Career success hinges not just on skills but also on the right environment, particularly early in one’s career. Numerous articles, like “How big is the role of luck in career success?” from The Economist (2023), stress this, highlighting that while consistent performance ultimately matters, seizing early responsibilities accelerates development.

The capacity to tackle stretch assignments largely depends on the company you’re in. Therefore, improving your career prospects relies heavily on identifying a great company. Having been fortunate early on, I aim to formalize the lessons learned and empower both you and myself to make informed decisions moving forward.

Factors determining company success

Today, from my perspective, four key factors heavily influence a company’s performance, success, and consequently, your individual opportunities. I’ve encapsulated them in a Venn diagram, which I’ll delve into further below. The aim isn’t to cover every aspect exhaustively but to furnish you with guidance for conducting your own due diligence.

Market Potential:

The Total Addressable Market (TAM) of a company refers to the total potential revenue opportunity available in its target market. Understanding the TAM is crucial because it sets the upper limit for what a company can achieve. For instance, if a market generates $10 million annually, the maximum potential for a venture within that market is $10 million per year if it captures 100% of it. Conversely, in a $10 billion market, even capturing a tiny fraction, like 0.1%, could still yield a $10 million per year business.

The significance of TAM extends to your career growth within the organization. Without substantial growth potential, the company may offer limited opportunities for your advancement. While a business with a smaller TAM can still be successful and profitable, your chances of reaching senior leadership positions, such as Senior Vice President, leading large teams, may be restricted.

In summary, prioritize companies with a sizable TAM and robust overall growth rates. Accessing relevant data, often curated by reputable sources like Gartner or IDC, can assist in evaluating TAM accurately.

Management:

Understanding whom you’re working for is crucial yet often overlooked, especially by young professionals. Your direct manager plays a pivotal role in your professional development. Here’s a detailed breakdown of what you can learn from your leader:

1. Track Record of Success: Assess whether your manager has achieved success in their current and past roles. Look for evidence of accomplishments, such as meeting or exceeding targets, driving initiatives to fruition, or receiving recognition for their contributions.
2. Achievement Strategies: Explore how your manager has attained their success. Are they known for their strategic thinking, exceptional problem-solving skills, or effective leadership? Understanding their approach can offer valuable insights into what it takes to excel in your field.
3. People Development: Evaluate how your manager invests in developing their team members. Do they provide opportunities for skill-building, mentorship, or professional growth? Observing how they nurture talent can indicate the level of support you can expect in your own development.
4. Perspective on Your Development: Gain clarity on your manager’s perspective regarding your growth and development. Do they actively support your career aspirations and provide constructive feedback to help you progress? Understanding their stance can guide your efforts in aligning your goals with organizational objectives.

In summary, prioritize working with a skilled management team with a proven track record in their current and past roles. Utilize resources like LinkedIn and mutual connections to gather insights into their background and leadership style. 

Product:

To ascertain whether a company’s product can serve as a stable growth engine for your career, consider the following:

1. Mission-Critical for Customers: Assess if the product is indispensable for customers and directly contributes to their revenue generation or core operations.
2. Value Proposition: Understand the specific benefits customers gain from the solution, such as increased efficiency, cost savings, or improved performance.
3. Competitive Advantage: Evaluate how the company outperforms competitors vying for the same market share. Look for unique features, superior quality, or exceptional customer service that set the product apart.
4. Barriers to Entry: Gauge the difficulty for competitors to replicate or surpass the company’s differentiators. Factors like proprietary technology, brand reputation, or customer loyalty can act as barriers to entry.

By comprehensively addressing these questions, you can identify products that are highly differentiated, provide significant value to customers, and are mission-critical. Additionally, strive to gain a deep understanding of how the company serves its customers, and if feasible, engage directly with end customers to validate the value proposition.

Current Growth:

What you want to be looking for is a company with a healthy growth rate. What do I mean with healthy? I am referring to a sustainable business model. One where the numbers make sense for the organization in the long term. History has shown many companies that tried to outgrow their losses, but if you lose money on every additional customers, this will not work. Therefore, understand:

1. How is the company growing today?
2. What is the customer repurchasing / churn rate?
   1. In the case of one – time purchases, what are additional revenue streams the company has during the customer lifetime?
3. Is the growth organic or mainly dependent on expensive sales and marketing activities?
   1. If dependent on sales and marketing, how high is the cost for every additional EUR of revenue the company acquires through its channels? 
4. Is the company dependent on a single distribution channel and therefore fully exposed to decisions of an outside organization?

In summary, growth is a crucial factor in creating new opportunities within an organization. A growth rate of 30% in revenue, for example, often translates to similar growth in headcount, facilitating the creation of management roles or project responsibilities across various divisions. Therefore, prioritize companies with sustainable growth models for long-term career prospects.

What does a great opportunity look like?

In an ideal scenario, you’d land a job in a company where all the crucial factors align seamlessly: a vast market potential, coupled with a skilled and invested management team, working on a highly differentiated product or service critical to its customers, with already impressive growth rates. However, such a perfect alignment might be rare to find in reality.

Yet, missing components in a company can present great opportunities for you to contribute value. For instance, if you excel as a product manager and notice that product development is a weakness in the company you’re considering, this presents your chance to shine and make a real impact.

So, rather than dismissing situations where everything isn’t perfect, evaluate how you can add value. Conduct thorough due diligence to determine if the setup aligns with your goals and capabilities. Sometimes, being able to identify areas for improvement and having the skills to address them can be the key to finding the right fit for your career growth.

What if you need more insights or help?

Directly contact hiring managers from the organization, talk to headhunters in the industry, or you are welcome to contact me, I am always happy to network, hire myself or have friends who do.