The purpose of this guide is to give you a foundational understanding of your chosen industry: Start-Ups & Entrepreneurship. Read this all the way through, and you will be well positioned to demonstrate your interest and industry knowledge to peers and employers. Remember, this is not an exhaustive guide, but will serve as a strong starting point. Be sure to do a bit of extra research on your own to stay up to date on the latest start-up trends and to keep building your industry knowledge.
1. Industry Overview
Start-ups exist at the intersection of finance, tech and marketing, as aspiring entrepreneurs set out to change the way we use technology (typically) at home and in the workplace. As technology has changed and improved, start-ups have grown and, in many cases, taken over their respective fields. Some of today’s largest companies – Google, Facebook, Twitter, and more – started out as small start-ups and grew to the multi-billion dollar corporations they are today.
A start-up is a temporary organization designed to search for a repeatable and scalable business model. They will typically look for ways to utilize technology to grow as quickly as possible. The work is often fast-paced and start-up roles vary from software development to marketing and sales positions.
Company types: What do they do? Who do they do it for? And why do they do it
Start-ups exist in nearly every industry. Start-up companies like Spotify and Pandora provide audio streaming, while Wag by Wag Labs Inc. connects busy pet owners to dog walkers, groomers, and pet sitters. What all start-ups share, however, is the desire to revolutionize their industry.
Start-ups are not the same as small businesses, and they are not just a small version of a large company. Small businesses are independently owned and operated, organized for profit, and not dominant in their field. Unlike a start-up, a small business does not intend to disrupt or drastically change their industry.
A large company is a “permanent” organization designed to execute a repeatable and scalable business model. Companies operate in a way that will maximize efficiency, which can often restrict their capacity for innovation. While a start-up aims to grow into a large company, it has more freedom for innovation and experimentation as it develops its product and business model
2. The Job Market
Market outlook: Who's hiring?
Following the “dotcom boom” of the 1990s, the start-up sector slowed a bit in the early 2000s, but has picked back up in recent years with companies like Uber, Snapchat, and AirBnB. The Bureau of Labor Statistics reports that the number of start-up firms has grown from 326,091 to 415,226 since 2010, while the sector has gained 1.7million jobs between March 2016 and March 2017.
As mentioned, the positions at a start-up company can vary significantly. Even within positions, an employee at a start-up will often take on a variety of responsibilities at their company, ranging from sales, to customer service, to marketing, and more. More than half of employees at start-up companies in the US are younger than 30, and many say they enjoy close contact with the company owners and CEOs, the opportunity to take on more responsibility, and that they can see the impact of their work.
Roles, career paths, earnings and work-life balance: What can I do?
Product Manager: Product managers oversee the development of their company’s product, from idea to purchasable commodity. They are expected to be capable of market analysis at high levels and to demonstrate mastery of critical thought processes. Product developers must identify the need for a product on the current or near future market and identify an outline in which the product can be created and delivered. They are responsible for facilitating communication among relevant internal personnel and relevant external parties.
Developer: Developers build and create software applications. Depending on the number of employees at the company, a developer may be responsible for the research, design, programming, and testing of their company’s product. Developers are typically proficient in at least one programming language and may work on a variety of platforms. Developers may also be referred to as a software developer, mobile developer, web developer, etc.
Sales: Sales representatives sell products and services for a company, either directly to consumers or to other businesses. These representatives often have goals which must be reached, and commission may be offered based on sales performance.
Business Development: Business development reps seek out and build new business for their enterprise. This not only involves finding new clients for existing applications of an organization’s goods and services, but also finding entirely new clientele sets who may have not initially been targets for their company.
Marketing: A marketing manager is a person within a company who supervises and helps create the various advertising or merchandising sales campaigns the business uses to sell itself and its products. A marketing manager can be assigned to a single product, a product line, a brand, or the entire company.
Office Manager: Office managers will coordinate office/departmental operations. They may be responsible for a variety of tasks around the office. These include coordinating and organizing office space, purchasing and managing supplies, tracking and reviewing budgets, maintaining office records, and greeting visitors and customers.
Salaries can range from $30 - $100K+ depending on position, experience and specific company. The average industry salary in the US is about $68,000 per year.
Good things take time, even companies. Working at a start-up can mean a lot of long workdays – and weekends – spent building your company from the ground-up. Learning to budget your time and prioritize tasks during the work-day is crucial, and can save you a lot of stress in the long-run.
A typical career path may look like so:
- Business Development Representative
- Sales Representative
- Product Manager
- Development Director
- Executive Director
Academic, hard and soft skills: What do I need?
Graduates looking to work in start-ups will typically need a bachelor’s degree in a related field, such as business, economics, and marketing. For design and development roles, undergraduate degrees in computer science or related fields are ideal. Many schools have hands-on entrepreneurship programs, as well, for the aspiring start-up founder.
According to US News, some of the best schools for undergraduate entrepreneurship programs include:
- Babson College
- Massachusetts Institute of Technology
- Indiana University
- University of California - Berkeley
- University of Pennsylvania
You will need to show:
Marketing and Sales Knowledge - A start-up needs to build a client base for its product, and you will need to effectively market your product through business development and marketing campaigns. As roughly 75% of start-ups fail, building and growing your consumer base will make or break your company.
You're a Self-Starter - Start-ups are typically small companies, which means they may not have the resources to invest into training new employees. It’s important that you can self-motivate, learn on the go, and prioritize tasks on your own.
Commercial Awareness - You constantly need to be ahead of the curve and aware of current industry trends. Knowing what businesses and consumers are looking for is key to building a successful product.
IT Literacy - The start-up sector is intrinsically connected to technology and engineering. Knowing how your software works is essential to growing and maintaining a strong client base.
Communication and Public Speaking - Attracting investors is important in the early phases of a start-up. To do so, you will often need to prepare a presentation about your product, how it will make other businesses more efficient, or how it will make consumers’ lives easier.
3. Industry Knowledge: Things you should know
Terminology: What terms, phrases and concepts should I know?
Burn Rate: The amount of money a company is spending or losing per month.
Exit Strategy: The method by which an investor and/or entrepreneur intends to “exit” their investment in a company. Common options are a buyout or an IPO.
Freemium: A combination of free and premium; users get basic features at no cost, and can access richer functionality for a subscription fee. Examples of freemium services include Spotify and Slack.
Hockey Stick: The ideal revenue forecast for a start-up, demonstrates fast growth and a high return on investment.
Incubator: A company that helps new and start-up companies develop by providing services such as management, training, or office space.
Initial Public Offering (IPO): The first time shares of stock in a company will be offered on a securities exchange or to the general public. At this point, a private company turns into a public company.
Launch: Announcing your company is open for business. Your launch is about investing in getting your story out into the marketplace in a powerful, differentiated, memorable, and unified way, so you can connect with stakeholders, grow your business, and scale your company.
Low Hanging Fruit: Doing the simplest or easiest work first or targeting that which is easiest to achieve.
Minimum Viable Product (MVP): The most pared down version that can still be released. The final version of the product is often released after considering feedback from the product’s initial users.
Opportunity Cost: The loss of potential gain from other alternatives when one alternative is chosen.
Pitch Deck: A brief presentation used to provide a quick overview of your business plan. Usually used in meetings with potential investors, customers, partners, and co-founders.
Return On Investment (ROI): The money an investor gets back as a percentage of the money he or she has invested in a venture.
Runway: The amount of time a company can survive if its income and expenses stay constant.
Seed Money: The first official round of financing for a start-up. At this point, the company is usually raising money for proof of concept and/or to build a prototype.
Shareholders' Agreement: An arrangement between a company’s shareholders describing how the company should be operated and the shareholder’s rights and obligations.
Software As A Service (SAAS): A way of delivering centrally hosted applications over the internet. Sometimes called web-based software, on-demand software, or hosted software.
Sole Proprietor: The person who owns a business and is personally responsible for its debts.
Valuation: The process by which a company’s worth or value is determined. An analyst will look at capital structure, management team, and revenue or potential revenue, among other things.
Hot topics: What topical happenings should I be able to discuss?
Growth Hacking: Using knowledge of product and distribution to find ingenious, technology-based, avenues for growth that sometimes push the bounds of what is expected or advised.
Market Penetration: The percentage of a target market that consumes a product or service. Market penetration can also be a measure of one company's sales as a percentage of all sales for a product.
Intellectual Property: Creations of the mind, such as inventions, literary and artistic works, designs and symbols, names, and images used in commerce.
4. Resume & Interview Preparation: Things you should do
Resume content: How can I make my skills, experiences and interests count?
Joining on-campus Entrepreneurship clubs are a great way to connect with other aspiring entrepreneurs and to show your dedication to starting a successful company. Joining a club connects you to current students and alumni with shared interests and valuable insight. It’s like LinkedIn in real life.
Social media is a modern way for employers to check out candidates before they have even spoken with them. Make sure that you share relevant content and engage in debate surrounding hot topics. Be sure to keep your online profile up to date, and stay informed on industry and market trends. The timing of your product launch can guarantee its success or failure, and being able to understand and anticipate the market will be an invaluable tool for your success.
Interview preparation: What interview questions do I need to master?
- Why do you want to work in a start-up vs. a large company or a small business?
- Do you have any favorite start-ups that have emerged relatively recently? What is the company and how did their project impact consumers?
- Be prepared to think of a product idea or a marketing campaign for both a fictional or real-life company of the interviewer’s choosing. Go into details on how and why it would be a success, intended client base, and projected ROI.
- What are your long-term career goals?
- What do you know about our company and our work?
The Social Network - This movie documents the beginnings of one of today’s biggest companies, Facebook, which started out as a start-up in 2003. The film serves as a cautionary tale, as well, as Zuckerberg faces personal and legal conflict with friends and colleagues throughout the film.
Startup.com - This documentary follows a start-up called GovWorks.com. A must-see for anyone who wants an inside look at the earliest stages of a start-up. The film depicts the young company-founders, as they attempt to grow their idea into a revolutionary business.
Four Steps to the Epiphany: Successful for Products that Win by Steve Blank - Steve Blank is recognized as having started the Lean Start-up Movement. His methodology recognized that start-ups require a different set of processes and tools to be successful, and identified the issues of treating them as a small version of a large company. Blank’s book draws on these insights and his experiences as an entrepreneur in the dotcom era, and is a must-read for any aspiring entrepreneur.
General Magic (2017) - General Magic is a documentary about a business that Forbes described as the "greatest dead company in Silicon Valley." This documentary follows a team of Mac, Android, and eBay creators and developers as they attempt to create the world’s first smartphone. This story is crucial in understanding how even an idea like the smartphone can fail, and educates viewers on the merits of learning from failure.
"Job gains among startup firms in 2017 : The Economics Daily." U.S. Bureau of Labor Statistics. November 16, 2017. Accessed December 19, 2017. https://www.bls.gov/opub/ted/2017/job-gains-among-startup-firms-in-2017.htm. ↩︎
Nisen, Max. "Statistically Speaking, What Does the Average Startup Look Like?" The Atlantic. December 31, 2014. Accessed December 19, 2017. https://www.theatlantic.com/business/archive/2014/12/statistically-speaking-what-does-the-average-startup-look-like/384019/. ↩︎
"Startup Salaries." SimplyHired.com. Accessed December 19, 2017. https://www.simplyhired.com/salaries/search?q=startup&l=. ↩︎