How to Choose a Company

When I last went through the job search process, I happened upon an excellent article by Dan Hock called How to Choose a Startup. I think it’s one of the most helpful, practical, and important articles I’ve read thus far, but there’s one small problem - What if you don’t want to work at a startup? And so I present my attempt at a more unified theory of where you should work.

How to choose a startup

Dan’s article centers around a “hierarchy of needs”:

His hierarchy of needs centers around 5 components (my poor summary here that doesn’t do justice to the quality of thought Dan put forth):

  1. Stage of the company - how mature is the company? Larger companies have structure and need people who are able to work in that structure; startups range from “just get this product out the door” to “we need to add process and documentation to the way we do things around here” — which environment will you thrive in?

  2. Team and culture - who do you work with? Who are the founders, who comprises the rest of the team, and what’s good and bad about the culture?

  3. Metrics - how is the company doing? Are they growing “fast enough” for the stage that they’re at? Are they “profitable enough for the stage that they’re at?

  4. Role - what exactly is your day-to-day? Is it aligned to what you enjoy, what you’re good at, and what’s valued at the company?

  5. Compensation - how much do you get paid?

Picking a startup requires working from the bottom of the pyramid toward the top, such that you avoid optimizing for e.g., compensation over the role over the team/culture.

How to choose a COMPANY

Adapting the above beyond startups, I think the order goes:

  1. Hard-and-fast filters/limitations - Here, I place any must-haves you have for e.g., industry, location, working norms (e.g., remote vs. in-person), minimum compensation amounts, etc. Essentially, this is the “weed-out” stage at the level of the job description.

  2. Stage - Nothing to add here, though we can now broaden the aperture to run from “two people working in a garage” through public megacaps.

  3. Team and culture - I’ve learned (the hard way) that the quality of the team is the most important factor in determining your day-to-day enjoyment; determining how well you mesh with your coworkers and manager(s) is critical for larger organizations. LinkedIn stalking several employees at the company can be a good start here, but it’s also important to hear from folks in their own words about the company culture. I especially like asking employees (as inspired by a friend) who they respect within the firm and why they respect them. Finally, I’d recommend focusing on talent density, not talent mass.

  4. Company outlook - Like startups, you should care how a company is doing, but unlike startups, larger companies (especially public ones) often have much more data available to gauge their performance. In addition to just searching for news on the company, if the company is public you can see the stock market’s valuation as a solid proxy for the overall opinion on the company’s financial future and recent movements (say, over the past 12 months) to gauge if the trend is positive or negative.

  5. Role - Once again, it’s important to evaluate your day-to-day (in terms of alignment to what you enjoy / what you’re good at / and what’s valued at the company). I’ll also add here though that there’s an element of how the role aligns to your future goals - if you’re trying and failing to switch from a non-technical role to a highly-technical one, then perhaps a baby step toward that direction is helpful.

  6. Compensation - how much do you get paid?

    From the original article: “So of course it is worth paying attention to comp, and to maximize it when all else is equal. But if you stick with startups long enough, the majority of your comp will come from equity, and that is mostly determined by how well the company does and how well you do within it. That’s why comp is last on the list.” Here, your compensation may not come from equity necessarily - but I’ve found that happiness from compensation is mostly a threshold function; you’re either making enough to be happy with the compensation or you aren’t — and if you’re fine with the compensation, you won’t think about it on a daily basis. Assuming you filtered out at the first stage roles that will never pay you enough to be satisfactory, this should merely be about getting the most compensation from roles that you’re already going to enjoy.