From Big Tech to Bold Moves
How to decide if you want to work at a startup as an early career PM?
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Hey everyone 👋 we recently interviewed our friend Espen Scheuer, an early career PM at a health tech startup Nexhealth. Previously, he was a PM at Microsoft for 2 years before he decided to take the startup route. In this interview, we cover the following:
His decision to work at a startup
Framework to decide on working at a startup
Choosing a startup to work at.
The interview response have been edited for clarity
You worked at Microsoft for 2 years and suddenly decided to move out of Microsoft and choose a startup. Tell us the thought process behind that.
I've aspired to become a Product Manager (PM) at a startup since early in college. Hearing someone discuss the role back then made me realize how appealing it was. While working at a big company like Microsoft seemed enticing with its massive user base, the decision-making aspect truly intrigued me about being a product manager.
At startups, the decision-making scope is significantly broader. It's about crafting our onboarding experience and shaping features from scratch. This starkly contrasts with a company like Microsoft, where the focus might be on optimizing existing features or working on specific ones. Recognizing this difference, I knew from an early stage that I wanted to work at a startup after graduating.
I took action by applying for numerous startup positions straight out of school. However, my journey was met with rejection after rejection. Despite my efforts and even referrals, it became clear that startups were cautious about hiring new graduates due to the associated risks. This was exemplified in my experiences with Convoy, where I faced rejection for about 30 different positions due to being a new grad. Looking back now, having transitioned into a startup PM role, I completely understand the reservations that come with hiring unproven candidates.
After spending some time at Microsoft, I decided to pursue my startup PM dream. I questioned whether I had garnered enough experience for startups to consider me. I started applying again and eventually came across NexHealth. This move wasn't about dissatisfaction with Microsoft; it was simply driven by my determination to be a PM at a startup.
Do you think the 2 years of experience you've gained at Microsoft was enough experience for you to recruit with startups?
To be honest, initially, I wasn't even getting interviews with startups after college. They wouldn't consider me. At NexHealth now, we have a similar policy – we don't interview people without prior product management experience. Being a PM at a big company is quite different from being one at a small company. While I did learn some transferable skills, I think what truly made a difference was the signal my experience sent to potential employers.
The experience at Microsoft served as a kind of signaling factor. It enabled me to get interview opportunities and demonstrate my dedication, research, and enthusiasm for the company's challenges. Hiring managers need to feel that there's no significant risk associated with bringing someone new on board.
I feel fortunate that there was an opening that aligned with my background, and it seemed like a certain level of urgency. There's a fair amount of effort involved in these situations. Early in my career, I focused on conveying my strong work ethic and genuine commitment.
You joined NexHealth around Feb 2022. There were signs of market weakening around that time. Did you have any fear of joining a startup at that point?
I remember the time when I was fortunate enough to secure a job. It happened during the peak of a bull market, and the job market was extremely competitive. I received constant outreach from recruiters who wanted me to join their startups. Feeling confident, I realized that even in the worst-case scenario, I had a strong safety net – with my experience, I could always find another job.
Recruiters were reaching out to me 2 to 3 times a week for startup positions. This made me feel lucky and positioned to take advantage of opportunities. My experience at Microsoft gave me some financial cushion, so I wasn't overly worried about stability.
In the Google Doc I shared, I discussed a strategy to de-risk the situation, particularly the concern of the startup running out of funds. I raised questions about the runway NexHealth had at that time. It was common knowledge that we had recently secured a funding round of $105 million. Crunching the numbers, it was evident that the company had a substantial runway ahead. This assurance helped me ease any concerns about the company's financial stability.
The crucial question I asked was about the burn rate and the company's bank balance. Knowing this, I had complete confidence that the company wouldn't face financial troubles. Even now, I remain certain about the company's financial stability, and that specific knowledge made me absolutely certain that this was not something I needed to worry about.
Can you share the framework that you use to choose a startup to work at?
When considering a potential job opportunity at a startup, I follow a framework centered around assessing whether it's a good business and a stable environment. These aspects are interconnected, with a good business often implying stability.Â
To evaluate whether a business is good, I approach it like a venture capitalist, looking to invest my time rather than money.
When analyzing a Software as a Service (SaaS) business, I examine critical metrics such as revenue, growth rate, margins, and churn. It's vital to ask these questions during the final round or an offer stage. I benchmark against industry standards and assess the company's valuation, considering its potential worth if publicly traded. This helps gauge the business's potential and growth trajectory.
Understanding the stability of the environment is equally crucial. For this, I inquire about the company's burn rate – the monthly money spent – and their available funds. If a company has less than 12 months of runway, it raises concerns. Knowing the plan for raising more funds or achieving profitability paints a clearer picture.
When I joined NexHealth, for instance, I analyzed our financials and saw that we had a substantial runway. This fact, combined with our strong metrics, influenced my decision. I was confident NexHealth would be around for a significant time.
It's important to be truthful with yourself. Joining a large tech company often yields better compensation. In contrast, startups focus on learning and personal growth. It's unlikely that joining a startup will immediately surpass what established tech giants offer in cash compensation.
In the end, I believe that working for a startup should be viewed as an opportunity for learning and growth rather than just chasing higher compensation.
How do you decide which company to recruit for?
 I wanted to work on something high-impact, focusing on areas like climate tech, healthcare, manufacturing, and biotechnology – sectors that deeply influence the physical world. To identify potential companies, I engaged in extensive research, drawing from podcasts and newsletters like "Not Boring" by Packy McCormick. At that time, I was at Microsoft for almost two years, having recently been promoted.
While NexHealth was on my radar, I was not actively seeking a change. The company's alignment with my criteria, rapid growth, and involvement in solving significant problems caught my attention. When I applied and got the offer, I realized that this opportunity aligned perfectly with my plan of becoming a senior PM at a startup, even though I was considering this step earlier in my career than originally intended.
For those exploring similar career moves, I recommend exploring companies that genuinely interest you, whether large or small. Consider aspects you find intriguing about those companies and industries, which can provide valuable insights into your preferences. Utilize resources like "Top Startups" to refine your search, focusing on specific criteria, and delving into more information about potential businesses. In my case, this approach helped me make a clear and confident decision to join NexHealth.
Was there a mindset shift when you moved from Microsoft to NexHealth?
The transition from a big company to a startup brought about a mindset shift that I personally embraced. I was particularly excited about getting closer to the go-to-market process and collaborating extensively with marketing, sales, and support teams. While there's a mindset shift, the core qualities of a successful Product Manager remain consistent across both big and small companies. Being a good PM means deeply understanding users and doing whatever it takes to provide value to them. In my experience, this attitude was vital at Microsoft, where I found myself taking on diverse tasks, from writing SQL queries to performing mini-engineering tasks.
This same approach has proven effective at startups. At NexHealth, I'm fortunate to have my ideal PM role, spending 80 to 90% of my time engaging with customers and translating their feedback into actionable plans. This role doesn't entail daily customer support or ticket handling; instead, it focuses on turning insights from conversations into practical strategies. While there's certainly a shift in tasks, the core Pm skills and dedication to delivering value remain constant, contributing to my success in both environments.
 If you had to pick one between the founders, the problem, and funding for a start-up. What would you pick?
In my perspective, the importance of funding versus founders depends on the stage of the company. If it's an early-stage startup with around 9 team members, the most crucial factor is having faith in the founders and their ability to lead and collaborate. This trust in the founders becomes essential for the intense work and pivoting required during the early stages.
However, as the company progresses and becomes more established, the focus starts to shift. In later stages, I would emphasize the significance of the problem the startup aims to solve. While strong founders remain important, the potential upside in solving a significant problem becomes a driving factor.
I believe that, regardless of funding, exceptional founders will attract investment. Successful AI companies, for example, demonstrate this pattern by raising substantial funds due to their strong leadership. Therefore, it's clear that while funding plays a role, the founders' vision, capability, and problem-solving potential remain critical, particularly in the early stages of a startup.
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