourself in a place where neither you nor the company is growing, then do something about it. Find more personal growth internally or start a job search.  

There’s no right answer. But as we say, do your math – not theirs.

To the next 10 years,
Taylor & Greg