Harj Taggar - Choosing a Startup to Work At

Hey everyone, I'm Harj. I'm a partner at Y Combinator, and I'm going to answer how do you choose a startup to work at.

So the first thing is to be sure you actually want to work at a startup. Working at a startup is not for everyone. It's a very unique experience, and it's totally fine if it's not your thing.

Um, Paul Buchheit, who is an early engineer at Google and also a Y Combinator partner, I asked him, like, how do you know if you should work at a startup or if you should go work at a big stable company? He said that if you're happy working where you are and you don't have a strong desire to do anything else, you're probably going to get paid less and have to work more if you leave for a startup. So if getting paid less and working more is unappealing to you, I would recommend staying where you are.

Um, and I think that applies equally to college graduates. Right? Like if you want a more stable career path where you're paid more today and for less work, then join a big company.

Um, but once you know that what you're looking for is a startup, and then when you're choosing the one to join, I would advise you to think a lot like an investor does when they're picking a startup to invest in. Because that's essentially what you are. Investors are investing money in companies, and you're investing your time and your energy, kind of your life.

So there are a few things that investors look for. The first is look for signs that the startup is already succeeding. Like joining a startup that succeeds is the best kind of startup experience. Like as a startup grows, there'll be more opportunities for you to learn. There'll be more interesting people that get hired. Your network will grow, your career will accelerate.

Um, these are all really great reasons to join a startup, and they are stronger the more successful the startup is. So the way you do this is when you're interviewing with the company, ask them, like, how many users they have and ask them what metric do you track to see if you're being successful or not? And how has that been growing over time?

And the most important thing to focus on here is not the absolute numbers, it's the growth trajectory. So if a startup has a million dollars in monthly revenue but it's had a million dollars in monthly revenue for the last 12 months in a row, that's less exciting than a startup that has 10,000 in monthly revenue but the previous month it only had five. So look for the trajectory, not where a startup is right now today.

The second thing to look for is the team, and that always starts with the founders. So you only want to work at a startup where you're really impressed by the founders and whoever they've hired so far. And in particular, when you're evaluating founders, don't look for traditional credentials. It doesn't matter if they went to a great college or if they worked at world-renowned companies. Many of the best founders took a slightly different path and don't have the traditional credentials you might associate with success and aptitude.

So I would advise you instead to look at how well those founders have done relative to their peer group and where they began. So, as an example, a 19-year-old founder who grew up in Milwaukee and has managed to raise a seed round and move to Silicon Valley and build a company might be more impressive than an engineer who worked at Google for 15 years and has left to start a company and is in sort of the same place.

So look for these like outlying traits in founders that indicate that they're just a bit unusual and likely to build an outlying kind of company.

Third, don't try and evaluate the size of the market that the startup's in. Like, this is the most common mistake investors make when they're trying to pick a startup, and it's how they miss out on the really big ones. A really famous example here is Airbnb. Many, many, many of the best investors in Silicon Valley all rejected Airbnb because they thought it was kind of crazy, this idea of people sleeping in each other's houses, and felt that was a pretty limited market.

So don't try and play that game. But what I would say is, while not every great startup seems like it's in an obviously big market at the start, every great startup always has this core group of early users who are fanatical about the product. So even though they want a lot of people using Airbnb in the early days, the people who did use Airbnb really loved it. And every great startup has that trait.

So if you're thinking about joining a startup, I'd ask to talk to some of the users and see how much they love the product. And even if it's a small group, if the depth of their passion for the product and the startup is deep, that's a really, really good sign.

So summing up, if you're thinking about joining a startup, I base your decision on the founders, how much the current users love the product, and look for signs of growth.