How to Recognize a Good Business Personbkr1_2k (237627) writes "A recent Slashdot article implied there was some way to "know a good programmer". I disagree with the premise of the article, but that's not the point of this article. This article was inspired by a response to one of my comments about how to tell a good business person when you're looking at working for a startup or young company.
First, since I'm writing this primarily for Slashdot, my credentials. In short, my credentials are no better than anyone else's. I have worked primarily for large companies. I am an electrical engineer with a background in linguistics prior to my technical career. I have been a program manager on small programs and a technical lead on some of those as well as working very large projects. I have never been a "hiring supervisor" but I have managed people both in the military and out. I have taken some business courses focusing on starting technology businesses and I have started several small companies, the most recent of which has promise if I can keep my team motivated.
So what does it take to recognize a "good" business person? How can you tell if the management can take that floogelbinder and make it the next iPod? What are some key aspects of management that you can tell during an interview that will give you insight whether or not to take the risk and invest your time and your career in this ragtag group of upstarts?
We've all worked for bad managers. Some of us have been lucky enough to work for good managers. That's the first place to start. What are key elements to good management that you can glean from an interviewer? Obviously you can see true communication skills during an interview, but can you see time management? What about delegation of tasking and authority to evenly distribute the work load? Can you see humility and willingness to accept different approaches for problem solving? Can you see real planning and long-range vision? While these are important aspects for a good working environment, they may not be able to tell you whether or not the management team can parlay ideas into successful products, even if you can determine them during the interview process.
A business plan is crucial to successfully getting a startup from idea to reality and it will have several key aspects that you can find out about with some simple questions. If you can get a hold of the full plan for your reading pleasure, do so. That's unlikely so here are the major things to think about in a business plan and some things that will tell you how much thought has gone into the business side of an idea rather than just the technology side of it.
Company focus- does the company have a cohesive vision to guide them through the turmoil of initial startup? Not all companies have a mission statement, and some don't need them, but they are very helpful for providing a direction when things start to flounder, as they always do. How will management refocus attention and re-motivate employees when the going gets tough?
"Milestones"- where is the company with respect to attaining its final objective? Have they reached certain short-term milestones? What are the near-term milestones they have planned for and how are they going to meet them? What are their long-term milestones? IE do they have a 3 month plan, a 6 month plan, a 1 year plan, a 5 year plan? Milestones are technical as well as fiscal but both should be considered when you find out about this. Consider if they can realistically meet technical/marketing/etc goals with the staff they have (or forecast having.) Are they overstaffed because they feel flush with VC and will therefore overrun budget? Does their apparent size or forecast size match up with your technical opinion of what is required?
Products & Services — what is their product? Is it a single idea, or a family of products with room for growth? Is it a piece of equipment for sale or is it software? If it's hardware, what are their plans for full-rate production? If it's a service, have they planned for a reasonable rate of growth? Have they planned for an explosive rate of growth? What about customer support?
Underlying Technology — is it cutting edge or run of the mill? Is there room for growth in the technology? Is there a big competition from similar technology (who wants to say they were on the betamax team?) If there is competition, how do they plan to win? (Remember, Betamax was a better product from a purely technical perspective, so that's not a good enough answer.) Will it have to integrate with other technologies or will it stand on its own? Do any supporting technologies need to be created to make theirs viable?
Market Analysis — similar to the competition of other technology, what is the competition already in the field for their direct technology. (If you're planning a shipping company you need to consider FedEx and UPS etc.) What is their market? Who is the target demographic they are trying to reach and what are their secondary markets? What are the financial numbers they're considering? Eg is the market $100k per year or $100M? Are they saving someone money or expecting to "create" a new market? (Saving someone money is much more likely to be a successful product.)
Business model — Are they planning product sales, licensing, services, or some hybrid of these? Have they considered the pros and cons of each model? What are the pros and cons as they see them? (How do they compare to your idea of what the pros and cons would be?)
Sales & Business Development Plan — how are they going to market the product? Do they have customers already? Do they have a marketing team in place? What is the time frame they expect to meet for each major marketing goal?
Financing Strategy — are they looking for VC, employee "buy-in", angel investors, a little of everything? Have they met with any of these and what is the status of funding? Can you look at their presentation if it's ready?
Risk — what is the risk they are taking? What are the hurdles they've considered in the realm of finance, competition, and market changes (eg home builders in the USA are not building right now) and do they have a plan for dealing with those?
Timeline — what is the schedule they expect to meet for their major milestones both financial and technical?
There are several other key components to a business plan, but these are the most relevant for someone working at a lower management/employee level in a technical position. The goal is to ascertain whether or not the "business" people have actually thought through the process of creating a business or just thought they had a good idea and it would carry them. If they can answer questions about these subjects competently, odds are you've found a team that has the potential to go all the way. It's not a guarantee, but it's a lot more reassuring than those who can't answer them. One final thing to consider is that if they can't answer them, you asking questions along these lines could point them in the right direction. You can tell them to call you when they've made the appropriate plans, or you can possibly help guide the company and secure yourself a bigger piece of the pie when payday comes.
Most of the business plan information listed above comes from the course Fundamentals of Technology Start-Up Ventures from the University of Maryland at College Park and the associated textbook. I would recommend anyone interested in working for a startup take a similar course or at the very least read some books on business plans and technology start-up ventures. That way you'll have more insight into what it takes to making a business successful, or at least understand what you need to consider."