Many young people, when they think about employment paradise, think about working at a startup. They visualise immense freedom, a cool working environment, breakthrough innovations, and the opportunity to contribute in a meaningful and contemporary way. Conversely, big corporations are thought to offer no space for creative freedom because they are seen as too rigid and conservative.
But how do startups really differ from established corporations?
Reputation vs Innovation
Since startups don’t have long company histories they rely on their innovations to stand out, which tend to make them a more attractive prospect for young job seekers. Corporations, on the other hand, have prominent back-stories and are more accomplished, often the result of multiple mergers with other firms. Despite these mergers, many companies remain operationally independent, sticking to their own developments, projects, and products. However, individual employees are still bound to the wishes and ideas of the parent company, which is one of the reasons why corporations are often thought to be stiff and over-structured.
Prototyping vs Established Structures
Startup teams need to improvise constantly. A lack of preconceived ideas means there’s is always the option to paint over the canvas and start fresh, while a dearth of fixed processes puts the focus on developing creative solutions within short time frames.
Startups flourish with an agile approach; if a product or process doesn’t deliver the required results a new solution is immediately implemented. Time or money is never squandered on ineffectual solutions, just because everyone else is using them. Time and financial constraints force startup employees to be inventive problem-solvers, unlike corporation employees who can rely on predetermined processes or seemingly inexhaustible funds. After all, necessity is the mother of invention.
Startups offer an exciting opportunity for a novice to quickly gain a wealth of experience, while also allowing them to contribute their own ideas in a meaningful way. This is especially true in young startups with small teams, where every employee contributes towards the success of the business. And while there is great freedom in a startup, there is also immense pressure to succeed. While some people thrive in this environment, it can be overwhelming for others. Conversely, corporations offer a cushion in the form of clear structures and responsibilities that gives new hires time to get up to speed.
Communication on Call vs Bureaucracy
All businesses have meetings, but at a startup, they are less frequent and shorter than traditional companies. Instead of endless meetings, most internal communication in a startup is done via productivity and project management tools like Trello, Slack, or Basecamp, which cause fewer workflow disruptions, and create more time for actual work. Unlike corporations, startups try to reduce long-decision making processes and avoid burdensome bureaucracy in order to remain agile. This approach can, in some instances, result in time wastage due to poorly managed processes and methodologies, forcing new employees to start projects from scratch.
Corporations tend to have rigid structures and clear specifications regarding workflow. Because of these structures, there is always someone who can answer questions and double check the accuracy of work. While this type of bureaucracy can limit mistakes, it can also hinder personal development.
Heterarchy vs Hierarchy
It might sound trite, but in startups, flat hierarchies rule, making it possible to have a beer with the boss after work. Except for a more relaxed working environment, startups also place a higher level of trust on employees. As long as the performance is high and the job gets done, startups will allow employees to work from home or work flexible hours. Much of startup culture has been built around trust, so much so that it has become imperative during the interview process to find employees who have the maturity to fit into this culture and not exploit the extra freedom. However, a flat hierarchy also means less structured processes for onboarding new employees.
Corporations, on the other hand, have fixed hierarchies and well-organized HR departments to make onboarding new employees simple. New employees always know who their direct superior is, and who to contact with work-related questions.
Performance vs Politics
Private networks that form within the corporate structure often make big companies brutally political. To ensure career progress in this type of environment, you have to build the right connections, making it essential to identify who has what kind of influence, and how that might benefit your career. Since it’s not always that easy to identify the actual decision-makers amidst all the bureaucratic red tape, figuring out the process can waste a lot of energy.
Startups tend to focus more on performance – things have to be dealt with quickly, leaving no room for internal political dissonance. Small teams rely on the collaborative work of individuals, so instead of going to lunch with a “decision maker”, employees focus on actual work. This focus on individual action means that no-one can take credit for work they have not done. This also means that there is nowhere to hide your mistakes or failures.
Risk vs Safety
As attractive as the speed and agility at a startup can be, it can also be quite unsettling. Since priorities are continuously reviewed, today’s top priority task could be deemed irrelevant by tomorrow. If a strategy is unsuccessful, it will be discarded. This also means that jobs aren’t as secure and job roles can become obsolete. Corporations, by contrast, tend to play it safe and plan everything long in advance, broken down to the smallest detail. Employees often know precisely what work they will be doing, usually months in advance.
Startups also have a fair amount of financial uncertainty since they depend on external investors during their first few years. If a startup fails to generate revenue to sustain itself, or if it fails to obtain additional investment capital, then jobs are on the line. Additionally, full-time contracts are rare since job-hopping is common, with salaries usually well below market value.
Corporations don’t only pay more, but are able to offer additional benefits like bonuses and car allowances. For those who are averse to risk or who may need to take care of a family, corporations can offer a level of job security which most startups cannot offer.
Working at a startup differs fundamentally from working at a corporation, with both having advantages and disadvantages. When considering positions at either, it is important to be aware of what environment you are best suited to.
At a startup there are often better opportunities to develop than at corporations, but it also means that new employees often immediately get responsibilities that would otherwise be given to an entire department. The good news is that mistakes are easier to forgive and sometimes even encouraged at startups as long as something can be learnt, whereas in a corporate environment errors can have far-reaching consequences.
The question that all prospective job hunters have to ask themselves is if the startup environment sounds overwhelming or does the challenge fire them up? The answer will vary from person to person, depending on individual character and personal goals.