You will be working for the company. But will the company work for you? If you are interviewing with companies, these notes should help ask questions and know what is in it for you.
Ask to know more about product & roadmap
Use this information to understand/guesstimate if the company has the potential to increase revenue.
Ask for a product demo
- Getting to know the product in detail helps.
- Also ask for login credentials for a test account to play with.
What is the product roadmap?
- How do items get into the roadmap and how do they get prioritized?
- To check if the product development is stagnant. Busy work is bad work.
Who are the target customers now? Is the company planning to focus on other cohorts of customers?
- Use this to check/guess the possible size of market using other sources.
- For example: If target customers are small businesses that sell clothing, find other industry reports that offer insights/numbers for potential market size that this company can possibly grow to serve.
What was last year’s product roadmap and what was worked on last year?
- Helps to know how often the company changes priorities.
- If priority changes are too often, then focus gets scattered for product engineering.
It is very important to understand that product development can be a hit or miss during the early stages of a company. So some things might be in flux. Just not everything can be in flux.
Special note: Frequently changing roadmap
If the product roadmap is changing frequently (quarter/half-yearly) in major ways or if there is frequent reprioritisation, then it means there are too many conflicting sub-purposes within the organization. There can be many reasons, some mentioned below.
- Selling to bad-fit customers: A lot of deals require customization that forces trading-off already planned roadmap items. These customizations are very good if they are reusable - means sales is able to utilize the customizations to sell to more customers that need these. These trade-offs come at the cost of product stability. The more code written for specific customers, the larger and unmaintainable the code-base becomes. This in turn leads to increased technical debt and slower development.
- Lack of Product-Market fit: Company scaled to $X in revenue selling to a cohort of customers. But new cohort of customers require a bunch of other features that do not exist today.
- Lack of focus to iterate/improve existing functionality: This happens as a result of focusing too much on building new things.
Find out about plans for the role being hired for
What will be the responsibilities of the role for the first year?
- Based on responsibilities of the role and the product roadmap, decide if the role being hired for is important enough for you to work and grow there.
- For example, if being hired for as a Mobile Engineer and mobile apps are low on the roadmap, then the role is likely to be at risk in the near future after the project is done.
- If the company cannot list out work for at least a year, then the company is better-off hiring a contractor for this role instead of a full-time employee.
What are the expected responsibilities next year?
- Check to know if anyone has at least given some thought to a career growth map for this role.
- For example: I join as a Support Engineer. Is this a dead-end role? Does the organization expect that I work this role for more than two years? How am I going to grow?
Does the organization help employees upskill?
- Access to learning resources, conferences, etc)
- As an employee, I am going to spend significant amount of time working for the organization. Does the organization help me upskill in some ways?
Are there enough supporting functions for the role to succeed?
- For example: For a mobile engineer position, is the product line important? Is there a product manager assigned?
Ask details to understand ESOPs better
Someone I know articulated it better: “Salary is for today’s work. ESOPs are for stickiness”. Stickiness is what encourages an employee to stay invested in the company rather than switching workplaces after a year.
The below details are good to discuss/ask on a call, but also ensure to get these on an email to keep these on record.
What is the current FMV of the share, the Exercise Price and the total number of shares in the pool?
- ESOPs are “alloted” to you by the company at regular intervals. This is like “permission to buy”. To own these, you must buy them at an exercise price.
- People with ESOPs make money when the company is sold or goes for an IPO. To know what you would make as a “profit” in this sale, you must know the price you are allowed to buy at. This is the exercise price (or the strike price).
- You may be offered an exercise price at a discount compared to the actual market value of the share. This market value of the share is the Fair Market Value (FMV).
- FMV cannot be a random number based on what someone feels - companies generally do a 409A valuation with an auditor.
- To aid in understanding valuation, also find out total number of shares in the pool. Useful to know, what percentage you are being assigned. Check common practices for early employees and the value you might add.
- Read up on why FMV and Exercise Price are important to know. There is already a lot of literature on this.
Based on the roadmap, the market size and the competition, if you think the company will increase revenue (say 4x or 10x) in the next few years, then use these numbers to see what your upside or financial gains will be. Ofcourse there might be dilution, liquidation preferences, etc, when the company raises a round of funding. But knowing these numbers atleast gives you information to guess ballpark numbers of what you would make as a financial gain.
Does the company provide liquidity opportunities for employees?
- ESOPs are good. But if there is no way to liquidate them to cash, then the ESOPs are worth paper-money and useless. Find out what are the company’s plans for offering liquidity to employees with ESOPs.
- When was the last liquidity opportunity and who was it offered to? (Example: Employees that stayed for 2yrs, 4yrs, etc).
Does the company offer ESOPs with a 10-year exercise window?
- Guideline: Workplaces that have an exercise window of 30-90 days is a red-flag.
- If you quit the company after 2yrs, all the shares you vested must be exercised within the “exercise window” after you quit (say 30-90 days depending on the company’s policy). Else you forfeit the right to purchase the alloted shares.
- This is bad because employees might not have the cash to purchase an asset (company shares) that do not have liquidity and comes with an unknown probablity of making a profit.
- This is also bad because if you work for a company in a geography that has to adhere to “Perquisite tax” mentioned above, then you also have to pay the tax on the paper-profit that you have not yet made.
- Having a long exercise window of 10 years is a good thing, because after the employee feels his potential/peak at the company is past, they have the oppurtunity to move on and still have 10 years to exercise the vested shares depending on the potential upside.
- 10-yr exercise window is a good expectation to have. Anyone saying otherwise is probably BS-ing you. Give it a thought - do you expect to work at the same workplace for 7 years or are you more likely to get bored?
- Check companies offering that.
Special mention: Perquisite tax on ESOPs in India
- The “Perquisite Tax” means that if you are exercising (buying) shares at a lower than market value (FMV), then you have to pay tax on the difference (the notional profit).
- This government counts this as profit you have made because you purchased an asset of higher value for a cheaper price. The absolutely bonkers fact: This only applies to ESOPs.
Special mention: ESOPs as golden hand-cuffs
- ESOPs are called “golden handcuffs” for a reason. If you cannot afford to exercise the shares you have vested, the fear of not missing out on the potential profit would prevent you from quitting.
- Being able to afford to exercise large ESOPs with uncertain liquidity is a luxury that employees cannot afford in certain geographies. Especially in India, there is a “Perquisite Tax” to be paid on the ESOPs during exercise.
Checkout this Twitter thread
Special mention on ESOP buybacks
Nithin Kamath’s tweet - read his entire Twitter thread.
Does the company have an Employee Stock Purchase Plan? (applies to public companies only)
- What are the details of the ESPP?
- If the employer is a public company, they can help you purchase listed shares at a discounted price.
How many leaves do employees get per year?
- Are employees allowed to carry-forward unused leaves?
- Unlimited leaves are BS. Get an absolute number that employees are allowed per year.
- Check for maternity & paternity leaves. You may not be expanding your family. But this is an indicator of compassion.
Does the company work remote? How does the team collaborate?
- If remote work is what you want, check about it.
- What are the expected work hours? If you are uncomfortable with frequent meetings outside of your preferred/usual work hours, check about that too.
- Choosing a timezone for a globally distributed organization is acceptable. But internal meetings being setup always/frequently in a particular timezone is being biased and is a red-flag indicating not respecting personal time.
Is the company providing you with necessary tools?
- If you have to go through a week of approvals & discussion to buy a $29 tool for your team, it means the company isn’t seeing value in what you are doing.
What if you join the company and find out that the company lied about certain details?
Sunk cost. Find a new workplace immediately.
What if the potential employer is not willing to reveal details?
- They’ll find another engineer. You find another workplace.
- You are going to spend a significant part of your time/life working at this place. If you do not have enough details to judge the workplace, skip the workplace. This will save you some ache in the long run.
I spent time a few years at a workplace without these details. What to do?
- Talk to someone at your workplace and ask for these details.
- If details are still unclear after talking to an appropriate person, then probably consider it sunk cost, so find a new workplace.