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How to Choose a Startup Company to Join?


Warning: if you rather have a strong risk~averse personality, probably a startup company is not for you.

Disclaimer: I don’t pretend to have the expertise to predict which startup companies will succeed or fail in Japan or anywhere else. If anybody - e.g. entrepreneurs - is looking for expert level advice on this, I suggest you check with the professionals.

I will not repeat here the well~known statistics about startups survival rate, in Japan or any other country. Definitely, starting a new business, by nature, is a risky endeavor. Nonetheless, there are said to be adventures that have much better chances of success. You can make yourself the lucky one to join a potentially successful startup if you do some due diligence before giving your yes to hiring managers or recruiters.

Although the list* below is not intended to be comprehensive, it would be fair to say that it basically covers the most important indicators of a recently founded company’s success.

General technology potential: the research branch of the global consulting company McKinsey (Global Institute) has been researching the technologies with the potential to disrupt. Periodically, they have been listing those top technologies. One example is IoT (Internet of Things), which is said to have a great potential and actually is expanding to many sectors, making its market size (current and potential) really considerable. You can refer to their studies. The takeaway for our purpose (for those looking for jobs) is that you can aim at those startups that are involved with one of those disruptive technologies.

Patents: one study that focused on Europe (but basically applicable to other advanced or less advanced countries), found that, on average, a start~up is between 2.5 ~ 3.5 times more likely of achieving success within 10 years if it holds patents (at least one).

It’s very likely that the hiring startup (directly or through a recruitment agency) would promote holding a patent in the job description; but, if not; you can start your search by asking your interviewer.

The company/founder’s network: according to another study, the network of professional relationship between startups and companies can indicate the long~term potential of risky ventures. The assumption is that, for instance, there is technology or & and knowhow flow into the startup, brought by its founder or a key employee who previously worked at a successful company.

The company’s financial status: this might be somehow tricky. Let’s say, if the company with a great technology potential and entering a sector with good market size is in very early stage, it’s likely that it has not raised significant funds yet. It makes sense to prefer a company that has already secured finance for some years to come. Nonetheless, we suggest that you evaluate this with open eyes and mind and consider it together with the universe of other factors. You don’t want to miss the opportunity to join a company that today has still little money but a really great growth potential.

* For instance, being close to a major university (top university, better to say), is also said to increase the chance of an startup success (easier access to top talent and top research centers or labs). But in this post Covid era, in which teleworking seems to be becoming king, thanks to this ubiquitous online accessibility, that might be revisited.