Author: Olivier Laplace

Over the years of working as a venture capitalist, I have had the opportunity to connect with and advise many talented individuals within the entrepreneurial community, including experienced tech engineers. During my conversations with numerous talented software developers, I've noticed a common trend: many of them have invested years of their skills and time working for a good-but-not-exceptional company, ultimately leading to some regret. Educated as a software engineer myself, I bond quickly with very good tech people for whom I have a lot of respect (I was frankly a mediocre software developer; hence, I respect those who can make a difference), and I thought sharing some hints on how to pick the right company to work for could be helpful to my contacts and further. 

The idea for this post came from a recent exchange with an acquaintance who had joined a company for a nice role, great paycheck, and great team but in a company that seemed, a couple of years later, to have no vision and strategy despite raising large rounds of financing at the top of the market.  

While it's natural for engineers to be drawn to a company by the appeal of "cutting-edge" trendy products and technical challenges, that alone is not enough. In my experience, software engineers must conduct thorough due diligence before committing to a company. If you are a skilled engineer, you are in high demand, so you can choose. I hope these few lines will help you choose wisely. In this article, I outline my perspective on how you, as a tech professional, can leverage some VC insights to make a more informed decision about your future employer. 

Technical Solidity: 

As a venture capitalist, I can't give you much insight into these assessments. Still, you should use this opportunity to discuss the company's tech stack and ask precise questions to assess their expertise and team competency. It is a hint when people are not precise in their answers about the product vision, the tech stack, and its evolution. Have these conversations at the team level (if you are interviewing as a non-manager) and at the Product Management level, especially if you are being interviewed in an early-stage company. Check videos of the CTO/CPO and contact people they have worked with. 

Moreover, be careful with people who seem obsessed with working with the latest framework and tech hype: it is often a negative insight. These people are "having fun building tech" but are not focused enough on finding the most effective (and cheapest) solution to their identified problems. How big is the tech team? Suppose they need 20 people at Series A to run the product. In that case, they either hired many average engineers or are building a lot of non-essential code: the product vision needs to be more explicit. 

Another important point: how are CPOs/CTOs working together? Is the CPO clearly defining the "what" and the CTO the "how"? Building a consistent product roadmap might be a challenge if there is too much overlap between them. 

This exploration is essential for determining whether the company's technical standards and values align with yours. Having this alignment is crucial, especially for a career where you might want to be focused on solving big problems and making a meaningful impact. 

Product Market Fit: 

I could provide more insights as a venture capitalist on the company's business and product side. The first key factor I would assess is whether there is a product-market fit. To break down this question, you should ask yourself who is driving the product roadmap, and what is this person's experience in product management? In some tech companies, the product vision is in the hands of the CEO (yes), especially if no one has a CTO or CPO title. Another important aspect to consider is whether the company is focused on solving a must-have problem rather than just creating something cool. This is because sometimes startups fail even after raising a lot of money due to a lack of demand in the market. A classic example of this is Juicero, a startup that went bankrupt just 16 months after its product launch despite raising $120 million for its juice press, which turned out to be too expensive and unnecessary (it was later discovered that users could easily extract the juice packs by hand, rendering the machine useless). For most people, assessing the interest of a B2C product seems much easier: would you like it yourself, would your friends buy it, and how big is the market? In reality, B2C is tough. But the best startups you can work for are those building B2B products. Assessing a B2B solution is hard.   

It's important to note that companies over-focused on growth and raising capital may overlook the importance of the product or the end-user experience. Instead, engineers should look for companies that solve real customer problems and have a clear value proposition. One way to identify this is by determining whether their customers are "burning" for the product. If the end client, especially someone who is not tech-savvy, really needs the product and is willing to testify about how it changed their working life, then it's likely that the company is solving a big problem. 

A good example is Unique, one of our portfolio companies, whose solution Pictet quickly implemented and rolled out for thousands of users internally. They were willing to take considerable risks and publicly promote the product because the problem that Unique solved unlocked massive efficiencies for its customer. Similarly, examples from our portfolio companies include Picterra and Acodis, who address significant issues for their clients across sustainability, compliance and regulation use cases. The fact that Nespresso and Roche were willing to have their logos alongside these startups shows that they are solving big pain points for these players. 

To summarise, when evaluating a potential career opportunity, it's essential to research the head of product or the CTO of the company. They may be more interested in solving technical challenges than solving a business pain point for the end client. Life is too short to work for a company, building a product nobody wants to buy. 

Shareholders Pedigree 

One last important aspect to consider when analyzing a company is to look at the Team's pedigree, including the founders and the investors. This information can provide valuable insights into the company's future direction.  

One way to evaluate the quality of the advice and support the founders receive is by examining the composition of the board of directors and leading investors. It's crucial to research the backgrounds of these individuals and determine their experience in investing in B2B enterprise software companies. Investors with relevant industry experience can offer valuable insights and connections to support the company's growth. They can also help the founders make strategic decisions and avoid common pitfalls. However, it's also important to ensure that the board members and investors do not become too involved in the company's day-to-day operations. Sometimes, too much involvement can lead to micromanagement and hinder the founders' autonomy. We've seen cases where the board members deep-dived into the Team's financials or sales funnels to a level of detail that was surprising. Usually, it did not end up well. Board members should be involved in helping define the strategy and not micromanage operations. Another factor to consider is the track record of the investors. Have they invested in many companies, and how many have been successful? Be wary of "new kids on the block" VCs with good marketing skills, as they may lack the technical expertise or experience to build, grow, and sell a company. It's essential to choose a well-advised company. 

Conclusion:  

To summarize, getting a holistic view of the company is crucial before committing to a job opportunity. It's not just about finding a trendy product or technical challenge. Instead, conducting thorough due diligence and researching the company's technical expertise, product-market fit, and investor pedigree is essential. By leveraging some investor's insights, you can make a more informed decision about your future employer and find a company that aligns with your technical standards, values, and aspirations. Ultimately, working for a company that solves real customer problems and has a clear value proposition is more fulfilling and impactful than just building a product that no one will want to buy. 

 About Vi Partners: 

Vi Partners is the longest-established Swiss Venture Capital firm. For more than 20 years, Vi Partners has been supporting innovative Technology and Healthcare companies, investing over CHF 350m in 66 startups. Vi Partners-managed funds are backed by Switzerland's most visible companies and institutions, including ETH Zurich, ABB, Buhler, Credit Suisse, Hilti, McKinsey, Nestlé, Schindler, Sulzer, Suva, and ZKB, as well as the European Investment Fund and many other institutional investors