SomeRandom

Account Executive, Mid Market

Valued Contributor

Contributor

Fire Starter

SaaS Start Up 🚩 ?

Hey War room,

A simple but interesting question for me right now:

When interviewing for a position with a startup, what are some red flags you look out for/ are sure to avoid?

It's simple as that. Interviewing for one right now, as an AE, and want to cover my bases, especially given this remote environment. I'm used to mature/ experienced start-ups.

The company in question is much smaller and younger than my current employer and I'm not sure what to look out for to ensure there's actually a decent company there for me to actually serve.

thanks and may the sales winds ever flow beneath your wings 🫡

🎈 Mentorship

👥 Hiring

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CPTAmerica

Opinionated

President/CRO

Do they have PAYING customers? How many? What is the churn rate? *RED FLAGS: no ARR, very high churn rate, heavily discounting to sign a few customers. Shows bad product market fit.

If that's good, how many reps do they have? How many have they burned through? Why did they leave? Who leads the sales team?
*RED FLAGS: high rep turnover, no one hitting goals, each previous higher "just wasn't the right fit." Lookout for co-founder lead sales teams if that co-founder does not have experience in that area.

If you're still feeling good, what are the founders goals? What valuation do you expect to hit and when? Are you going to be raising and if so how often?
*RED FLAGS: Insane valuation goals, only focused on raising the next round of funding, no real honest goals for the company, product, people.

Hope that helps. Good luck!

jefe

Arsonist

🍁

Solid list here.
I'd also add finding out how those customers were acquired. I've been burned in the past when I realized that almost all were via the network of the founder and CMO/VP.

oldcloser

Arsonist

💀

Count the number of times the hiring manager uses the “I” pronoun vs “we.” If “I” outweighs “we” they’re a self centered egomaniac. If they bring up the Corvette they just bought. Hang up.

Otherwise, have them walk you through a few recent deals. See what sort of process they have in place to gage the insanity that’s going to exist. Determine whether their solution is actually proprietary. This matters. Good luck!

SomeRandom

Valued Contributor

Account Executive, Mid Market

“Determine whether their system is proprietary” — elaborate please, context, process, anything? Thanks!

oldcloser

Arsonist

💀

Sure- Is this software patented? You built it? Anyone else have it or anything like it? If they tell you it's patented and there is no competition, you could even ask to see the patent. And if it's patent pending, that means nothing unless there's a provisional patent.
This is a question I failed to ask and later realized how fast a $2M deal can evaporate when a bigger player in the same space wants to keep their market share and box out little guys. You really should know where it sits in the competitive landscape.
There are lots of look-a-like shiny objects out there. Even if they do have a product market fit they can prove, their might be someone else with a better mouse trap and a smaller price tag.

Diablo

Politicker

Sr. AE

Use the search bar aka. SalesGPT and you will get your answer :)

SoccerandSales

Big Shot

Account Executive

From SalesGPT:
According to Bravado members, there are several red flags for startups: Quotas are overly aggressive and unattainable, indicating potential misalignment between the CEO, leadership and the board regarding realistic goals. The engineering/product team is being overworked to produce an unrealistic roadmap, and not enough time is spent on gathering and analyzing customer feedback to improve the product. The product was developed in isolation without customer involvement or feedback, which can lead to a product that doesn't meet market needs. A lack of financial stability and high turnover rates, where employees are continually brought in and out. Leadership is toxic or stubborn and unwilling to make necessary changes or relinquish control. The business model is shaky or unsustainable. The company has stagnant growth, with no increase in headcount over a considerable period. There's a poor revenue per employee ratio, anything less than 200k per employee might be a cause for concern. The startup regularly pivots its product and market identity, which can indicate indecision and instability. Perks start to disappear and more performance improvement plans (PIPs) are implemented, indicating financial troubles or dissatisfaction with employee performance. The company is low on the adoption curve compared to competitors in the same market. These are just some indicators and it's important to evaluate each situation individually.

Justatitle

Big Shot

Account Executive

Are they on time for the interview? Does the company have its strategy laid out and there's a path for growth? What does their inbound look like right now vs how much is pure outbound? Are they willing to admit that they are going to be learning while they grow and be adaptable? People that haven't worked out for them, why not? and where did it go wrong?

braintank

Politicker

Enterprise Account Executive

Check this: https://bravado.co/war-room/posts/somewhat-comprehensive-guide-to-avoiding-a-toxic-startup

Account Executive

I agree that PMF is your biggest question. True PMF is the hardest thing to get for a startup. My academic research shows 60% of Seed funded companies fail to get to Series A. Also, I have seen survey research that shows 60% of sales reps fail to make quota. I am currently researching to see if there is a correlation. Try to determine if they have PMF. Your big personal question is to determine if you think their Lead Gen is sufficient to hit your quota. More importantly, ask the CEO how are they going to support you in hitting your quota.

AnchorPoint

Politicker

Business Coach

Review the business plan and ask about the financing. Who is betting on them?

Kosta_Konfucius

Politicker

Sales Rep

Ask what their burn rate is?

JDialz

Politicker

Chief Operating Officer

Odds are that they won’t go public, so if your compensation is significantly weighted to “equity” I wouldn’t go for it.

pirate

Big Shot

🦜☠️ Account Executive

What has been the growth? What are the people like?

Maximas

Tycoon

-1

Senior Sales Executive

Does it have any GD reviews from previous employees!!

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SomeRandom

SaaS Start Up 🚩 ?

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