I work for a well-funded startup with no traction (no users and no revenue). The company is over 9 months old, and I'm well-paid. The product is a SAAS web/mobile app. Should I quit my job before the company runs out of money? Why or why not?
Most SaaS startups take time to get going, about two years according to saastr, so it might take awhile. [1]
But a lot of really bad founders have raised money during this bubble cycle. The VCs are screaming about the market changing behind closed doors. The founder where I work was recently pressured to fire the team and sell the company.
Make sure you look after yourself. Get your interview skills up and have a list of opportunities. Don’t overcommit to 50+ hour weeks. If they want to pay you 25% more than sure, but don’t fall for the overwork peer pressure by founders who have a 20-100x equity win over you.
Make your own personal assessment of the team, product, and market, and the likelihood of success. Recognize that founders “sell” their belief and my not be honest about issues. I’d probably try to stay to the one year mark and move if you don’t have a strong belief in the company, but be ready to be dropped at a moments notice.
If you predict the company folding, make sure you have enough savings to get by a couple months. If they pay so well, that should not be an issue. If it is, deflate your cost of living. 6 months worth of living expenses in the bank account is what I'm aiming for all the time.
If I remember correctly, the average tech startup makes its first dollar at 18 months. If the company has runway, 9 months without revenue isn't the end of the world (especially if the market is big).
That said, it sounds like you have pretty good management. Ask them the exact amount of runway given today's burn rate. Ask them again every month. Also ask them to let you know when you're at ~2 months of runway so that you can be prepared.
Don't ask, just be prepared. I think asking and appearing prepared can open you up to being more likely to be let go early if there are rounds of layoffs.
Do you anticipate your company running out of money any time soon? Is it possible that your company will turn around before it does? Does it pay enough in cash (not stock) to make it financially viable to keep working there? And most importantly, do you enjoy working at your company?
It's impossible to tell for sure - if you could, there wouldn't be any failed startups... People would leave the moment they knew it was going to fail. You know more about your company than anyone else, and you seem to think it's going to fail.
In my opinion, you should do what makes you happy, even if that means working at a failing startup. That said, you should definitely keep your eye out for other jobs, but don't act on any job offers until you find one you think you would enjoy as much or more than your current job and pays the same or more. You don't want to be stuck out in the cold if your startup fails, but you have plenty of time to look around. Don't rush into anything.
As financial is a good point to consider, IMO, you should also consider more about management. How good they manage company? How fast they execute something? Are they good in doing business and have experiences you trusted?
If they're keep discussing all the time without taking real execution or they can't make conclusion fast enought. It might make sense that they will run out of cash before figured out a way to survive.
Hey, if you like it, stick with them till they fail to pay you the last month's pay check. Then at the end of it all you can all go to a bar and cry together about the whole thing. I think the experience would be invaluable to you as a person. That experience would be worth more than the reputation damage it might do to your career.[1] All you need is a four to six month's expenses in the bank account.
[1] The purpose of a career is to enable the enjoyment of one's life experiences. No point going to a grave with a great career and nothing else.
As CEO i can't recommend to do so. In most cases even when company have no traction or something can be pivoted to make revenue or gain user's attraction. Most of the employee usually can't understand this and make decisions too fast and you quitting can easily kill a startup, not lack of a traction.
Our company (Actor.im) was in such situation. And eventually we spent all our money and for a month we have nothing. During this we go open source (after advices on HN: https://news.ycombinator.com/item?id=9757243) and in a month we got our first customers and in a next year we was much more stable than before. We wasn't able to predict this. CEO have a chance (only small chance) to predict, but employee usually don't think about big picture long enough for this.
Try to think about people with whom you are working with, if you like it, stay with them. You will never regret working in dying startup with a nice people, but if you will quit...
Get out before the pressure mounts. Speaking from experience, the stress that leads up to the bust is on an exponential curve.
Worse than a bust, many SAAS startups become a regular small business with a few big clients but everyone is disgruntled because the dream of a big payday died. There's nothing wrong with a small SAAS business as long as it doesn't start with "shoot for the moon" fantasies and VC cash. This kind of "exit" will hurt your career. It's better for the entire company to fail. Your future interviewers will not see this kind of business favorably.
You could ride this out until it busts but you could be playing a game of musical chairs. If the company busts due to a problem in the greater economy, then you're stuck trying to land a job before the music stops.
Right now you have the opportunity to turn a well-paid job without stability into an equivalent or better paying job with stability. It is much harder to find a job when you don't have one. Our field is full of pretenders that are out of work. That's why people fail FizzBuzz. You risk being lumped into this category if you're looking for a job after your company busts (or the economy is down.)
Be patient. It sounds like you have a good gig going. Patience pays. Relax, work hard, but not overly so and keep working at making the product better. When it does succeed and pays back you will feel infinitely better (or feel bad you left before it took off). It sounds like this is an opportunity to have a very profound impact on the outcome. Take advantage of it as much as you can while it lasts. If it fails, I would still think that's a selling point for your next job and a great learning experience.
But a lot of really bad founders have raised money during this bubble cycle. The VCs are screaming about the market changing behind closed doors. The founder where I work was recently pressured to fire the team and sell the company.
Make sure you look after yourself. Get your interview skills up and have a list of opportunities. Don’t overcommit to 50+ hour weeks. If they want to pay you 25% more than sure, but don’t fall for the overwork peer pressure by founders who have a 20-100x equity win over you.
Make your own personal assessment of the team, product, and market, and the likelihood of success. Recognize that founders “sell” their belief and my not be honest about issues. I’d probably try to stay to the one year mark and move if you don’t have a strong belief in the company, but be ready to be dropped at a moments notice.
[1] https://www.saastr.com/if-youre-going-to-do-a-saas-start-up-...