With the current uncertainty regarding the economy, joining a start-up for some may feel slightly risky, but it’s worth remembering the benefits of working at a tech start-up with huge potential that could disrupt a fast-growing, niche industry when that job offer lands in front of you. We spoke to Mat Ferdenzi to find out more.
Uber, WhatsApp, Instagram, Slack, Square, Venmo – some of the most recognizable names in tech were founded during The Great Recession between 2007 and 2009. A great idea that demand is high for has continually been proved to be recession-proof by tech giants and those working in niches with serious potential.
Take the semiconductor industry, for example, with a CAGR of 9.2% and projected to grow to a value of USD 483,00 billion currently in 2022 to USD 893,10 billion by 2029. The industry was minimally affected by the outbreak of COVID-19, and only looks set to grow despite what the overall economy might do, thanks to subsidies and the amount of funding going into the sector.
‘Recessions can often be a great time to found or join a start-up,’ comments Mat Ferdenzi, COO of Acceler8 Talent, who has 7 years of experience working with companies of all sizes during changing economic times.
‘Why still join a start-up in uncertain financial times or during a recession?’
Here’s why according to Mat:
- Start-ups that are not revenue generating aren’t so affected by recessions if they have the funding in place
- There is time to build a product and have it ready for when the economy picks up again
- So much innovation, greenfield projects, and work solving new technical problems taking place
As specialist tech recruiters, we do see some hesitancy in the hiring market towards joining start-ups due to concerns over a potential impending recession.
We’d like to share these helpful questions to ask during your interview to help you choose your next employer and feel assured they have the right strategy, financial health, and overall outlook, so you feel as comfortable as possible about taking a role.
Questions to ask a start-up you’re interested in joining
How much funding have you received so far, and how much runway will that give you?
What is your backup plan should you run out of money and be unable to secure funding?
What are your growth plans for the coming years?
Do you have an exit strategy?
How did you deal with COVID?
Have you ever made layoffs? (Note: this can indicate a poorly run company but doesn’t mean they are poorly run for certain)
What are the 3, 6 & 12-month plans for the role you are interviewing for?
Red flags to be aware of when interviewing with a start-up
Start-ups that need to raise funding soon/running low on money should be approached with a bit more care (note: this doesn’t necessarily mean they won’t be successful)
Lack of clear vision or different visions within the company
Multiple vision changes or pivots in company direction
C team is unclear on future funding plans
High attrition rates
Companies with no product-market fit can sometimes struggle to raise more funds