❗Picking The Right Startup To Work For In Egypt❗
This article isn’t only dedicated to my 5 corporate friends who received job offers from startups and since then have been abusing our friendship to get free career coaching sessions. It’s also dedicated to all my friends and this newsletter readers who are already working in startups and feel that their growth trajectory has plateaued and are considering offers from other startups.
Thing is, majority of the talents in the market are not as risk takers as founders, so they’re basically looking for
startups with the best success chances to work for and learn & earn from!
This is also the case with most talents who ask me for a feedback about a startup that reached out to them. They have families, financial obligations and a career to build; so even if the startup’s mission is in alignment with their values, they need some sort of a guarantee that this place will not run out of money in the short term and therefore will be able to:
- Accelerate their career trajectory
- Surround them with top talents in the market
- Put them on the map and help them build a network
- Pay them relatively well
However, after tens of discussion I came to this realization:
The average talent in the market doesn’t have enough experience to conduct a proper investigation or lead a simple due diligence process to evaluate a startup.
You can’t judge a startup from the gossip you hear about it, you need to invest some time trying to evaluate their product & business model to evaluate their chances of success.
And as someone working with investors at a venture capital, I can assure you that even full time investors find it really hard to judge the chances of success of a startup!
To quote an investor I met recently, “the success odds of a startup are not so different to your success odds in gambling at Vegas!”
That’s why I’m writing this article with one objective;
I want to help you make better ‘educated guesses’ and ‘informed decisions’ about which startup to work for in Egypt.
By the way, I’m not over engineering this decision for you. Statistically, most startups will fail so if you’re ever going to join an early-stage startup, you really need to give yourself the best odds!
DISCLAIMER: Where you are on the career ladder today will impact how you perceive this decision on so many levels, so in this article I’m talking to talents with 2–10 years of experience.
How hard is it to pick a successful startup to work for?
Problem 1: Most startups are like a black box in the sense that there isn’t enough public data out there about their potential & growth trajectory (which isn’t the case for a corporate with 20+ years of existence)
Problem 2: The market is generally biased! Be it the startups with the biggest funds or the founders with more “talk than walk”; you can be easily deceived by shiny brands that will not add huge value to your experience.
Problem 3: Our startup ecosystem is relatively young in age and experience which makes it even harder in creating a criteria for what is an ideal startup to work for.
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I compiled below my personal favorite tips to friends looking to evaluate startups that approach them with job offers!
Tip #1: Traditional ‘lucrative’ resumes of founders are not a sufficient indicator for startup success!
First and foremost, when a startup is launched it’s basically 2 components: Founders + A Story
Everything you’re evaluating about a super early-stage company revolves around the founders, their experience and their chemistry.
Settling for traditional signals like their university and work history isn’t indicative of anything because ironically a neat profile in terms of a top university + multinational experience may make a great resume but can also tell you that these founders aren’t necessary suited for founding a company.
Think about it, rising up the ranks at Pepsico or Vodafone might indicate that this founder can only thrive in a well-structured environment, which is never the case in the chaotic kitchen of early-stage startup. However, this same neat profile might also mean that this founder is very competent which is actually an essential thing for any founder.
That’s what makes this so hard. It’s practically impossible to make up your mind by just looking at these credentials.
But you can always ask these questions:
DID THEY DO IT BEFORE?
DO THEY HAVE A TRACK RECORD IN THE STARTUP GAME?
Did any of the founders help in launching a startup, building a company, convincing an investor to fund them or leading an expansion of a startup to new markets?
These signals are important, but what’s also valuable to know is that the top cause of startup death during many “Y Combinator” batches was cofounder disputes!
So are these founders getting along and complementary to each other in terms of profile, skills and what they bring to the table?
Personally, I like to ask the founders about which early assumptions they had about their product and market that turned out to be wrong to get insights about their agility, critical mindset and decision making.
Tip #2: Raising funds might be crucial for startup success, but who the investor is might be more critical!
Why do investors put money in a startup? They’re basically betting that this company has the potential to grow exponentially and become more valuable very fast, helping them earn a massive return down the road.
So if the startup that’s reaching out to you raised funds, this probably means that the investors have a team that researched this market, evaluated the founders, tried the product, analyzed competitors and dissected the data room of this startup!
But although I’ve been in the VC field for less than a year, I can tell you this: Some founders are just so good at passing all these investors’ assessments, even if the backend of their startup is on fire!
The more exposed and experienced the investors are, the more accurate their startup assessment will be. And what investors/VCs would be more exposed than those who have several successful startups in their portfolio? Big VC names backing up the startup reaching out for you is usually a relatively good sign.
That’s why many of us were excited when Telda announced Sequoia is investing in them! I mean, finally in Egypt you’re going to have the presence of an investment vehicle that has Apple, Google, Airbnb, WhatsApp, YouTube and more in their portfolio!
To know more about who invested in which startup, check crunchbase & techcrunch.
Tip #3: Understand 1 thing about the startup & 1 thing about yourself: “THE STAGE THEY’RE IN & YOUR RISK APPETITE.”
I cannot emphasize how much every stage of the life of a startup has its challenges and its people!
Joining Noon Academy at 2017 when my salary would be late by the months while I’m working with 2 colleagues in a coffeeshop was a completely different experience than when I left in 2021 when we were already monetizing in multiple countries and had a huge office with 70+ talents in it and $20M in the bank!
Some stages are all about the excitement of the hustle and the exponential growth, other stages are about building systems and optimizing operations. You need to ask yourself about your appetite!
Do you want to join a startup still in the process of figuring out what its business model is or do you want to jump into execution after they achieved product market fit and are revenue generating?
Does this startup have a decent financial shape that allows it to attract top talents or are you willing to help them invest home-grown talents?
For me, what mattered most was always my growth rate, which meant I needed to be at a startup that’s on a great growth trajectory.
I ranked my priorities as follows:
Growth, Equity, Pay, Risk!
Below I tried to capture the different stages of the life of a startup for you to be able to relate to which would you prefer to be in!
a) Launching phase
Very high risk of failure and low pay, but you’ll definitely learn a lot on how to build a startup from the ground up. Extremely tough stage and conditions (I lived this first-hand 3 times). Equity at this point is just a sentimental gift from the founders.
b) Pre-Seed / Seed-funded
While the risk is still very high, you can at least guarantee your salary for a few months. The nature of the challenges here are much different than when there was no money in the bank. It goes down to the maturity of fund allocation and running the right experiments on the business model. I personally learned a lot at this stage.
c) Series A funded
A lot of validation has happened by this stage and there’s a lot of learning and stretching that happens to the talents here. Pay should be decent by now. While failure risk might be a relatively less, the pace and the pressure is higher to reach a complete product market fit and start scaling. One of the last stages where taking equity will help make you wealthy if the company exits or IPOs.
d) Series B & Above
The startup by now figured out its product-market fit and is growing fast! More funds are being poured in to help it scale so the hiring and expansions happen every day. A much lower risk and a lot of experience gaining happens here too but it becomes more of a corporate with a startup DNA.
e) Pre-IPO
Risk is much lower obviously or is at least of a completely different nature. An IPO on your resume is always a great plus! (I don’t have a lot to say here, never tried it to be honest, but learned a lot from my wife who worked in SWVL for the over the past year.)
Tip #4: The top senior management of the startup need to have lived through the above stages!
When you join a super early-stage startup with talents who were part of other startups that reached perhaps series A or even an IPO, they will have a lot of accumulated experience in terms of how to handle each phase. Fundamentally, their presence in this new startup indicates that they personally saw something that compelled them to join it. I mean why would top talents put their career on the line, especially if they already made financial gains in previous experiences and aren’t only in it for the money.
Also, you want to solve problems with the smartest people in the startup without multiple layers of management, so if you have an offer from a startup that is a magnet for top talents (for reasons beyond breaking the pay scale) you should probably heavily consider it!
NOTE: This is one of the reasons the talent acquisition teams in startups are beginning to invest and spend money on employer branding, they want to showcase who their top talents are to attract you. I personally heard tens of people who want to join a certain health tech startup because of a new senior manager who joined them and has a good reputation!
Tip #5: Look at verified ecosystem reports that tell you if the industry & market of this startup is picking up or not! (& the competitive landscape)
Ever thought about why FinTech is growing faster that most industries? Well let’s at it this way:
Startups are essentially experiments, and their survival depends mainly on their ability to ‘Pivot’ their business model when they feel they hit a wall. So when a certain industry and/or market is very huge, it gives many of the companies in it a much bigger room for ERROR, RECOVERY & PIVOT! This also means by default a bigger potential success rate.
So at an industry like Fintech that is heavily intersecting with the practically every person, company and government in the world; startups have a vast market and tons of room to not just try different business models and innovations, but to convince investors of a way to success beyond the initially communicated one. The market allows it.
So, when my friend joined a crypto-currency trading startup, we were looking at a relatively new market growing exponentially; it was a no brainer. They had the first mover advantage which usually covers up deficiencies in both the team and the product and also means there aren’t many funded companies in this market to annoy you.
When my other friend joined a newly launched e-commerce startup, we were looking at relatively bigger pre-existing market with large players which means it will be much tougher for them as a new company to survive. Large established markets with funded competitors are much less forgiving and will need you to have an exceptional differentiation!
Many startups don’t have a chance from the get-go due to a critical mass of competitors that own the market.
Tip #6: Ask insiders and your network about the ways of working, your line manager, the culture & the product!
I won’t get into details here, just investigate things like:
- How product ideas are generated?
- How work is delegated?
- What the speed of action is like post-strategy meeting?
- How decisive and assertive are the top management of this startup when it comes to decision making?
Remember that talents join companies and quit managers!
So no matter how shiny the startup brand is, if your manager sucks, you’re in for a very rough ride.
In conclusion,
As someone who studied and practiced career coaching since 2017, I can assure you that it’s much tougher for both coaches and clients when it comes to sessions related to approaching a move to a startup due to their ambiguity. As a matter of fact, most of the tips I wrote in this article might be useless in a super super early-stage startup! But in most cases these tips should put you on track.
I didn’t get into things like:
- Asking about your mixture of cash and equity compensation (Check my previous articles)
- Conducting a product review yourself (Check my future articles :) )
- Making sure your values and mission are in alignment with this startup’s mission (because the financial rewards of an Exit or IPO will be gained if you stay all the way to the end which might be something like 8 years for example!)
However, consider all the above tips as signals and writings on the wall that can help reveal the health of a startup and if they are equipped to thrive long-term if you decide to join them!
Remember, there is no such thing as
the RIGHT startup to work for,
but there definitely is something like the most MATCHING startup for your current phase!
