Originally published at https://medium.com/@betz.mark/three-things-to-ask-before-you-join-a-startup-5bde4214035f

In the business of software development joining a hot startup company, playing XBox in the break room, eating free food and cashing out your options for big money is the career three-pointer everyone seems to be aiming for. Many are the balls chucked at the hoop, and few are the shots being made. Still, playing the game can be fun, even if you’re not going to get rich (and you’re very likely not going to get rich). Playing on the wrong team can be a lot less fun. A startup can be a great place to work, and it can be a damned miserable place to work. I’ve done three of them in my career, and based on that experience I can suggest a few questions you should ask yourself before taking to the court.

Is it a great idea?

Is it even a good idea? This is a question that you can only answer for yourself. The SVP who is recruiting you thinks it’s a great idea. The CEO is super-excited. Everyone else you meet in the process of interviewing will be similarly positive. They have to be, even if they really aren’t. You can’t expect a frozen smile and secret hand signals under the conference table telling you to run for the door. The ones who believe are bought in, and the ones who don’t are trying to pretend they do, because they wouldn’t still be there if they didn’t need the paycheck. So it’s up to you to decide whether the product will fly, and how much it matters to you. Obviously needing a paycheck is a valid reason to keep a job, assuming the job is legal. But if you’re shooting for the win then whether there is any chance of winning matters.

To make things worse, nobody really knows whether a product will be successful before it is actually successful. All you can do is try to judge it from the outside like potential future users will. If you’re in the target audience, would you be excited to use it? Would your friends and relations in the target audience be excited to use it? If you are not in the targeted group do you know anyone who is that you can sound out? You have to act with care here if you’ve signed any sort of non-disclosure during the interview process, but that is pretty rare so there is usually no barrier to getting some outside opinions. And if you have been asked to sign one that might be a good signal that you don’t want to work there anyway.

Even if your own take, and that of those around you, is positive it doesn’t mean they have a winning product. Lots of good ideas are doomed to fail in the economic arena simply because they aren’t actually products: they’re features. An idea for some cool social thing that Facebook doesn’t do is very likely a feature, not a product. If they decide it’s important, perhaps because your startup has begun to get some traction, then they can add it faster than you can add all the other stuff they already have. Maybe they’ll buy you, maybe they’ll bury you. Betting on an acquisition can be an even riskier strategy than betting on growing organically. Ultimately developing a brand new product is a crap shoot, and if you’re going to put your time on the table it’s nice to believe in the game.

Does the management team know what it’s doing?

Hands down the most important question, and no easier to answer than the one above. It’s the most important question because it doesn’t matter how great the product idea is if the management team is incapable of building a company to exploit the opportunity. It’s hard to answer because great entrepreneurial leadership can come from almost anywhere. So instead of trying to predict based on the management team’s backgrounds, or any other personal characteristics, it is often best to look at their actual practices. You get the opportunity to examine these practices whenever that moment arrives wherein your interviewer looks across the table and says “Do you have any questions for me?”

Ask about the structure of the company. Who do engineers report to? Who does that person report to? How many different groups are there? How often do those groups collaborate with each other and how do they do so? What were the processes behind key technical decisions? The answers to these sorts of questions can illuminate the personalities and management philosophies of the leadership team. Startups have very limited resources available to accomplish a very daunting task. The best of them focus on results and collaboration. The others often take the investor’s money and use it to build structure, in the hopes that structure can replace inspiration. It never does.

At one startup I joined the warning signals were clear from the first interview onward and I ignored them all. When my questions revealed that the engineers regularly had bad decisions forced on them by a remote CTO I assumed I could influence things for the better. When I learned about the four layers of management between the engineers and the CEO of a 30-person company I assumed they knew something I didn’t about how big we were going to get and how fast. They did not. There was no hidden bombshell of success that they were preparing for. It was simply what they knew how to do: build and operate hierarchies. It was how they flourished in the large corporations from which they mostly came, and it was how they assumed they would flourish in the very different world of a start up. Needless to say flourishing is not what happened.

Are they serious about money?

Money is life in a business. It’s literally the blood in the veins and the air in the lungs. When I co-founded a software company back in the 90’s I learned a lot about money’s preeminence on the list of an entrepreneur’s daily concerns. It is astounding how much cash it takes to run even a small business. When you have nothing coming in, and hundreds of thousands going out every month, accounts dwindle with alarming rapidity. Payroll is a particularly inexorable force. Electronic funds transfers take place two days before the checks are cut, automatically, and if the money isn’t in the account the checks don’t go out. On more than one occasion I had to make late-night calls to customers whose relationships were soon to produce revenue asking for a little of that revenue up front so I could make payroll. Those can be tough and humiliating calls to make, but I’m proud to say we never missed a payroll in seven years.

Experiences like that will give you a sound appreciation of, and respect for, cash flow. You know what won’t necessarily give you that same appreciation? Being a senior executive at an established public corporation. Not to denigrate the responsibilities and challenges of such a role, but it is not the same. The level of expenditure that an average public corp. engages in just as the background noise of doing business would vacuum the accounts of an average startup dry in just a few months. In fact that is just what happens far too often, especially with investor-led startups. Successful business people with an idea and more money than time look for other successful business people to lead their new thing. Soon enough you have a bunch of corporate emigres in an empty office with a couple million dollars, and the overhead blooms like wildflowers on a spring meadow.

There’s nothing wrong with a few perks. Startup work can be hard and perks that make people feel better can be a good investment. But a startup that is spending money foolishly will not be around for very long. I worked at one where most of the senior execs lived in California and flew to the mid-west regularly, staying in downtown hotels on the company tab. The CTO’s sister-in-law’s husband was flown in every other week so he could issue door cards and set up email accounts. The same guy spun up 90 terabytes of cloud disk because someone told him we’d be handling a lot of data, and then left most of it empty for months. The company offered three free meals daily, as well as dry cleaning and every other perk on the list of “things startups do in The Valley.” The SVP who recruited me described them as “very well funded,” indicating he had no idea what either “well” or “funded” meant. Five months later they were laying off engineers.

Experiences like that are not what people join startups for. And while that example may be an anomaly in that the management was particularly foolish, nonetheless it is a rare startup that combines all the needed attributes of a great product, a ready and defensible market, a well-rounded team capable of executing and enough money to see it through to success. If you’re approached by a startup company, then the odds are pretty good that the business you’re talking to is in the process of dying. That’s true simply because most of them do. That doesn’t mean that the experience of working there won’t be a rich and rewarding one. It might very well be. But bear in mind that failing is never fun, and if all the other pieces are out of joint then it can be damned unpleasant to bear witness to. Better to ask the tough questions up front, then to be wishing you had asked them later when it all comes down.