My biggest career miss was saying No to Shopify two years before IPO. Back when Tobi was still the last interview. That was cool.
The money would've been nice, living in Ottawa would've sucked. But I regret all the things I didn't learn. Shopify is now famous for their engineering and that was a great opportunity in retrospect. But young Swiz needed to learn things the hard way. From first principles, banging his head against the wall.
That's how it goes.
Other than that I'm happy with my bets. Got into Silicon Valley, met my partner, stair-stepped my way to bigger and bigger problems, built a profitable business on the side. Worked out fine :)
In my book, Scaling Fast, I talk about how to evaluate startups you've joined to make sure you've made a good bet. Or evaluate if this is the bet you want to keep making. 👉 you look at the database and evaluate the hard numbers – are you growing? is it profitable? how soon?
A reader asked what about before you have access to the database? Another asked if I'd ever found my own startup again? The answer is similar.
What makes a good startup bet
You can't win every bet. Your goal is to be a little more right than wrong and keep playing. Cap your downside (salary), maximize your upside (equity).
Never join a company for no pay. Unless you're still a student or getting a spaghetti investment from your mom. I did this in college and learned a lot, but mom filled the fridge. Having done that created my first real career capital that I could then leverage into bigger opportunities (like a freelancing business).
Here's what I expect from a Good Idea today:
- problem I can't stop thinking about
- market we know how to reach
- market that's growing
- market that's big enough and worth chasing
- we must have an unfair edge
- evidence of early traction
Whether starting my own or joining a company, those are my pre-requisites.
Problem I can't stop thinking about
Once you hear or have an idea this is the main criteria. If you can't stop talking about the problem, keep ruminating on the possibilities, and it creates that little spark in your eye, then it's worth considering.
Never work on something that makes you feel tired just thinking about it. There's enough bullshit that comes with building a company. You don't need the core idea to make you sad.
Market we know how to reach
You can't make sales, if you can't reach the people. Early stage it's enough to have a roughly validated hunch. Later stage you're looking for a scalable lead generation machine.
Market that's growing
Growing markets are easier than shrinking markets. You can't beat the macro.
I talk in my book how my React teaching business grew so fast I felt like a genius, but realistically I barely kept up with the market – business was growing but market share was shrinking. When interest waned, so did my business.
Market that's big enough and worth chasing
Play games you want to win. Building a business is hard. You'll spend the next 5 to 10 years doing this.
Make sure the juice is worth the squeeze. Means different things for different people. For me, right now, just being self-employed is not worth it. I'd rather be a house-cat.
10+ years ago? Yeah any indie money felt awesome and amazing and like I'm achieving freedom. Now the bets need to be bigger :)
We must have an unfair edge
Join companies with an unfair advantage.
You're looking for some insight or special knowledge, unique access to the market, a new technique others don't think will work, unique access to capital or talent, something that gives you an edge. The competition is fierce and everyone works hard.
Evidence of early traction
You want evidence that this will work. At least attention. Customers paying hard money are the best.
Look for slope
Before joining a company I like to check their Crunchbase and other online profiles. How fast are they growing? Have they recently stumbled? What about pivots?
Backchannel reference checks are best. Ask friends-of-friends who work there what it's like. How's the vibe? Did people seem excited in their interviews or is everyone kinda tired and over it? Ask what they're looking forward to.
Employee count is the hardest external metric. You can't hire people if you're not paying them. Do their linkedin profiles look high quality and you're excited to work with these folk, or is everyone kinda mid?
The second best external metric are fundraising rounds. How do those look? Getting bigger with better investors? Raised too much and gonna be hard to justify? Too little and won't have the fuel? A lot of signal if you look carefully. Gotta understand the market forces to evaluate. (don't go into markets you don't understand at all)
You're looking for a place to spend the next 4+ years of your life. Choose well and make good bets.
Cheers,
~Swizec
Continue reading about Place good startup bets
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