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How I conduct due diligence on companies as a candidate

When I was looking for a job this year, I decided to take the due diligence on the companies much more seriously.

In the past, I focused on short term factors like market conditions. My assessment was right and I made money from having the correct judgement.

However, looking back at my career overall, I realized I did not assess for quality of talent; competence of higher leadership and stage of company. This impacted long term growth potential.

The quality of the company you join can slow or accelerate your career.

Working for weak leadership or a slow growing company is like moving through the sea on a sampan, while others are taking motorboats.

You can row as hard as you want but your career will never progress at the same speed.

I am in my prime years. I cannot afford to waste time by working for weak leaders. It is not respecting myself. And, every minute spent in the wrong company or with the wrong leaders is a massive opportunity cost.

As everyone is different in terms of values, life stage and industry, this is not meant to be career advice but more of sharing a general idea of how I think and approach decisions

Here are 5 of my criteria and why I chose this job.

1. High growth company

High growth companies typically do not have many incompetent people. They tend to have a high bar for attitude and aptitude.

Furthermore in such an environment, there is a low tolerance for deadweight and little place for lazy people to hide.

Just like high finance and MBB attract many of the top talents, high growth SaaS companies also attract the best. This means you get to work with and learn from many smart people. As a result, your standards will be raised too.

As high growth companies come with several opportunities, every effort you put in, will multiply and compound. This translates into greater rewards for yourself and the company itself.

In contrast, in slow growing companies or declining ones in sunset sectors, you often get a lot of people who are in retirement mode; or perhaps just not as skilled.

In my experience, a lot of the work done tends to go into compensating for free riders. I learned this when I saw an incompetent elderly man who did not contribute to my results much at all get recognized on stage instead of me.

A bulk of his performance came from me. Without contribution, his revenue number will be absolute shit.

For publicly listed companies, you can find company metrics on their earnings reports. For privates, news is the main source.

When companies are growing quickly and they are having a lot of impact, careers take care of themselves. And when companies aren’t growing quickly or their missions don’t matter as much, that’s when stagnation and politics come in. If you’re offered a seat on a rocket ship, don’t ask what seat. Just get on.

- Sheryl Sandberg, Former COO of Facebook

2. Quality of Leadership

Due to bad experiences early in my career, my expectation of what makes a strong sales manager was not high over the past few years.

I just wanted someone who give us freedom; caring to the team and does his best to remove some obstacles.

Since I am a lot better now in terms of skills and market value, I feel that now I am in a good position to choose to work for superstars.

I want to look for someone I aspire to be like and who has a stellar track record in scaling SaaS companies.

The qualities I want include: Extremely driven; can provide actionable feedback; high EQ and willing to empower me to participate in company building.

I value this so much that I can even sacrifice a factor that was important to me for several years, freedom. This meant losing my status as a remote worker to coming into office three times per week.

One of the key indicators I looked at is tenure with progression. Excluding layoffs, any RVP/SVP with several < 2 years experience in a direct sales leadership role is a red flag. It signals weak internal politics skill, poor sales strategy and execution, or both.

I also focused a lot on their track record and mindset. This due diligence process involved stalking their LinkedIn to look for evidence of the above; sourcing for testimonials from people who worked with them and listening to podcasts of C-suite of the companies.

Besides raising my expectations, I also put more emphasis on the top 2 layers of leadership in an organization versus merely my direct manager.

I have learned that your first line sales manager may be good at his job and kind. However, he doesn’t have much power.

Therefore, it is more important to “super-structure” leadership in place to make sure that you are successful and they will pick the right first line manager for you.

3. High performance culture

Having worked for a couple of years, I find that I fit best in slightly more Westernized cultures with energetic vibrant people with progressive ways of thinking.

It is important for me that my colleagues are also driven and international.

Beyond reading and analyzing Glassdoor reviews, I went for culture rounds towards the end of the interview process. Should the two companies have not offered me a culture round, I would have asked for it too.

I also spent a lot of time on LinkedIn checking up and studying existing employees.

Here are the green flags I look out for. 🟩

  • The ability to recruit strong talent who constantly overachieve their numbers (If an AE is performing you can bet they will put their track record in every role)

  • Promotions for AEs who overachieve. This shows you that this is a place that values and rewards performance.

  • Tenure + Achievement: Long tenure but minimal achievement means the people simply have no where else to go.

Here are some of the red flags I try to avoid 🚩

  • Multiple promotions and hiring of several people from the same companies or home country as the leader

  • Too many AEs hired from more old school sales environments and not modern software companies

  • Tenure: Long tenure without achievement

Another factor you can look at to assess culture is the job candidate experience. 

I turned down a startup a few times because when I met the CEO twice, he was 15-30 minutes late. It shows you a lot about how he treats people.

“Busy” is not an excuse for disrespect. Other CEOs can meet me on time and early. Plus, their company is of similar stage as yours and even more established.

Of course, there is no perfect culture in this world. The question to really ask yourself is: What are the aspects which are important to you?

4. At the right stage

At this stage of my life, I am super specific about the type of company I want.

  • I do not want to join a huge MNC right now

  • I do not want any company that is acquired by private equity or other bigger firms. Most tech company acquisitions fail and are poorly managed. There is a lot of internal politics; instability and innovation declines.

  • I want a company that is Founder-led. Most of the top tech companies today are founder-led and there are good reasons why. The quality of the founder is also key. To assess how good the founder is, I look beyond company performance and at the rest of the C-suite also to see what kind of talent they are able to bring onboard. I look at the investors. Some investors in Asia have a track record of choosing companies with cofounders of the same nationality. I avoid those.

  • I want to work for a company which is younger than <15 years old and pre-IPO because they are at their hungriest stage. Being pre-IPO also means there is a highest upside.

  • I also want to work for a company which is newly launching in APAC. This is where I can make the most impact not just in revenue but also on culture. Being able to write “grew Spot revenue by 50.5% in SEA in one year” on my resume was really something that boosted my market value a lot.

5. Strong Product Market Fit

I work in my commercial role and if I do not perform, I only bring back 50% of my salary every month.

Hence, product market fit is super important to me.

When interviewing for various companies, I did the following due diligence to identify PMF:

  • I did interviews with people who were the type of customers the company was targeting. I had coffee with three different VP of Engineering and Chief Technology Officers when I was interviewing at one of my top 2 choices. The goal was to understand PMF in the context of Asia. PMF in USA and UK does not mean PMF in Asia.

  • I read reviews of the software on G2 crowd and aligned them with what marketing was saying on the website

  • I looked at other resources like RepVue (Specific to SaaS sector)

Once again I’d like to emphasize that this is based on my own personal list of criteria as I optimize for growth and learning at this stage of my life. It is not meant to be career advice.

At this stage of my life, I do not care about work-life balance that much; company prestige or benefits. However, this might change as I enter new life stages.

Key takeaways:

⭐ Know exactly what we are optimizing for in our lives. This way we can make better decisions that are aligned to our goals and values.

⭐ Not all tech companies are made equal. As ambitious young people, it is key to choose the right environment for learning and growth. This can either be a leverage for you or drag you down in your career.

Please hit reply to let me know what you think about this issue and the newsletter so far. I would also love to hear what you’d like to see more of!

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