

Working at a Startup vs. a Big Company - alex_lod
http://alexlod.com/2012/03/12/10-facts-about-working-at-a-startup-vs-a-big-company/
I’ve spent the last few weeks trying to recruit friends of mine to come work with me at my super early startup.  In doing so I’ve had to educate a lot of my friends on what it’s like to be at a startup, and why you might want to join one.  This post is a summary of all that advice.<p>My hope is that I can inspire more people out there to quit their job at Google, Facebook, Microsoft, The Man, and join a startup :).
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j_baker
For starters, the article is mistitled. A more accurate one would be "10
opinions About Working at a Startup vs. a Big Company". Although "platitudes"
might be even more accurate than "opinions".

But there's one thing in particular that annoys me here:

 _And by the way, if you’re a good engineer you’ll have zero issue finding
another job. Zero._

You'all have zero issues finding a new job if you're a good _interviewee_ ,
but not necessarily if you're a good engineer. I know lots of people (myself
included) who are at least decent engineers but _terrible_ interviewees.

~~~
alex_lod
I'd hire you if you were a good engineer but not a good interviewee :). My
hope would be that a good interviewer can see through an interview in the same
way that a good teacher gives good grades to good students, not good test
takers.

~~~
diego
If you can tell that a bad interviewee is a good engineer, you've cracked the
elusive interview code that everyone has been trying to figure out for
decades.

A teacher has an ongoing relationship with a student, so time is on their
side. An interview is the opposite.

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jasonkester
Startups are a fun place to work, but don't fall for the fallacy in point #8
(the only one in the article that's wrong).

Your market value is your market value. Sure, a startup will ask you to take a
pay hit, but that doesn't obligate you to do so. Having "good people" is way
more important to a small team than a large one, so if you fit that
description you absolutely can negotiate a good bill rate. You'd be silly not
to, since they definitely need you more than you need them.

If they make grumbly noises, be sure to point out that you're happy to trade
in your lottery tickets for a competitive wage. As has been discussed here
endlessly, startup employee shares are pretty close to worthless even in the
best case. Tell them they can keep them, but since they're hiring real
computer programmers they're going to need to pay a real computer programmer
salary.

~~~
emmett
Your compensation for any given job can be broken down into an equation that
looks something like:

Compensation = Equity + Salary + Bonus + Benefits + Training + Credentialing +
Interest Level of Work...

Clearly some places (Academia, for example) pay you mostly in Training,
Credentialing, and Interest level.

Big companies pay you almost entirely in Salary and Benefits.

Hedge Funds pay you mostly in Bonus, with some Salary.

Good startups pay you pretty good in Salary, and pretty good in Equity.

Great startups pay you almost ENTIRELY in equity on a percentage basis,
because that's the part that makes you rich (Google, Facebook, ...) Of course
it's hard to tell if you're working for a great startup ahead of time.

~~~
aaronblohowiak
Startups that start off being run by well-intentioned people you trust can
turn into places with management that has no problem diluting or otherwise
devaluing your equity.

Also, most startups use a little trick: they tell you that your equity is
enough to make up for the difference in salary. Some of the clever ones will
even do this using the valuation at the last fundraising event. VCs will agree
that startups are a risky investment, and they seek 10x return on their
investment because most of their investments fail. If you know that most
investments fail, then you should really be compensated at a risk-adjusted
amount of equity (ie: you should get waaay more equity at the current
valuation than the discrepancy with the market rate to compensate you for the
risk that the equity will be worth 0.) Additionally, there is the chance that
after starting employment you discover the personality fit isn't there or you
otherwise have to leave before the first year is up; if you don't reach your
one year anniversary you take a 100% loss on the income discrepancy because
you have no equity. To add insult to injury, you ARE NOT BEING GIVEN THE
AMOUNT OF STOCK IN YOUR PACKAGE; an "option" is just the right to purchase at
a set price. So really, people are "paying" you the difference between the
current valuation of the company and its future growth, so you are getting a
much worse deal than the last round of investors.

~~~
emmett
Equity is not a sure thing, by any means, but it's worth _something_. And that
something means that on average startups will pay less salary than big
companies.

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greyman
I don't think #1 about where you have bigger impact is universaly true.

I worked in BigCo on a big (and commercialy successful) software project used
in hospitals. More than 1,000 people (soft devs, QM, sales&marketing) are
employed by BigCo to work on it. Even when I contributed less than 1/1000 to
the project, I believe my contribution to the world is still quite big, since
the software is deployed to 10,000's of hospitals and assist with (sometimes
life-saving) procedures every day.

~~~
chauzer
That's true. But personally, when I think about the impact I make at a startup
vs at a bigger company, it's how far away are you from that direct impact.

I think with anything, you can somehow relate it to making an impact in the
world. I could say working at a consulting company who's on a project for a
car manufacturer, on a project that improves the data quality of owners of
cars - i'm making an impact because with better data, people are getting the
right information / advertisments for cars that are right for them, thus
improving their lives by helping them choose the right car. Obviously, this
employee is many layers away, but he could still say that he is still making
an impact in some super small way.

I think it really is just up to the individual to see what they believe is
enough of an impact for them personally.

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PakG1
I think this paints a too rosy picture and doesn't nearly touch on all the
startup horror stories that can exist, especially for points from #4 to #9.

This post speaks well about startups done right. It barely says anything about
startups done wrong. Likewise, although the examples are much fewer, there are
big companies done right and big companies done wrong.

~~~
alex_lod
Very good point. I suppose I've only worked at startups that have done very
well (Redfin, Cloudera), hence the bias here. While we're here, though, could
you share some of the negative parts of working at a (failing) startup, apart
from the obvious: you're out a job?

~~~
edwinnathaniel
There are plenty negatives! but such is life when things didn't go your way
right? (^_^)

It takes toll psychologically. There's that nagging feeling that "had they
listen to me, we wouldn't fail this bad" for a while depending on how
slow/fast you can move on.

Wasted [time & money]: you lose money, you lose time. Could've done something
else, build a career, street-cred, resume, and do something else as well.

The positive part of working at a failing start-up is about opening your eyes
that start-up isn't as glamour as what people perceive it to be. It makes you
not wanting to work for a start-up ever again unless it is yours. So I'm not
saying it kills your entrepreneurial spirit, but it does kill your youth-risk-
taking-high-flying mind.

~~~
chauzer
It might be wasted time & money, but i think most people who are willing to
join startups probably believe in the idea and hopefully are passionate about
it. Thus they're doing something they love and are hopefully happy, during the
time the startup isn't falling apart at least. And also at startups (if run
correctly), you can learn a lot in a short amount of time - technical stuff,
responsibility, dedication, how to start a company, acquiring users, etc...

Also, you can learn a lot from you failures.

So while you may lose out on time and money, you gain other things too.
Depends on if that trade-off is worth it.

~~~
edwinnathaniel
I'm not so sure if young people believe in the idea more than they just want
to work in a start-up because the media (and HN) have been painting the
negative picture of BigCo/establishment and positive, bright, and exciting
pictures of start-up.

It's almost as if people will get jeered/booed for working in establish
companies.

What do people love? Building software? you can do that anywhere though,
doesn't have to be in a start-up. I think people tend to be choosy these days:
they want to work in a company that is young, hip, quirky office
layout/design, get a lot of attention, and use cutting edge (sometime
unproven) technology.

Don't forget that there are plenty people out there that build software on
their free-time (i.e.: side projects).

I'm having a little bit difficulty to understand of what you can learn in a
short amount of time that you can't outside start-up. If the start-up moves
too fast, you're bound to cut some corner, you're bound not to use the best-
practices, you're bound to "hacked it up". I think we all have been exposed
with the Mythical Man-Month book that explains some of the properties of
software.

And if it moves in an even faster speed, I'm not sure how you can learn so
much more as you'll get tired and just go to sleep after work.

Yes, you can definitely learn a lot from failures, assuming you know what went
wrong. Not a lot of people know what went wrong though. Some people would
stick it to "bad luck" as oppose to "we don't have enough skill to pull it
off".

There's some truth to the old wisdom of learning from failures, I'm not
dismissing any of it. There's that difference between actually experiencing
the failure and learning from other people's failure. Sometimes it instils
discipline and better work ethic.

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dtennant
I know this is a startup biased crowd, but the claim that this is a comparison
article is pretty thin.

I'm not going to claim that working for a big company is the perfect solution
for everybody, but it has some great advantages. My favorite is that I can
actually be just a software engineer and not an engineer/tech support
rep/sysadmin/manager/etc. I actually think I spend more time on technical
challenges at a large company than I did in my time at a startup.

I also think that point #10 is really dependent on the company. Is working at
a social gaming startup really "being part of something bigger than you"? If
you work at a company and you believe in their vision, that's way more
important than the size of the organization.

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dmd149
Funny that you posted this today: I just wrote a blog post titled "Entry Level
Start-Up Job or Entry level Big Company Job + Side Project."

[http://dalethoughts.com/2012/03/entry-level-start-up-job-
or-...](http://dalethoughts.com/2012/03/entry-level-start-up-job-or-entry-
level-big-company-job-side-project/)

The combination of working at a big company while having a side project may
outweigh the benefits of working at a start-up (at an entry-level gig).

At the entry level, the pay-cut you're taking by working at a start-up can be
significant on a personal level. For someone who recently graduated college
choosing between a 40k gig at a big company and a 35k gig at a start-up, that
5k will be much more significant than an engineer taking a pay cut from 85k -
65k.

~~~
perokreco
The entry level for a new-grad software engineer is 75-100+k in US. If you are
working for 35-40k you are doing it wrong unless you chose to live in middle
of nowhere where 40k is actually a nice salary.

~~~
dmd149
I wasn't referring to an entry level engineer. I was referring to non-tech
entry level position (marketing, sales, whatever).

At 75-100k you're not losing that much happiness and stress wise if you take a
pay cut at a start-up.

If you have an offer of 40k at an established company and are taking a lower
salary (30-35k) to work at a start-up, that will hurt significantly in terms
of your happiness, stress, and your ability to pay your bills.

------
jes5199
I have to disagree with #9. In a large company, there is an HR department and
a hierarchy that balances power. In a startup, you may have to deal directly
with the personality of the founder - which can be an overwhelming and
socially bizarre experience on its own - but, worse, that opportunity can
attract sycophants and yes-men and backstabbing and all sorts of politicking
that can't happen in your minor engineering department in BigCo, because at
BigCo there's no access to powerful people, so no way to try to manipulate
them. Sure, BigCo has politics in the executive lounge, but I don't have to
hang out there.

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wbkang
> Politics

I am not sure about this. This can start even with a three-person company.
This is a gross oversimplification.

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freerobby
I disagree with the idea that startups are inherently riskier. Sure you may
only have 12-18 months of funding, but you also have much greater knowledge of
the funding situation going in. Big companies have layoffs all the time, and
as an employee you are much more likely to be kept in the dark about the
circumstances leading up to them.

------
bicknergseng
While Larry Smith isn't necessarily the best presenter, I think this article
misses or doesn't address any of the points he makes on a good vs. great job
in the first few minutes of his TED talk
([http://www.ted.com/talks/larry_smith_why_you_will_fail_to_ha...](http://www.ted.com/talks/larry_smith_why_you_will_fail_to_have_a_great_career.html)).
I would argue that none of the 10 points Alex makes in his article matter if
you don't care about what your company does. People still seem to have a hard
time understanding that the size of a company has nothing to do with the
company's mission, and forget that proximity to that mission becomes more
difficult as the company grows and the mission is diluted.

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cramaswamy
I disagree with the generalist comment. Startups have limited $$ in the bank
and want a specialist who can hit the road running. However, startups also
want someone who is willing to take on additional roles and help out in the
overall growth of the company.

~~~
alex_lod
Let's take the following hypothetic example, which by the way isn't so
hypothetical:

Your company decides it wants to build its business on mobile phones. You go
out and hire the best iOS developer you can find, and she builds the app.
Then, once you have a few thousand users, you realize that actually this app
should be a website. You pivot the company to become a website before an iOS
app. Now you have an expert iOS developer and nothing for them to work on.
You'd be in a better position to have a super awesome programmer who can (and
has interest to) learn new things.

The above example happens all the time. The earlier a company is, the more
likely they'll make big pivots.

~~~
cramaswamy
Alex - I agree with the above example, but my definition of a generalist is
someone who knows a little bit of everything - engineering, sales, marketing
etc. An awesome programmer is still a deep expertise in my opinion. But I get
your point.

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hn_reader
Thanks for the post Alex. One of the things I do like about being a developer
at BigCo is that it's possible to keep the politics at an arm's length -
something that I think would be almost impossible in a startup with a handful
of people. (Whether this kind of hands-off approach is actually good for one's
career is another matter.)

