Entering StartUpLand: An Essential Guide to Finding the Right Job

by Jeffrey Bussgang

Comparison with Product and Marketing Many startups struggle with how growth differs from the product or marketing function. Because it is such a new function, and because the points of overlap are somewhat intentional to create internal tension, the confusion is understandable. Table 5-1 may help sharpen the distinctions between the functions.

RESOURCES For more about growth roles and skills in StartUpLand, I recommend: Books •Ellis, Sean, and Morgan Brown. Hacking Growth (New York: Crown Business, 2017). This book provides a detailed review of the growth role and numerous case studies of growth efforts, written by a leading practitioner in the field.

GrowthHackers (blog).wwww.growthhackers.com. This blog provides a rich set of projects, blog posts, and a network of fellow growth managers to learn from and collaborate with.

There’s a funny habit that all my startups have. Every six months, they come to me and say, “These coming six months are the most important ever in the company’s history.” And they’re right. The next six months are always the most important. And Sales is at the heart of that.

Evaluate each company along the same criteria we venture capitalists employ, which are typically three simple ones: •Team: Is the founding team compelling? Can they articulate a vision that inspires you and others around them? Are they of high integrity? Would you want to work with them again in their next company? •Market: Is the market that the company is operating in massive (i.e., greater than $1 billion in revenue potential)? Is the market experiencing some kind of disruption that might lead to opportunity for a new entrant like this startup? How crowded is the market, and does this startup have a sustainable unfair advantage over the competition? •Business model: Are the unit economics (i.e., the comparison of revenues and costs of each customer unit or product unit) attractive? Is the company already able to articulate the lifetime value of each customer, the acquisition cost of each customer, and compare the two? Does the company’s business model contain network effects—that is, will the business get more valuable as the network of users grows such that initial market momentum will result in more momentum and value? If it has customers, do they appear loyal and have growth potential over time or are they canceling the relationship (churning out)?

In general, the startup community is incredibly generous with its time and has such a strong “pay it forward” culture, that with tenacity and time you can get to almost anyone. In fact, I recommend you aim high. Use the heuristics I’ve described in this chapter to narrow down your search and then list out ten people who would be your absolute top choices to sit down with for thirty minutes face-to-face for networking purposes. Then go after those ten people in any way you can (granted, without stalking them or being a nudge). Even if it turns out the job fit isn’t right, networking meetings like this will help you establish valuable relationships and will lead to additional, interesting meetings and connections. In short, be organized, focused, and tenacious. Aim high, seek out the incremental networking meetings, and pick yourself out a prospective winner. Things may not work out, but at least you’re putting yourself in a position for a little positive serendipity.

Table 8-2 gives an example of this sort of scenario planning for the hypothetical option package of 1,000 stock options, representing 1 percent of the company fully diluted, at a $5 strike price. TABLE 8-2 Scenario planning for evaluating stock option value Company value $0 $10 million $50 million $100 million Value per share $0 $100 $500 $1,000 Net value of 1,000 options $0 $95,000 $495,000 $995,000 Probability 50% 25% 15% 10% Expected value $0 $23,750 $74,250 $99,500 Sum of expected values weighted by probability: ($0 × 50%) + ($23,750 × 25%) + ($74,250 × 15%) +($99,500 × 10%) = $27,025 Sum up these four expected values in the context of the probability weightings and you get $27,025. Thus, in your judgment, owning 1 percent of the company has an expected value of just under $30,000. This exercise can be helpful in mapping out how much you think the stock options are truly worth—both the range of possible values and the likelihood of hitting those values—and assist you in trying to normalize the value of an offer from one company as compared to another.

You can find the current version on my blog at www.SeeingBothSides.com. The blog post is entitled “Advice to Grads: Join a Winning Startup,” so just search for “winning.”