1. Senior people leaving (as has been said by pretty much everyone else in this thread).
2. Not having a clearly defined problem to solve, or a well understood target audience.
3. Not knowing who the competition are, or just dismissing them as "not being as amazing as us."
4. Little or no customer research - if you hear the phrase "customers don't know what they want" and it's not immediately followed by "so we need to do research and find out" - run.
5. Building solutions that don't really map back to problems. This can manifest in a lot of ways, but the most common ones I've seen: projects constantly changing in priority (entire projects materialise and become urgent overnight), features that are arbitrarily demanded, or in an over-emphasis on polish and minutia.
6. Departments not collaborating, things getting thrown over the fence. Workflows that move in the wrong direction.
7. Lack of autonomy - a handful of people make all of the decisions.
8. Micromanagement. People tend to micromanage when things aren't going well, which tends to make them worse. It's a downward spiral.
9. Being afraid to talk to management about problems; being chastised for suggesting ways to improve things.
10. When mistakes are made, focusing on blame rather than resolution and prevention.
I'm very familiar with #8. I worked for a company that was being super picky with its term sheets when looking for investment, but then suddenly the credit crunch happened and all our term sheets were withdrawn. Problem was, we were spending as if we'd already had an extra $15m in the bank, so we had to start cutting back.
I'd had a habit of coming in around 10 AM and staying most of the day and part of the late afternoon/evening; typical startup kind of 'go get lunch then come back and crank out some code' behaviour, while most of the rest of the dev team came in between 11 and 1. This includes one of our best developers, who, without downtime, ported an entire product from PHP to Rails on his own time over the weekend because the code was unmanageable and he wanted to be able to iterate faster.
Suddenly, after most of the most senior (and most expensive) people have left, the CEO decides that everyone needs to be in the office at 9 AM, you know, so we can communicate. Sure, okay. So people start coming in at 9 AM. They're tired, they haven't had breakfast, they only got 5 hours of sleep, but boss wants people filling seats so we fill them. I start getting phone calls at 9:03 if my bus is running late, because my buffer time was usually taken up by being in such a rush that I forgot my wallet.
So every day, everyone's tired, everyone's frustrated, and everyone's leaving after they've put their 8 hours in. My start date, when my options were priced, was the highest price the shares had ever traded at. But I was still one of the most well-paid engineers so I stayed until I got 'downsized' and took a month off.
Last I heard, the CEO was getting sued by the board for treating that company as a source of resources for his other company (like flights back to his other company's office, or my tech support to get his people up and running).
#10 struck me. I'm doing work for one guy that seems somewhat litigious and I'm afraid it might bring the startup down. There's no such thing as a solid contract with a bad person.
All great points. In my experience I have seen revenue losses followed by products/solutions which do map to the main objective of the company but in reality is scraping the bottom of the barrel. Example having billing of $1 million MRR but then releasing products with $15-20k MRR. So essentially the management is out of ideas on how to make up the revenue losses.
I'm the CEO of a 20-person startup and we've been on the brink of failure twice. Both times, our employees were never aware of it from the symptoms other people might expect (e.g., late payroll, some senior folks leaving); in fact, during such times we paid everyone ON TIME so that we wouldn't be on the hook later if things went to hell.
I would flip the question back to you:
(1) Do you trust your CEO?
(2) If you DO trust the CEO, then the only time your startup is failing is when the CEO tells you they're close to failure, running out of money.
If you DON'T trust your CEO, then your startup is also failing and #2 doesn't apply.
That's how I would think about it.
I think every startup employee has the right to ask me about runway, cash on hand, etc. I would be open with that info and have shared these metrics in the past with them.
I say this because we (a) hire MBAs, (b) hire less qualified developers for roles that do not require deep technical knowledge, (c) have motivational posters, etc... And as we grow, become profitable, and scale to 50+ people, we require these things simply to survive and thrive.
How could someone mistake that for a startup on the brink of failure is beyond me, but that's what some people seem to be writing in these comments.
> If you DO trust the CEO, then the only time your startup is failing is when the CEO tells you they're close to failure, running out of money.
The question is not really "how to know your startup is failing right now." I think it's pretty obvious when a startup is already failing.
The question is, instead, what the signs are that a startup is on the "wrong track" and will inevitably begin failing six months to a year down the line.
I've worked at several companies that were already in the "inevitably going to fail" category before I was even hired—retroactively, looking at when they took on the qualities that ended up killing them, they had those qualities for my entire tenure there (though they didn't previously had them; frequently I was hired as the replacement for the key cofounder whose departure, according to others there, signalled the beginning of the end.)
So, I don't want to know whether my startup is failing. I want to know whether a potential employer is failing, so I can avoid riding yet another startup into the ground and suffering through the inevitable cash-crunch and lay-offs. What are the warning signs, visible from the outside, that a startup is headed that way?
>I say this because we (a) hire MBAs, (b) hire less qualified developers for roles that do not require deep technical knowledge, (c) have motivational posters, etc...
I can't say this inspires very much confidence. Why does hiring MBAs mean you are successful? What exactly do they do to make you successful? On developers, if they have the knowledge for the job then they are qualified, not less qualified. This terminology is very worrisome. And motivational posters? That was a joke I guess?
And what does any of this have to do with being on the brink of failure or not? You can have a perfect team and still fail because of a bad product direction or market fit.
This is a great answer. Trust is intangible, so maybe it's easy to overlook or forget.
Some of the other signals could just as easily reflect management's reading habits. It doesn't mean the other comments are wrong, but if you are looking for "early signals," be honest with yourself and hone your trust-dar.
* Gut feel. This doesn't say much, but sometimes that is a good heuristic. It isn't one thing, but you'll just get a feeling.
* Custemers are not signing up and not paying. The most obvious one. But this can be hard to find. But say if you are used to add features or fix bugs customers find, and then all of the sudden nothing. It could mean product is in good shape, or nobody is using it.
* Senior people leaving. Especially developers whose judgement you trust.
* Drastic changes to the product. "Wait, why are we pivoting?" Corrolary: quite often the pivot fails. It is always in the news if it succeeds. but that is only because it is exceptional.
* No bonuses, and salaries have not been going up. If you somehow find out that nobody's salary went up and nobody got a bonus (this is hard often, companies don't want you to discuss those things).
* Maybe a sharp increase in team-building activities. Taking everyone for lazer tag is cheaper than increasing salaries. But it presents this image of "everything is fine". I have seen that -- a few senior people left. All of the sudden a sudden surge of minigolf, bbq, ski trips and other to mask away the issues. But then again, this can be a sign that the team is doing so well and are being rewarded. I guess this is more of a gut feel and depends on the large context (so it is a secondary sign).
* Owners start avoiding meetings and questions. Because they know they might have to lie. It is up to you, but you can try to ask directly. Then you sort of force their hand. That could backfire. You are now "not a team player" and not a "culture fit" so beware.
> Maybe a sharp increase in team-building activities. Taking everyone for lazer tag is cheaper than increasing salaries.
That can also be a sign that the founders hate each other and are about to split the operation - one of them is treating the employees as children in the hope that they go with a favourite parent's splinter company. They are probably doing it subconsciously.
Nailed it. This is exactly what happened at the startup I was working for. I saw the writing on the wall and left, along with 2 other senior developers. Replaced by a set of fast-hire "interns"* that couldn't code. Then management started flip-flopping between a bunch of different projects with severe micromanaging: standups twice a day, constant focus on Jira metrics. Deadlines became very tight under monetization pressure from investors. Ultimately, the grand "2.0" version of the app that was going to save the company never launched, the series B was not raised, and the company fell apart.
*I say "interns" because they were actually full-time hires at 1/4 the price of developers.
Sometimes a senior developer will leave and it's not an indicator at all. EG: the founding CTO was more of a coder than a manager and as the company grows you need a CTO who is more manager than coder - that is a tough bump. If the exit is clean/healthy with transition period and no hints of animosity then that's just normal events as a company grows and demonstrates resilience - yet still not comfortable.
Bluntly: the CTO who takes you from $0 => $5M may not be the one who takes you from $5 => $50.
Replace CTO with any other senior position.
However if multiple senior people are leaving with short notice then you should ask them where they are going.
Lots of secret meetings, CEO more stressed and distracted than usual, strangers visiting the office and looking around, hasty writing of documents.
The dead giveaway - salary paid late or not at all.
If your salary is ever paid late then check to see if you are being paid all of your statutory entitlements such as pension plan and government insurances. If the company is not paying these things, go to the CEO and tell no one else except them that you know they are not paying your legal entitlements and you want it paid now. If you have lots of leave accumulated then that is cash value to you and is at risk when the company goes bust. Resign as soon as you can because companies typically need to pay out all your entitlements and unused leave when you resign - and you definitely want to do that before everyone else rushes to do the same, and before the company goes pop leaving you with nothing. Somehow you need to navigate in a non illegal/ non extortionate way letting them know that you'll go quietly if they paid you everything you are owed - careful on this one, you are breaking the law if you say "pay my entitlements or I'll.... " You are of course entitled to explain that you have spoken to your lawyer and accountant to understand exactly what they owe you, and also explain that they have advised you to contact the tax office if you are not being paid what you are meant to be paid, presuming that is the case, which it should be. The CEO won't be enthused about anyone asking the tax office why the company is behind on its payments and this will give incentive to the CEO to pay you fully out. Make sure you and your accountant calculate exactly what you are owed and have it in writing - don't let the CEO/company calculate that because it is likely to be wrong.
Sometimes I think this is the "Does she/he really love me?" question. Because it says a lot about the person asking and about their world view.
I'm pretty sure that every company I've worked in had a success rate that was inverse to the belief that it was failing. That is to say assume that the company is failing, always. That makes two things true, first when you get "bad news" that something hasn't gone right it doesn't suddenly throw you for a loop, after all the company is failing. The second is that you are more carefully looking for things that are helping, and putting energy into them so that you can extend the life of the company just that much more.
You are most at risk when you think you are not failing, then you take your eye off the ball and start coasting a bit. Taking some "me" time as it were. That is when a glitch or misstep will feel like a huge betrayal from "we're doing well" to "we're dooooomed!" And everyone will stop and reassess just when you need them to be taking action and responding.
Often the root of this question is, "Should I stay or should I leave?" After all if you conclude the company is failing you can give yourself "permission" to leave. And since that is the root question, I have found a better way to ask it is, "Is working to make this company a success helping me achieve what I want to in the next 5 years?"
Whether or not the company is failing is irrelevant as input to the question, "Is this the best way to be spending my time?" That question can only be answered by thinking about what you want to do, or be doing, or not be doing, in the future and evaluating if what your are doing right now is getting you closer to or further away from that future.
Saving money in new ways, with adverse consequences on work and employees that prove it isn't a benign optimization. Variant: ending or selling off "unnecessary" luxuries.
For example, the newest computers are cheaper than old ones, free food is replaced by a vending machine, art on display disappears.
The slightest hint of late payments. For example, salary one day late "because the bank made a mistake": in reality, the company was waiting for cash but negotiations with banks or other lenders were difficult enough to miss the deadline.
Just last week my three person startup had a payroll issue, bank error affecting one employee only. On top of the previous months payment being late by 15 days! As the founder/CEO it's freaking scary to know that money is the prime source of trust for my employees and if I lose it => REKT!
If your CEO fucks around with YOUR money at ALL watch out!
And don't be shy about asking about finances. If you have stock grants or options then you are not only an employee but also an INVESTOR and may be entitled to these details - but you have to ask.
As for my employee: the second time the bank messed up I had to stop payment on the pending one (time w/bank +fee!) then went direct to Western Union to wire cash within the hour (+fee). If payroll is late I expect the CEO to spend two hours immediately fixing it and assume costs necessary to expedite.
I'll be writing a longer response in a few minutes. I am the CEO of a 20-person startup and there were a few scenarios we've had where payroll was truly late because of bank issues.
Just want to bring this up so people aren't paranoid when such things happens. They DO happen, especially now that so many startups use "cool" and "hip" startup payroll providers that also make mistakes.
My guide for a company in decline--and more pointedly for when it's time to leave--is the bullshit/productivity ratio. How much time are you being asked to spend on bullshit that doesn't get product out the door vs. real work on product? If b/p is high, that's a red flag. Now look at the first time derivative of b/p. Is b/p increasing or decreasing with time? If it's increasing, that's a bigger red flag. If it's decreasing, maybe the problems are getting fixed and you should consider sticking around. Finally, if b/p' is positive look at the second derivative. Is b/p accelerating or decelerating? If the former, LEAVE NOW. If the latter, maybe b/p is approaching an asymptotic level you an live with. Or not.
If every sale remains an exercise in business development and requires the driving force of a founder or similar key person, then the company is closer to failure than success.
While this type of biz dev feels like forward action in the trenches, in reality it means that you are only a few key deals or people from an empty accounts receivable.
Companies that bring process to the prospecting and sales cycle, and develop a path to closing business that is not highly dependent on a small pool of stakeholders have a clear path to growth.
Specifics to very early stage start-up following the methods currently labelled as "Lean":
In this case the exercise in BD is relabelled "Customer Development" and the founder is there directly to learn from and build relationships with the early (<100?) customers. The "Way of Lean" says to do these things that "don't scale" to help create a better refined, higher quality product that customers really do want.
By deal #101 some processes should be in place, because now the customer is clearly defined an there is good market fit.
Statistically, every early stage business is closer to failure than success...until they're not.
This is very interesting question and answer is not so simple.
First, if a company is a startup which is not yet profitable and burning investors money you should assume that the company is failing. Yes - you might be wrong (i.e., the company is AirBnB, Dropbox, etc.) not but in 95% of cases the company will eventually fail. In this case, just ask CEO/CFO/your manager about what is runaway, cash on hand, etc.
Second, if a company is already established (out of startup mode) then you can see signs:
- senior management leave (they have access to more informations than you)
- rapid flip-flopping on features and priorities (maybe caused by above)
> a startup which is not yet profitable and burning investors money you should assume that the company is failing
If a startup doesn't have a period where it is "not yet profitable and burning investors money", then it didn't need investors in the first place. The whole point of venture capital is to enable the existence of "convex" business models that require a period of revenue-less work before anything happens.
There are many type of businesses that need to 'burn investor money' before income. Those investors can be (partly) the founders but when R&D of a product takes millions because of external factors then you cannot prevent spending only investor money at least until you have something to sell.
If you have any exposure to the business side of things (which in a small[ish] company just about everyone does no matter the role unless the management is proactively hiding these things which then is a pretty clear symptom in and of itself), the impending doom is typically pretty evident.
Things like not being close to breaking even in the foreseable future, investors getting cold feet, having to pivot to appease the VCs etc etc.
On this last point - you really see the true colors of upper management when pivoting kicks in. If there are concrete actions taking place aimed at getting shit done to keep the company afloat - there might be a chance there. If, however, it's just posturing and paper-ware BS to fool the investors into thinking there's a fundamental change of direction - that would be a major sign of things being REALLY bad.
To me, the number one sign is the deterioration of HR policies. Beyond late salaries, when they begin doing away with flexible work environment, like variable hours, and try imposing things and micromanaging, effectively treating knowledge workers like shop floor laborers (there isn't anything wrong being a shop floor laborer, I am just providing a reference), it is a sign of what is imminent.
I used to work at a place, a 10 year old established medium sized company, that was hit so hard by recession of 2009 that it disintegrated. The HR thing I mentioned is the period I can trace back to to say when it was the beginning of the end.
In some sense, every company is always at risk of failure.
Fortunes can turn quickly.
Also, every success story has a few tense nail biters on the way.
If you are an employee (not a founder,) then keep a rainy day fund on hand, and leave if the work is no longer what you want to do. Also, make sure expense reports and paychecks are paid on time, even for successful companies!
If you can actually pick up on this, it's a good early warning sign. If you don't already have your two weeks in by the time they take away the coffee maker, you've probably already stayed too long.
[+] [-] waffleau|9 years ago|reply
1. Senior people leaving (as has been said by pretty much everyone else in this thread).
2. Not having a clearly defined problem to solve, or a well understood target audience.
3. Not knowing who the competition are, or just dismissing them as "not being as amazing as us."
4. Little or no customer research - if you hear the phrase "customers don't know what they want" and it's not immediately followed by "so we need to do research and find out" - run.
5. Building solutions that don't really map back to problems. This can manifest in a lot of ways, but the most common ones I've seen: projects constantly changing in priority (entire projects materialise and become urgent overnight), features that are arbitrarily demanded, or in an over-emphasis on polish and minutia.
6. Departments not collaborating, things getting thrown over the fence. Workflows that move in the wrong direction.
7. Lack of autonomy - a handful of people make all of the decisions.
8. Micromanagement. People tend to micromanage when things aren't going well, which tends to make them worse. It's a downward spiral.
9. Being afraid to talk to management about problems; being chastised for suggesting ways to improve things.
10. When mistakes are made, focusing on blame rather than resolution and prevention.
[+] [-] danudey|9 years ago|reply
I'd had a habit of coming in around 10 AM and staying most of the day and part of the late afternoon/evening; typical startup kind of 'go get lunch then come back and crank out some code' behaviour, while most of the rest of the dev team came in between 11 and 1. This includes one of our best developers, who, without downtime, ported an entire product from PHP to Rails on his own time over the weekend because the code was unmanageable and he wanted to be able to iterate faster.
Suddenly, after most of the most senior (and most expensive) people have left, the CEO decides that everyone needs to be in the office at 9 AM, you know, so we can communicate. Sure, okay. So people start coming in at 9 AM. They're tired, they haven't had breakfast, they only got 5 hours of sleep, but boss wants people filling seats so we fill them. I start getting phone calls at 9:03 if my bus is running late, because my buffer time was usually taken up by being in such a rush that I forgot my wallet.
So every day, everyone's tired, everyone's frustrated, and everyone's leaving after they've put their 8 hours in. My start date, when my options were priced, was the highest price the shares had ever traded at. But I was still one of the most well-paid engineers so I stayed until I got 'downsized' and took a month off.
Last I heard, the CEO was getting sued by the board for treating that company as a source of resources for his other company (like flights back to his other company's office, or my tech support to get his people up and running).
[+] [-] steveeq1|9 years ago|reply
[+] [-] thisisit|9 years ago|reply
[+] [-] jmporcel|9 years ago|reply
[+] [-] gl338|9 years ago|reply
I would flip the question back to you: (1) Do you trust your CEO? (2) If you DO trust the CEO, then the only time your startup is failing is when the CEO tells you they're close to failure, running out of money.
If you DON'T trust your CEO, then your startup is also failing and #2 doesn't apply.
That's how I would think about it.
I think every startup employee has the right to ask me about runway, cash on hand, etc. I would be open with that info and have shared these metrics in the past with them.
I say this because we (a) hire MBAs, (b) hire less qualified developers for roles that do not require deep technical knowledge, (c) have motivational posters, etc... And as we grow, become profitable, and scale to 50+ people, we require these things simply to survive and thrive.
How could someone mistake that for a startup on the brink of failure is beyond me, but that's what some people seem to be writing in these comments.
[+] [-] derefr|9 years ago|reply
The question is not really "how to know your startup is failing right now." I think it's pretty obvious when a startup is already failing.
The question is, instead, what the signs are that a startup is on the "wrong track" and will inevitably begin failing six months to a year down the line.
I've worked at several companies that were already in the "inevitably going to fail" category before I was even hired—retroactively, looking at when they took on the qualities that ended up killing them, they had those qualities for my entire tenure there (though they didn't previously had them; frequently I was hired as the replacement for the key cofounder whose departure, according to others there, signalled the beginning of the end.)
So, I don't want to know whether my startup is failing. I want to know whether a potential employer is failing, so I can avoid riding yet another startup into the ground and suffering through the inevitable cash-crunch and lay-offs. What are the warning signs, visible from the outside, that a startup is headed that way?
[+] [-] tensor|9 years ago|reply
I can't say this inspires very much confidence. Why does hiring MBAs mean you are successful? What exactly do they do to make you successful? On developers, if they have the knowledge for the job then they are qualified, not less qualified. This terminology is very worrisome. And motivational posters? That was a joke I guess?
And what does any of this have to do with being on the brink of failure or not? You can have a perfect team and still fail because of a bad product direction or market fit.
[+] [-] danielhooper|9 years ago|reply
Therefore making them perfectly qualified for the job you are giving them?
[+] [-] endswapper|9 years ago|reply
Some of the other signals could just as easily reflect management's reading habits. It doesn't mean the other comments are wrong, but if you are looking for "early signals," be honest with yourself and hone your trust-dar.
[+] [-] djfm|9 years ago|reply
Yes!
[+] [-] rdtsc|9 years ago|reply
* Custemers are not signing up and not paying. The most obvious one. But this can be hard to find. But say if you are used to add features or fix bugs customers find, and then all of the sudden nothing. It could mean product is in good shape, or nobody is using it.
* Senior people leaving. Especially developers whose judgement you trust.
* Drastic changes to the product. "Wait, why are we pivoting?" Corrolary: quite often the pivot fails. It is always in the news if it succeeds. but that is only because it is exceptional.
* No bonuses, and salaries have not been going up. If you somehow find out that nobody's salary went up and nobody got a bonus (this is hard often, companies don't want you to discuss those things).
* Maybe a sharp increase in team-building activities. Taking everyone for lazer tag is cheaper than increasing salaries. But it presents this image of "everything is fine". I have seen that -- a few senior people left. All of the sudden a sudden surge of minigolf, bbq, ski trips and other to mask away the issues. But then again, this can be a sign that the team is doing so well and are being rewarded. I guess this is more of a gut feel and depends on the large context (so it is a secondary sign).
* Owners start avoiding meetings and questions. Because they know they might have to lie. It is up to you, but you can try to ask directly. Then you sort of force their hand. That could backfire. You are now "not a team player" and not a "culture fit" so beware.
[+] [-] privateersman|9 years ago|reply
That can also be a sign that the founders hate each other and are about to split the operation - one of them is treating the employees as children in the hope that they go with a favourite parent's splinter company. They are probably doing it subconsciously.
[+] [-] hoodoof|9 years ago|reply
[+] [-] codemac|9 years ago|reply
[+] [-] malux85|9 years ago|reply
Money problems (Travel cancelled, Free food/drinks stopped)
Drastically shorter deadlines.
They start hiring programmers who cannot code (Literally cannot fizzbuzz)
Rapid flip-flopping on projects couples with constant firefighting.
Starting to Micromanage developer time in intervals less than 1 day - (exactly 3 hours on X, exactly 2 hours on Y, exactly 3.5 hours on Z)
[+] [-] throwaway129384|9 years ago|reply
*I say "interns" because they were actually full-time hires at 1/4 the price of developers.
[+] [-] edoceo|9 years ago|reply
Bluntly: the CTO who takes you from $0 => $5M may not be the one who takes you from $5 => $50.
Replace CTO with any other senior position.
However if multiple senior people are leaving with short notice then you should ask them where they are going.
Last three points above are 100%
[+] [-] maxxxxx|9 years ago|reply
[+] [-] hoodoof|9 years ago|reply
The dead giveaway - salary paid late or not at all.
If your salary is ever paid late then check to see if you are being paid all of your statutory entitlements such as pension plan and government insurances. If the company is not paying these things, go to the CEO and tell no one else except them that you know they are not paying your legal entitlements and you want it paid now. If you have lots of leave accumulated then that is cash value to you and is at risk when the company goes bust. Resign as soon as you can because companies typically need to pay out all your entitlements and unused leave when you resign - and you definitely want to do that before everyone else rushes to do the same, and before the company goes pop leaving you with nothing. Somehow you need to navigate in a non illegal/ non extortionate way letting them know that you'll go quietly if they paid you everything you are owed - careful on this one, you are breaking the law if you say "pay my entitlements or I'll.... " You are of course entitled to explain that you have spoken to your lawyer and accountant to understand exactly what they owe you, and also explain that they have advised you to contact the tax office if you are not being paid what you are meant to be paid, presuming that is the case, which it should be. The CEO won't be enthused about anyone asking the tax office why the company is behind on its payments and this will give incentive to the CEO to pay you fully out. Make sure you and your accountant calculate exactly what you are owed and have it in writing - don't let the CEO/company calculate that because it is likely to be wrong.
[+] [-] ChuckMcM|9 years ago|reply
I'm pretty sure that every company I've worked in had a success rate that was inverse to the belief that it was failing. That is to say assume that the company is failing, always. That makes two things true, first when you get "bad news" that something hasn't gone right it doesn't suddenly throw you for a loop, after all the company is failing. The second is that you are more carefully looking for things that are helping, and putting energy into them so that you can extend the life of the company just that much more.
You are most at risk when you think you are not failing, then you take your eye off the ball and start coasting a bit. Taking some "me" time as it were. That is when a glitch or misstep will feel like a huge betrayal from "we're doing well" to "we're dooooomed!" And everyone will stop and reassess just when you need them to be taking action and responding.
Often the root of this question is, "Should I stay or should I leave?" After all if you conclude the company is failing you can give yourself "permission" to leave. And since that is the root question, I have found a better way to ask it is, "Is working to make this company a success helping me achieve what I want to in the next 5 years?"
Whether or not the company is failing is irrelevant as input to the question, "Is this the best way to be spending my time?" That question can only be answered by thinking about what you want to do, or be doing, or not be doing, in the future and evaluating if what your are doing right now is getting you closer to or further away from that future.
[+] [-] HelloNurse|9 years ago|reply
The slightest hint of late payments. For example, salary one day late "because the bank made a mistake": in reality, the company was waiting for cash but negotiations with banks or other lenders were difficult enough to miss the deadline.
[+] [-] edoceo|9 years ago|reply
If your CEO fucks around with YOUR money at ALL watch out!
And don't be shy about asking about finances. If you have stock grants or options then you are not only an employee but also an INVESTOR and may be entitled to these details - but you have to ask.
As for my employee: the second time the bank messed up I had to stop payment on the pending one (time w/bank +fee!) then went direct to Western Union to wire cash within the hour (+fee). If payroll is late I expect the CEO to spend two hours immediately fixing it and assume costs necessary to expedite.
[+] [-] gl338|9 years ago|reply
Just want to bring this up so people aren't paranoid when such things happens. They DO happen, especially now that so many startups use "cool" and "hip" startup payroll providers that also make mistakes.
[+] [-] WillPostForFood|9 years ago|reply
* conflict between founders
* investors start "suggesting" changes to strategy or stack
* hiring someone external to take over tech team
* instituting some new "system" to improve productivity
* appearance of consultants
[+] [-] wyclif|9 years ago|reply
[+] [-] dreamcompiler|9 years ago|reply
[+] [-] ramtatatam|9 years ago|reply
[+] [-] phasetransition|9 years ago|reply
While this type of biz dev feels like forward action in the trenches, in reality it means that you are only a few key deals or people from an empty accounts receivable.
Companies that bring process to the prospecting and sales cycle, and develop a path to closing business that is not highly dependent on a small pool of stakeholders have a clear path to growth.
[+] [-] edoceo|9 years ago|reply
In this case the exercise in BD is relabelled "Customer Development" and the founder is there directly to learn from and build relationships with the early (<100?) customers. The "Way of Lean" says to do these things that "don't scale" to help create a better refined, higher quality product that customers really do want.
By deal #101 some processes should be in place, because now the customer is clearly defined an there is good market fit.
Statistically, every early stage business is closer to failure than success...until they're not.
[+] [-] tlogan|9 years ago|reply
First, if a company is a startup which is not yet profitable and burning investors money you should assume that the company is failing. Yes - you might be wrong (i.e., the company is AirBnB, Dropbox, etc.) not but in 95% of cases the company will eventually fail. In this case, just ask CEO/CFO/your manager about what is runaway, cash on hand, etc.
Second, if a company is already established (out of startup mode) then you can see signs:
- senior management leave (they have access to more informations than you)
- rapid flip-flopping on features and priorities (maybe caused by above)
- TPS reports become a norm
[+] [-] derefr|9 years ago|reply
If a startup doesn't have a period where it is "not yet profitable and burning investors money", then it didn't need investors in the first place. The whole point of venture capital is to enable the existence of "convex" business models that require a period of revenue-less work before anything happens.
[+] [-] tluyben2|9 years ago|reply
[+] [-] ChemicalWarfare|9 years ago|reply
Things like not being close to breaking even in the foreseable future, investors getting cold feet, having to pivot to appease the VCs etc etc.
On this last point - you really see the true colors of upper management when pivoting kicks in. If there are concrete actions taking place aimed at getting shit done to keep the company afloat - there might be a chance there. If, however, it's just posturing and paper-ware BS to fool the investors into thinking there's a fundamental change of direction - that would be a major sign of things being REALLY bad.
[+] [-] p333347|9 years ago|reply
I used to work at a place, a 10 year old established medium sized company, that was hit so hard by recession of 2009 that it disintegrated. The HR thing I mentioned is the period I can trace back to to say when it was the beginning of the end.
[+] [-] jwatte|9 years ago|reply
[+] [-] slater|9 years ago|reply
[+] [-] mkov|9 years ago|reply
[+] [-] slackoverflower|9 years ago|reply
[+] [-] nerdponx|9 years ago|reply
[+] [-] pasbesoin|9 years ago|reply
[+] [-] unknown|9 years ago|reply
[deleted]
[+] [-] vellum|9 years ago|reply
* No more free soda or coffee.
* Toilet paper quality suddenly drops.
* Someone comes by to measure your desk and cubicle, but refuses to tell you why.
[+] [-] trimbo|9 years ago|reply