Startup vs. big company: Which workplace is right for me?
Startups and big companies promise different benefits. Startups are new and unproven, but can offer enticing possibilities. They hope their product or service will change the world, or at least succeed enough to get it to a public stock offering. The big company has been around for a while, and offers a certain amount of stability.
There’s much to consider in answering the startup vs. big company question, but we’ll help you sort through the issues.
Not all startups are alike, but most share some common characteristics. They’re founded by one or two people with an idea they think will disrupt an existing market. They’re so passionate about the company that they might start it with their own money and ask family and friends to contribute funds. At some point, they may solicit outside investors such as venture capitalists.
Some startups go on to great success. Amazon, Google, Apple, Microsoft, Netflix, and Facebook were all startups at one time. But there are thousands of others that have quietly shut their doors.
More than 20% of startups go out of business in their first year, 30% fail by year two, and 50% go belly up by their fifth year. Long-term success is not a given.
The high risk/high reward calculus of a startup is framed by the characteristics that are common to startup culture. Among these characteristics are:
Passionate leaders and employees
Startup founders and early employees tend to be zealous about what they’re doing. Their idea, if brought to fruition, could possibly solve a nagging business problem or cure a societal ill. The founders and those they gather around pour themselves into making it work. That means you’ll get large doses of enthusiasm and adrenaline, as well as some long hours and late nights.
Flat organizational structure
There’s little room — or money — for layers of management at a startup. That means that as a new employee, you might have direct contact with the CEO and other members of top management. A startup is not a democracy, but with such close contact, you can get ideas to the top faster and have a greater direct impact on the company’s fortunes.
Startup company leaders are likely to share information about the state of the company with all employees. Many convey information about finances, product development, sales, and strategy. Startup culture is rife with sharing strategies, including all-hands meetings where employees are free to ask questions and make suggestions.
Work hard, play hard
Popular images of startups revolve around the seeming laid-back atmosphere. You might find a worker nestled in a beanbag chair with their laptop, employees playing a furious game of foosball, and another riding a scooter down a hallway. Sounds pretty sweet, right? It might be, but remember that it’s all in the name of productivity. When a deadline approaches, laid-back might turn into frenzy.
Look at all the freebies
Startup culture is more about carrots than sticks. Carrots are items like free snacks, coffee, soda, and energy drinks. A big carrot is unlimited paid time off. These benefits help startups compete with big companies for workers since they usually can’t match salaries. The catch is they are designed to help energize employees to do their work.
Let’s compare the startup vs. big company cultures. If startup culture is edgy, unpredictable, and exciting, then big company (corporate) culture is the reliable and stable, if somewhat sedate, alternative.
Once upon a time, the typical corporate culture was staid and buttoned-down. Management was from the top down. You wore appropriate business attire as you worked in a fluorescently-lit cubicle. You started and ended work at a certain time.
There are some companies where that culture remains, but many have changed by taking on some of the trappings of startups. In recent years, older companies that reflect the white-collar job culture such as IBM and GE have relaxed dress codes, adopted more team-oriented methods, and moved some functions to open-office environments.
Although ping-pong tables and beanbag chairs now appear in corporate settings, not all corporate culture has embraced the startup vibe. And even those who try to mimic startup culture are still big companies at heart.
And that big corporate culture largely remains defined by a strict hierarchy, an entrenched workforce, and processes and procedures that involve operating any large organization.
You’ll find there is a policy for this, and a procedure for that, and that they’ve been in place for as long as anyone can remember. This can be frustrating if you want something done right away. On the other hand, it ensures that things will get done, and be accomplished correctly and in compliance with rules and regulations.
While big corporate culture does traditionally offer proven productivity, the multiple layers of management might make it difficult for ideas to bubble up from lower-ranking employees.
Skills for working at a startup
Beyond the business skills related to your job, there are soft skills that will help you thrive at a startup. Most are useful in any business setting, but they can be particularly valuable in a startup.
Being able to get your ideas across to coworkers is a prized asset in startups, where there might be a lot of give and take. Finding language and tone that help others quickly understand your ideas saves time. Effective communication also includes good listening skills.
Pitching in on teams and sharing work is valuable in a startup. Working together and complementing the skills and ideas of coworkers can add momentum to a project and produce a more well-reasoned result.
In a startup, there can be times when ideas don’t pan out. The ability to come back the next day and try again is a valuable requirement for the startup mindset. Maintaining a positive attitude can help push you and your coworkers through the knotty problems that can pop up in developing new products or services.
You don’t have to be singularly passionate about your startup’s product or service, but it can help. If you believe in the idea, your passion can boost flagging energy to keep going.
A willingness to take on opportunities or attack problems is welcomed in a startup. Managers often don’t have time to guide workers through each step of their job. The more you take off their plate, the more you’re likely to be rewarded.
Skills for working in a corporation
Some business and interpersonal skills that can serve you in a corporate environment include the following.
It’s easy to get siloed in a big company; you do your job with your team, and that’s it. But opportunities await throughout the organization, so get out there and meet people in other roles and departments. Strike up conversations in the breakroom or the corporate gym, or compliment someone on their slide deck presentation. Some companies foster interaction by funneling workers into common areas where proximity can spark spontaneous conversations.
Understand the lay of the land
It helps to know how your company works. What are the criteria for promotion? What departments get the most resources? As you recognize the company’s way of doing things, you can gear your work to match its practices and be a more effective team member.
Meetings are the most common way ideas and directions are transferred through a company. Speaking up in meetings is a good way to make yourself known outside your team. Making a point or asking a question in a meeting shows you are engaged and understand the topic under discussion.
Benefits of working for a startup
Startups can carry a high level of risk in almost all parts of the business, but there are benefits of working for a startup vs. a big company that can make it worthwhile. They include:
More direct impact and greater satisfaction
As a member of a smaller workforce, you might find your input has a bigger impact and a more immediate effect. You can more quickly see the result of your contribution. This applies not only to the work you do but to influencing the way the company does things day in and day out. A startup is a work in progress, and you can help shape how it progresses.
Deeper connections with coworkers
Another benefit of working for a startup is you’ll work closely with others; not only with the person next to you but those who have other roles. In a startup, the camaraderie that develops from a “we’re all in this together” attitude helps build team cohesiveness. Many startups try to recruit workers who fit into their culture so that personality conflicts don’t impede progress. While this strategy can strengthen workplace harmony, it can also limit valuable diversity in the workplace if recruiters aren’t careful.
Big financial reward — maybe
If you are willing to essentially gamble, you could score a big payday. If your company reaches the point where it sells stock through an initial public offering (IPO) or is snapped up by a bigger company, those stock options you received in lieu of upfront pay could pay off.
The problem is that your payday may come or it may not. Consider the fact that most startups fail, and if that happens the options become worthless.
Benefits of working for a corporation
While it might lack the excitement of working at a startup, there’s a lot to like about working in a big company.
Here’s a look at some of the benefits of working for a corporation.
At a big company, keeping your job doesn’t rely on the company securing the next round of funding. It should have a history of solid sales and a renewing lineup of new products or services. But that’s not a total guarantee of a job. Industries change, and companies respond by cutting jobs in one area and hiring in another.
More immediate financial reward
You should receive a heftier paycheck at a big company than at a startup. The big company can likely afford to make a more lucrative offer for a starting salary than a startup can. You’ll miss the big payday of an IPO, but you probably can buy company stock (if it is publicly traded) through the company.
Developed specialized expertise
Unlike many startups, big companies recruit workers to do very specific tasks, so you should be able to develop deep knowledge in your specialty. In accounting, for example, you might be able to dig deep to hone your skills in one area. At a startup, you’d be expected to handle a wider range of accounting tasks.
A big company has a lot of resources, from copy machines scattered throughout the workplace to the money to finance multiple large projects. You can probably find help for a computer problem with a call to your company’s dedicated information technology department. The company also should have the resources to mount massive sales and marketing campaigns to support new products and services.
A significant benefit of working for a corporation is it is pretty much sure to provide you with a full suite of insurance options covering health, dental, and eye care for you and your family.
Among a large company’s resources might be amenities such as workout areas, child care offerings, and organized activities ranging from volunteering to sports.
Opportunity for upward and lateral movement
With numerous functions, initiatives and projects going on, it can be easier for you to find other opportunities in the big company. You might have the same role on a different team, or take on a different task with a team in another part of the company.
Training and mentorship opportunities
Many large companies have policies for continuing education. They offer training in certain roles as well as workplace processes. What’s more, some have formal mentoring programs where you could be paired with a more veteran employee who can help you navigate the company.
Should you work for a startup?
So the question you might ask yourself is: should I work for a startup? Only you can answer that.
Here are questions that might help you get to your answer.
Are you comfortable with risk?
A startup is, by definition, an untested business adventure. There’s no guarantee the company will land that next round of venture funding or that its products will find success in the marketplace. Even if the company survives, it might pivot to another kind of business and not need your skills anymore.
That’s not to say you’ll have a job forever at a big company. But businesses change, and when they do your skills might not be needed.
Are you comfortable with change?
A startup has to be nimble and flexible. These characteristics are considered advantages. But that might mean working on different things more often. If you want a steadier role that has little change from day to day, a bigger company might be for you.
Do you want regular hours?
In a startup, you might have free snacks and foosball, but you’ll be expected to put in your hours (and even more hours at times) to meet looming deadlines. A product release may be coming up or a new version of the product may need work, and you’ll have to keep at it until everything is ready.
Do you prefer a defined role?
At a startup, you’ll have a role, but you might be called to work in other roles and situations, depending on what the company needs at the time. You should learn a lot about how other jobs are performed.
At a bigger company, your job will likely remain steady. There may be fewer everyday opportunities to handle other tasks.
Do you want training and mentors?
While you can learn from a startup’s leaders and other employees as you work with them, the company is unlikely to offer formal training. Big companies usually have formal training and education programs to expand employees’ skills. Some companies offer financial help to employees who wish to earn an advanced degree.
Do your homework
Before taking a job at a startup or big corporation, do some digging.
Does the startup have a promising product or service? Is there a market for it? Does it have sufficient capital? Who are the investors? Do the founders have experience in the field they hope to disrupt?
Does the big company have increasing sales? Does it have products in the pipeline? Is it in a growing industry? Is it known as an innovator? Have there been wholesale management changes recently?
Whether your objective is to land a spot in a startup’s garage office or the 12th floor of a big company’s office building, you’ll need training and education to get there.