In a recent report, in 2020, there were more than 1,000 Finance Technology or Fintech companies in Singapore hiring more than 10,000 people and the numbers are growing.
In fact, the market anticipates a massive hiring spree in this area and there are also many SkillsFuture Grants for Professional Conversion and Training in this space, with the SGUnited Skills initiative that pays Trainees up to S$1500/mth just to be upgraded!
But before you quit your day job and sign up with that exciting Company that just called, What are the 5 Things you should consider before quitting to join a startup? Let me share some ideas with you.
1. Are you ready for it?
Startups are renowned for their frenetic pace of work and often entails long and arduous hours at the office, and also at home.
“I’ve never worked so hard before in my life, not even in my fresh-graduate days! It was a total shock!” said Michael, a 46 year old banker turned Product Manager. “I was almost burnt out by the second month!”
“I also had to adjust to working with team-mates who were half my age. I had to match their pace, lingo and energy levels which was invigorating and exciting. It offered me an insight into this new work dynamic,” he added.
The biggest thing you have to be ready for, is that joining a Startup is inherently risky. There are never any guarantees that the company will be around in the next year as even the disruptors themselves get unceremoniously disrupted by even newer startups.
2. Is the business model viable?
This is one of the biggest questions you need to ask yourself.
Does it pass the “Yeah, I’d pay for that with my own money” test?
Is this service or product something you would buy, not just once but over and over again, and be so awesomely excited about that you would recommend them to all your family and friends?
Or is it a novelty that would fade into oblivion once people got bored with it?
You also need to figure out if the business is sustainable. Will it still be around in 1 year? Does it have enough cash to last until the next round of financing?
You can probably get their funding details off the internet, and a quick eyeball of staff-strength and costs will give you an idea of their ‘burn rate’. So, even with a $1m seed fund, a startup with a 3000 square foot office, 2 pantry aunties and a team of 40 programmers will run out of cash in under 12 months.
Also, it the startup competing with a known giant? We often get business proposals to work with ambitious startups that want to build a better resume repository or professional networking platform than LinkedIn. Unless they have a uniquely different approach, competing directly with LinkedIn does not make commercial sense.
The moment you feel there’s little hope of success, walk away.
3. What type of package are they offering you?
The truth is, the startup probably can’t afford you.
As such, in exchange for a reduced salary, they will offer you stock options or equity to entice you to join them. At this point in time, stories of early stage employees like Steve Jobs at Apple will come flooding into your mind as you eagerly sign on the dotted line.
Also, some companies will offer you stock options which allow you to buy the publicly traded shares at steep discounts when the company gets its IPO (Initial Public Offering) and is listed.
However, the fine print here is that Options are worthless if there isn’t an IPO, and frustratingly meaningless in a ‘Trade-sale’ where the company is bought out by a bigger corporation. As there’s no listing, there’s no value attached!.
Instead, ask for direct equity, as in a percentage share of the business, so whenever the investors exit in whatever format, you will get still a piece of the action. Granted, many entrepreneurs are unwilling to split their equity with you, so you will need to learn how to negotiate your way in. Though difficult, the reward could be tremendous.
4. Will you ‘culture’ well?
It is not cliché to say that many startups are founded and run by younger people. This has implications with regards to the way they work, their values, and even the way they speak or communicate.
Will you fit in well in such a culture?
Especially if you come from a very structured, well-organised Multinational Company.
“I had such a difficult time acclimatising to their way of working – there were no systems, no processes, and the CEO made decisions on the fly without approvals or debate. I felt I was out of my element,” said Harry, 43, who spent his career at an Oil Major before moving to a startup.
Also, be prepared to report to a supervisor who could be much younger than you and collaborate with colleagues who have lived fewer years than you have been working. Are you ready to put your ego aside and take instructions from them?
5. Do you like the CEO?
As you will probably be working very closely with the Founders and especially the CEO, it is imperative that you have a good chemistry or working relationship with him/her.
Are you comfortable with his work-style, communications, or management ability? Do your values align?
We once had a client who left after a short 3 month stint at a startup because the CEO was a micro-manager and was unbearably difficult to work with.
This is exactly why you need to meet with the person you’re working with and get comfortable with him/her.
Moving into a startup is an exciting opportunity that should not be summarily dismissed.
Neither should it be hastily rushed into.
The risks are high, but so are the rewards, and the journey, whatever the outcome, would be a memorable one. There will be new and exciting skills to be learnt and friends to be made.
Many of the new learnings can be transferred to your next role and the new connections you’ve made can be of value to your future company, hence it could be a great career opportunity.
Make the move with both eyes open. Ask the right questions, do your homework, and be prepared for the adventure of a lifetime!
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