How Do You Know When to Take Career Risks?

(Photo credit @claybanks)

Venture capitalists are by definition investors who take calculated risks, and usually really, really big ones. Their goal is to invest in multiple companies with the assumption that the majority of them will fail, but at least 1 out of 10 will yield 10X or higher results (which will hopefully make up for the failed investments). They spread the risk out. They listen to hundreds, even thousands of startup company pitches and select the ones they think have the best chance of success, after evaluating the company’s management team, the financials, the tech’s potential, etc.

And even with all the resources at their disposal, they get it wrong ALL the time.

So please don’t think you have to have everything figured out completely before you decide to take a career leap. And know that you’re going to make some mistakes along the way - but that’s ok!!

Let me offer you some tips and strategies to help you with this type of career decision-making.

With VCs being taken in by the hype, how can you avoid joining a leaky ship (aka a bad startup)?

• Try thinking of making career changes as taking calculated risks. For some, it’s helpful to think of a chess game. How many moves ahead can you plan out and how does that help you decide what to do today? When/how do you need to shift strategy when your “opponent” throws up a surprise move (aka a life change, an industry shift, or an economic downturn)?

• Learn to identify your risk tolerance. I talk often with students/clients about identifying your ‘risk tolerance.’ Everyone has a different way of assessing risk in their career and in figuring out how much risk they can handle at any one time. Remember, it can also fluctuate based on your age, family dynamics, finances, etc.

  • Check out this article for more details on the RRIS method for improving your risk tolerance.

• Face your fears. You can also work to increase your risk tolerance by trying this fear-setting technique from this famous guy Tim Ferriss I knew in college.

  • The aim of the exercise is to name your fears so you don’t let them lurk in the shadows and prevent you from taking big actions. I was surprised by how helpful it was the first time I did it, that even though I scared the hell out of myself, it felt great to vocalize my fears and face them!

  • Here’s another take on this fear-setting exercise too.

Another way to make hard career decisions is by educating yourself so you aren’t leaping blindly.

• What universal skills do you have? You can educate yourself about your skills by taking assessments like StrengthsFinder.

• Learn about the startup landscape. You can also use some of the tools the VCs do to educate yourself about the startup landscape & specific niches within it (fintech, 3D printing, IoT, etc): CBInsights and VentureScanner.

• Get recommendations on top startups to join. Wealthfront also does a yearly career-launching companies blog post, and provides great criteria/methodology for how to choose among one of these organizations.

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Want personalized career guidance? Take a look at my Career Strategy Session options.

Have you caught IPO/SPAC fever?

(Photo credit @markuswinkler)

I was moderating a panel yesterday with multiple people who work in tech -- and one panelist offered a piece of advice to those attendees new to tech. “Keep up with tech news -- especially mergers & acquisitions -- because for some reason, tech people love to discuss M&A, IPOs, and startups.” I laughed as a) it’s true, b) I’m one of those people, and c) I had already selected this week’s newsletter tech topic as IPO fever has migrated from Silicon Valley to Wall Street. The excitement for these public listings is contagious.

#TECHTOPIC

This week began with a huge wave of B2B SaaS companies deciding to file paperwork to go public. The 6 companies that filed in the US included Snowflake, Palantir, Asana, JFrog, Sumo Logic, and Unity Software. (Don’t forget - Airbnb also filed last week.) Matt Turck at FirstMark Capital did a couple of S1 teardowns here - and the big news is that Palantir hasn’t made a profit in 17 years. Not to be outdone, Jack Ma’s Ant Group filed its IPO paperwork on Tuesday to go public with concurrent listings on the Hong Kong and Shanghai markets. 

A few of the companies opted for a direct listing (which means they bypass investment banks), and so you also saw both the NASDAQ and the NYSE gain approval from the SEC this week to provide new direct listing options to companies. 

And what is a SPAC? And why does the acronym feel so ‘eww’ when you say it? SPAC = special acquisition company, and is essentially a shell company that IPOs to raise money to buy another company that isn’t strong enough to IPO - so the SPAC can take it public anyway 2 years later or so. Confused? Not surprising. Just one more weird financial instrument out there.  

The big question: why are so many tech startups are looking to IPO during a pandemic? Simple, the stock market continues its improbable rise and they want to take advantage! 

Did all these IPOs get you excited about starting your own company? Check out this Startup Best Practices Library.

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Want a Career in Tech but aren’t sure where to start? Take a look at MY COURSE, ‘TECH SEARCH COMPASS’ FOR STEP-BY-STEP SUPPORT

Should I join a startup right now?

(Photo by @Samanthasophia)

The sun is shining. I’ve set up my “outdoor office” (read: picnic table + umbrella), and my Google Nest wifi ensures I can do Zoom meetings outside! Grateful that spring has finally arrived in upstate NY & that I am able to enjoy it. Spring brings hope for a brighter future, which is something we could all use right now. 

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#techtopic + #careertips

I’ve gotten a lot of questions recently about joining startups. Is this really a good time to take this type of career risk? How do I know if I’m cut out for working at a startup? Are startups even hiring or getting funding? What industries should I look at? Let me aim to tackle these questions and I’ll also give you some career actions to take for each. 

1. Is this really a good time to take this type of career risk?

It depends.

Many will tell you Yes, many others will tell you No. Not helpful.

Taking risky steps is always a way to accelerate your career. Sometimes they work really well, sometimes they don’t - but in most cases, the fact that you took a calculated risk (regardless of outcome) is a positive career signal. 

What does help is ensuring you have some type of rubric to evaluate the risk of the opportunity itself, as well as your own personal risk tolerance (which I’ll cover in the next section). 

First, you should aim to understand the following three things:

1. What general stage of company growth is the startup in?

   • The word startup is so mis-used and often both refers to a 5 person company and a 500 person company (and there is great variation in the working experience of these organizations. A great overview article on this suggests aiming for hypergrowth startups to maximize compensation, career trajectory, culture and product/market fit. 

2. Does the startup have a strong management team?

   • One of the biggest reasons I’ve seen startups fail is because the management team was not aligned, or failed to keep everyone else moving in the same general direction. 

3. Does the startup know where they sit on this startup org growth chart? 

   • I love the chart below for showing the target success metric for each funding level across a variety of criteria (including product/market fit; management perspective; value proposition, etc). 

2. How do I know if I’m cut out for working at a startup?

No one can answer this question for you, except you. However, if you are someone who enjoys navigating uncertain work environments, likes to be hyper collaborative, can manage asynchronously, and who is willing to learn from mistakes -- you’re probably well on your way to being a great startup hire. I worked at a 5 person startup and a 500 person startup - both were great, yet challenging experiences. 

1. Identify your risk tolerance. Often used in terms of investing, you should also consider your risk tolerance in terms of career risk. Not taking risks could be even more risky -- and if you are considering a risk in COVID19 times, you should know yourself & your reactions to risk. 

2. Or better yet, start learning how to manage your emotions as working at a startup is like riding a rollercoaster. Love this article on how to navigate the ups and downs (including the sage advice of ‘share your Legos).

3. Are startups even hiring or getting funding? What companies/industries should I look at? 

Yes, startups are hiring in COVID19 times, and yes, they are getting funding. 

1. If you are not already familiar with how startups are funded, I suggest checking out this short primer from Investopedia.

2. Once a company closes a funding round, they sometimes go on a hiring spree (as funding is often used for capital investment, either physical or human). To see who is getting funding, you can check out Crunchbase, Pitchbook, or CBInsights.

3. Wealthfront puts out a yearly list of ‘career-launching companies’ with a specific rubric for evaluating their potential to be on this list. You can check out their methodology here.

4. If I’m interviewing, what questions should I ask? How do I evaluate an offer(s)?

Startup hiring is a whole different ballgame than interviewing at most established companies. They are often aiming for one type of hire, but learn quickly along the way - and may hire you for something else, due to your particular skill set. More to come on how to navigate startup interviewing - for now, here are some great guides to get you started. 

1. Angel.co put together a great shortlist of questions to ask in interviews, based on what your most important criteria is: compensation; career or culture. 

2. To really stand out, I suggest sending a one-pager recap to your interviewer of what you heard them articulate as their biggest pain points, and ideas/projects that you can lead to help them mitigate those concerns. It can be a risky strategy - but if it’s done well, you will have demonstrated that you are able to listen, synthesize and strategize action steps. 

3. For compensation, here are two great guides to check out:

   • This is a guide for how startups should think about comp (so you know what they are thinking).

   • This is a guide from Carta & their free startup equity calculator to help candidates evaluate a startup offer. 

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Want personalized job search strategy tips and career guidance? Take a look at my Career Strategy Session options.

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#awwww

This 1min video is adorable: watch penguins have a ‘day of fine art & culture' at a museum in Missouri.

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