Whether you are a graduate just starting out or a seasoned veteran looking for a new opportunity, a commonly asked question is “Should I join a startup or go with a big company?” They represent two very different kinds of environments. Your choice really depends on what you are looking for and want to get out of your career.
There are a number of different things to think about when you are comparing startup companies vs. big corporate organizations. We’ll help you sort through the most important aspects:
Working in different cultures
Good skills to have for each
Benefits of a startup
Benefits of a big company
How to choose between the two
What are the cultural differences between startups vs. and big companies?
The startup culture
Startups are usually founded by one person or a few people based on an innovative idea. They’re always very passionate about their idea and often start with their own money. There are many famously successful startups like Apple, Microsoft, Amazon, Facebook, Google, Instagram, and Netflix. But there are many more that failed.
Around 90% of all startups fail and 10% of startups fail within their first year.
Failure for most startups (70%) happens within two to five years.
Startups are very risky, but they also offer big rewards, if successful. This makes the working environment of a startup business very different from an established, large company. Some of the key characteristics that make startups different are:
Passion. As we mentioned before, startup leaders are very enthusiastic about their companies. They usually hire people that are also very passionate about their business. This leads to a very focused and intense group of people that work very hard, but they also tend to play hard.
Flat hierarchy. Startups tend to have very few management layers. This reduces expenses, makes them more nimble, and gives them a very streamlined decision-making process.
Transparency. A flat and smaller structure also makes information within a startup company flow much more freely. Knowledge of strategy, sales, finances, operations, and product development is much better understood across all areas of the organization.
Perks. Startups often can’t offer the high salaries and benefits that larger companies can. So, they counter with lots of perks and freebies.
The big corporate culture
While a startup culture may be dynamic and edgy, a big company will be more predictable and stable. These things are neither good nor bad, they are just different. Let’s look a some of the characteristics of a large business that make them different from a startup:
Formality. Big corporate culture has changed in recent years to be less stuffy and formal (business casual attire, open offices, and hybrid work, for example), but many large companies still have aspects that are more rigid and structured.
Strict hierarchy. Large companies have very well-defined hierarchical management structures. This is required for any company that has thousands or even tens of thousands of employees. It does offer employees many different career paths.
Top-down. In large companies, information tends to flow downhill. It moves through the management layers and trickles down to all employees eventually. While this seems less effective, it does limit information overload and keeps things more focused for each employee.
Established policies and procedures. Any large organization will have lots of processes. This means they will have many procedures and policies. This can make getting something done frustrating, but it does mean everything is done correctly and will comply with all applicable rules and regulations.
Most useful skills needed for success at a startup vs. a big company
- Passion. While you don’t have to be the biggest cheerleader for the company, being very engaged and interested in the business will help.
- Networking. Avoid getting stuck in your silo. You must be able to mingle and make connections outside your area. Otherwise, you will be pigeonholed in your position or dept.
- Communication. Having an effective, flexible, and persuasive communication style will greatly aid your success within a startup.
- Understanding politics. Every company has them. In order to get ahead in a large company, you have to know the players and how everyone operates.
- Collaboration. Startup companies are very dynamic and heavily rely on people working together extremely closely. Otherwise, momentum is lost and can spell doom for the business.
- Making yourself known. It’s easy to get lost in the background of a large company. Speak up in meetings and let people know who you are and that you know your stuff.
- Initiative. Going after new challenges and opportunities will get you recognized and rewarded.
Now that we understand the different work cultures of startups versus big companies, let’s talk about the benefits of both.
Benefits of working for a startup company
With high risks come high rewards. But what’s so good about working for a startup company? Some of the pluses include
Direct impact and higher satisfaction. Being part of a smaller team with a less formal management structure means you can have the ability to directly influence decisions and outcomes. This can give you more of a sense of accomplishment and engagement with the company.
Innovation. Startups place a very high value on creativity and initiative. If you thrive in an environment where new ideas and radical changes are welcome, then a startup is a good place for you to be.
Growth and development. In a startup company, you will likely have to wear more than one hat and shift gears quickly. This will give you the opportunity to grow lots of skills fast. If the company takes off, then you will also have options to advance and further your career.
Flexibility. The schedules and working hours tend to be more flexible in startup businesses. They are usually more open to working from home and remotely. You may have to work a lot of hours, but they may offset this with shorter work weeks, unlimited vacation time, bonuses, or a combination of these things.
Improved working relationships. Working with a smaller group of people will allow you to create closer and stronger relationships. This benefits everyone in lots of ways like camaraderie, team cohesiveness, and a more relaxed environment.
Big money - maybe. New startups always hope to strike it big. Most don’t, but when they do, it can be a really huge payoff. If you are willing to take the risk, then getting in on the ground floor can lead to gigantic rewards.
Benefits of working for a large corporation
A big company may not be as exciting or flashy as a startup, but working for a large, well-established organization does come with some significant pros. Here are some of them:
Security. While no job is guaranteed, working for a big company in a stable industry will give you a much higher probability of the company staying in business and of you maintaining a long-term job.
Money (initial and long-term). Big companies are in a better position to offer you a good starting salary and lots of benefits. You’ll get this from day one, and on a continuing basis, versus hoping for a big payout at some undetermined time.
Specialization. Large companies with lots of people and lots of roles will have more types of jobs that focus on specific things. This can allow you to gain deep knowledge in a specialty area.
More resources. Bigger companies have bigger financial resources, which means more of everything. Things like inventories, supplies, equipment, facilities, and more. This also gives them the ability to invest quickly in new projects.
Training and mentorship. Similar to other resources, big companies have more people to train and more people that can provide guidance. This leads to more access to training and to senior employees that can give you expert advice.
So, how should you decide between a startup vs a corporation?
We’ve given you information about the working environments as well as the benefits of startups and big companies. It’s a lot to take in. How can you make a choice? Below, we’ll give you some questions to assist you with making your decision.
Going with a startup means you are accepting some risk. If the company goes belly up, can you handle that financially and personally?
Startups have to react quickly and adjust their strategies and operations on the fly. Can you roll with rapid changes easily?
Work schedules at a startup can be hectic and erratic. Are you willing to change your working hours around often or repeatedly?
Smaller companies and especially startups require people to perform different roles. Do you enjoy doing many things and switching responsibilities?
Big companies have large HR departments that can offer training and mentoring for employees. Startups will not have robust HR services like these. Are you willing to forego training and mentoring opportunities?
If you answer no to more than one of the above questions, then you may want to consider a big company. However, the benefits of a startup may be strong enough to overcome your no answers. Take this all into account and make an informed decision. Then go for it!
Startups and big companies have very different work cultures
Both have positives
Consider what you are looking for in a job and career
Choose the best one for your needs