Summary: When choosing your next company, first determine which stage (pre-product fit, post-product fit, growth, or scale) is the best match. Usually only 1 or 2 stages make sense for any given job search.
Just landed here via First Round Review, this article exceeded my expectations and I'm excited to see what else you have to say about career management. Thanks for creating this newsletter!
Thanks, Nikhyl for this piece. The insights are just mind-blowing. Thanks for starting the Substack.
I'm 35+ and have stayed in stage 4 company for a decade. Started a couple of things after graduation; it didn't go anywhere. On break now, exploring new things to do, start-up, writing... How do I maximize my chances for $ + reputation?
Will keep coming back to your posts to see what you have to say on this topic on subsequent posts.
Landed here from Lenny's podcast. Great timeless piece on picking companies in different PMF stages, Nikhyl!
My personal experience has been very "crafter" focused - worked on four pre-PMF products at early-stage startups, big tech and my own venture in the past five years. Unfortunately none of these products was a wild success, so thinking about switching to a post-PMF product to develop different skillsets and experience. (I try not to judge my fit as a crafter solely based on the outcomes as achieving PMF is rare and most products/startups fail for various reasons)
Hi Nikhyl, really really great ariticle! it brings structure in career development thinking! I have two questions, wonder if you can have a chance to answer, thanks!
1. What skills and value we should have/prepare before joining different stage of companies?
2. What skills and value we should develop/earn after joining different stage of companies?
I understand this relates to the final goal of career development. Let's say the goal is to be an executive of a late stage or hyper growth stage company. And it will be great if you can share some examples of career growth chart to this final goal. Thanks!
Thank you for this great article! Do you have any advice or tips on how to find companies that are in growth mode (v.s. Product Fit or Scale mode)?
Are there certain metrics you look at (ex. revenue growth/DAV growth) or other signals to filter on? If there are certain metrics that are useful, where can one look these up (as a lot of these are not easily available as the companies in this stage are private)?
You probably can take advantage of the venture industry, which is asking the same question. When companies have so much customer pull that they cannot fulfill it, they actively look to raise substantial venture money. Put another way, when you see a company raising large rounds of financing or raising from later stage venture firms, you know they are hitting hypergrowth.
At Credit Karma, as soon as they hit hypergrowth, Tiger Capital put in money. And shortly after Google Capital and eventually Silver Lake. These firms very rarely invest in anything that's not in hypergrowth mode.
Hi Nikhil, superb article. Agree to all points. Is there a framework to determine which company is in Post-PMF stage or Growth stage? I guess you can't get that idea by simply stalking the company.
Not easily. Most companies think they have product market fit (PMF) far before they actually have it. Similarly, lots of early stage companies claim to be in growth mode, when they are still figuring out how to stabilize their product.
Investors dig into the company fairly exhaustively before they put money in. So I think that valuation and size of financing is a good clue. If a company suggests they are in growth mode but have yet to turn a profit and haven't raised much venture money, either they are unusually conservative or investors are struggling to see the same thing. On the other hand, if you see lots of open roles on the website, the company has raised substantial money, execs with experience are starting to be added to the leadership team, and it seems like they have customer growth and buzz - you are probably seeing growth mode.
Amazon in the 2010s may be an exception. Amazon did not have profits in those years, but they already have product market fit, but they had super growth in other areas... I guess, Amazon itself is too big may not be a great example.
"Post-product fit companies need functional experts who can introduce stability.
People who thrive here can introduce the right amount of structure and process without frustrating founders and entrepreneurs."
Nikhil, We have experienced some sort of PMF and are now looking at resources that help us to stabilize. How do I balance the agility and the stability aspect of my product? Is there any guidance that allows me to introduce processes without completely losing the ability to run fast.
Introduce process conservatively. Instead of trying to proactively anticipate problems, choose to be reactive. Wait for a problem to emerge, shine a light on it for everyone, ensure there is alignment that process is required, and then apply a fix. Then come back 90 days later and ensure (a) the problem is addressed, and (b) the fix isn't worse than the initial problem. This conservative approach avoids a massive cultural pivot and is likely natural for the team, which uses a similar approach to iterate through product fit.
What is your advice for joining an acquired startup? Given that most acquisition fail or don't give good results (~70% fail), should one try to get that experience under their belt?
I suspect that was the intended question. I for one would love your thoughts on it. ("should you consider joining a team that used to be a startup and now part of a bigger company"?)
I think this decision is more about the bigger company and less about the startup. Meaning that when you join a big company, you usually reap the benefit after a few years, not instantly. That might be in the entry role or might be in a second or third position. So if the startup seems promising but the larger company is unattractive - that's probably not worth the risk.
On the other hand, if you think the startup has a great subculture and you can quickly come up to speed and contribute, it's a good entry point. But over time, regardless of the success of this entry role, you'll probably want to leave the nest and explore the larger company as a whole.
How do you deal with the criticism of gatekeepers / recruiters who often times ask you as to why you switched over 4 companies in the last decade?
I do believe that that part of the equation is missing. I have come across people who have said that after switching companies frequently - they are suffering from this perception.
It comes down to your story. If you stay at the same place for 10 years or move 4 times in the same period, they both may require a story. If you've struggled to keep a role, then naturally it would concern a recruiter. It doesn't mean it's not a perfect fit on both sides, just doesn't pattern instantly to success.
However, if you have moved for good reason, then present what happened. The answers I like to see is someone who is very intentional about their career and decisions. And some real attempts at trying to make things work. But luck is such a huge factor in finding fit, that there are good reasons.
Last note: I think recruiters tend to be a lot more sensitive to this than hiring managers, who probably have experience with successful, short tenured people. In your example, the average tenure at tech is 2-3 years, so it's not actually crazy to have four roles in 10 years.
Great question and I'm hoping to devote an upcoming note to new grads. I don't work with many people just starting their careers, but my quick advice is that for the vast majority of people, structure and a good manager really helps. And having a strong brand can only help you downstream. This favors hypergrowth or late stage.
However, I started my career in startups and I'm glad I did. It was important for me to experience early stage and it's much harder to do this later in life. The opportunity cost is just too high, as you can get really attractive roles at late stage in your 40s. And you can simply take more risk early. So if you must experience early stage, do it early. But if you aren't sure or it's not for you, go later stage.
I hadn't considered decline and I think it deserves a separate note, great point. Decline can (and does) happen at all stages. In fact, probably most rare after you are market leader, but clearly that happens as well. Most companies in tech aren't able to sustain.
Decline usually means it's time to head for the exit, though it could enable early leadership and responsibility. That's tempting and can be a career accelerator in the right situation.
+1 for decline of startup tech companies. From experience, one can join the company at just at the right time (after series A or when crypto startups were hot), however, very quickly the decline often follows and you are left wondering how to deal with it.
Just landed here via First Round Review, this article exceeded my expectations and I'm excited to see what else you have to say about career management. Thanks for creating this newsletter!
First Round brought me here, too! Nikhyl is a great writer, the concepts are straightforward and a fun read.
Thanks, Nikhyl for this piece. The insights are just mind-blowing. Thanks for starting the Substack.
I'm 35+ and have stayed in stage 4 company for a decade. Started a couple of things after graduation; it didn't go anywhere. On break now, exploring new things to do, start-up, writing... How do I maximize my chances for $ + reputation?
Will keep coming back to your posts to see what you have to say on this topic on subsequent posts.
this was such a great article! As someone currently applying to startups, the information here was so valuable.
Great analysis Nikhyl!
+1 landed here from twitter - this is gold and look fwd to reading more of your posts
Landed here from Lenny's podcast. Great timeless piece on picking companies in different PMF stages, Nikhyl!
My personal experience has been very "crafter" focused - worked on four pre-PMF products at early-stage startups, big tech and my own venture in the past five years. Unfortunately none of these products was a wild success, so thinking about switching to a post-PMF product to develop different skillsets and experience. (I try not to judge my fit as a crafter solely based on the outcomes as achieving PMF is rare and most products/startups fail for various reasons)
Hi Nikhyl, really really great ariticle! it brings structure in career development thinking! I have two questions, wonder if you can have a chance to answer, thanks!
1. What skills and value we should have/prepare before joining different stage of companies?
2. What skills and value we should develop/earn after joining different stage of companies?
I understand this relates to the final goal of career development. Let's say the goal is to be an executive of a late stage or hyper growth stage company. And it will be great if you can share some examples of career growth chart to this final goal. Thanks!
Thank you for this great article! Do you have any advice or tips on how to find companies that are in growth mode (v.s. Product Fit or Scale mode)?
Are there certain metrics you look at (ex. revenue growth/DAV growth) or other signals to filter on? If there are certain metrics that are useful, where can one look these up (as a lot of these are not easily available as the companies in this stage are private)?
You probably can take advantage of the venture industry, which is asking the same question. When companies have so much customer pull that they cannot fulfill it, they actively look to raise substantial venture money. Put another way, when you see a company raising large rounds of financing or raising from later stage venture firms, you know they are hitting hypergrowth.
At Credit Karma, as soon as they hit hypergrowth, Tiger Capital put in money. And shortly after Google Capital and eventually Silver Lake. These firms very rarely invest in anything that's not in hypergrowth mode.
Thank you for the very prompt response! I will look into those VC firms/patterns of investment to filter for hypergrowth companies.
Hi Nikhil, superb article. Agree to all points. Is there a framework to determine which company is in Post-PMF stage or Growth stage? I guess you can't get that idea by simply stalking the company.
Any ideas?
Not easily. Most companies think they have product market fit (PMF) far before they actually have it. Similarly, lots of early stage companies claim to be in growth mode, when they are still figuring out how to stabilize their product.
Investors dig into the company fairly exhaustively before they put money in. So I think that valuation and size of financing is a good clue. If a company suggests they are in growth mode but have yet to turn a profit and haven't raised much venture money, either they are unusually conservative or investors are struggling to see the same thing. On the other hand, if you see lots of open roles on the website, the company has raised substantial money, execs with experience are starting to be added to the leadership team, and it seems like they have customer growth and buzz - you are probably seeing growth mode.
Amazon in the 2010s may be an exception. Amazon did not have profits in those years, but they already have product market fit, but they had super growth in other areas... I guess, Amazon itself is too big may not be a great example.
"Post-product fit companies need functional experts who can introduce stability.
People who thrive here can introduce the right amount of structure and process without frustrating founders and entrepreneurs."
Nikhil, We have experienced some sort of PMF and are now looking at resources that help us to stabilize. How do I balance the agility and the stability aspect of my product? Is there any guidance that allows me to introduce processes without completely losing the ability to run fast.
Introduce process conservatively. Instead of trying to proactively anticipate problems, choose to be reactive. Wait for a problem to emerge, shine a light on it for everyone, ensure there is alignment that process is required, and then apply a fix. Then come back 90 days later and ensure (a) the problem is addressed, and (b) the fix isn't worse than the initial problem. This conservative approach avoids a massive cultural pivot and is likely natural for the team, which uses a similar approach to iterate through product fit.
What is your advice for joining an acquired startup? Given that most acquisition fail or don't give good results (~70% fail), should one try to get that experience under their belt?
Is your question "should you consider joining a team that used to be a startup and now part of a bigger company"?
Yes
I suspect that was the intended question. I for one would love your thoughts on it. ("should you consider joining a team that used to be a startup and now part of a bigger company"?)
I think this decision is more about the bigger company and less about the startup. Meaning that when you join a big company, you usually reap the benefit after a few years, not instantly. That might be in the entry role or might be in a second or third position. So if the startup seems promising but the larger company is unattractive - that's probably not worth the risk.
On the other hand, if you think the startup has a great subculture and you can quickly come up to speed and contribute, it's a good entry point. But over time, regardless of the success of this entry role, you'll probably want to leave the nest and explore the larger company as a whole.
How do you deal with the criticism of gatekeepers / recruiters who often times ask you as to why you switched over 4 companies in the last decade?
I do believe that that part of the equation is missing. I have come across people who have said that after switching companies frequently - they are suffering from this perception.
It comes down to your story. If you stay at the same place for 10 years or move 4 times in the same period, they both may require a story. If you've struggled to keep a role, then naturally it would concern a recruiter. It doesn't mean it's not a perfect fit on both sides, just doesn't pattern instantly to success.
However, if you have moved for good reason, then present what happened. The answers I like to see is someone who is very intentional about their career and decisions. And some real attempts at trying to make things work. But luck is such a huge factor in finding fit, that there are good reasons.
Last note: I think recruiters tend to be a lot more sensitive to this than hiring managers, who probably have experience with successful, short tenured people. In your example, the average tenure at tech is 2-3 years, so it's not actually crazy to have four roles in 10 years.
Thanks for sharing that.
Do you think any of these stages is more suited to junior devs right out of college/bootcamp?
Great question and I'm hoping to devote an upcoming note to new grads. I don't work with many people just starting their careers, but my quick advice is that for the vast majority of people, structure and a good manager really helps. And having a strong brand can only help you downstream. This favors hypergrowth or late stage.
However, I started my career in startups and I'm glad I did. It was important for me to experience early stage and it's much harder to do this later in life. The opportunity cost is just too high, as you can get really attractive roles at late stage in your 40s. And you can simply take more risk early. So if you must experience early stage, do it early. But if you aren't sure or it's not for you, go later stage.
Thank you for your answer! ☺️
Great analysis! In my opinion it misses a fifth step : decline. We don’t always know the company is in decline when joining it and it could be war.
I hadn't considered decline and I think it deserves a separate note, great point. Decline can (and does) happen at all stages. In fact, probably most rare after you are market leader, but clearly that happens as well. Most companies in tech aren't able to sustain.
Decline usually means it's time to head for the exit, though it could enable early leadership and responsibility. That's tempting and can be a career accelerator in the right situation.
+1 for decline of startup tech companies. From experience, one can join the company at just at the right time (after series A or when crypto startups were hot), however, very quickly the decline often follows and you are left wondering how to deal with it.