Are you about to start your career, and are you confused about taking a startup or a corporate job? Should you join a big corporate like Shell, Nestle, Mobil or Standard Chartered Bank, or go for a startup like Stripe, Andela, or Uber?
While startups are known for their flexible and innovative culture, a corporate job promises stability and work-life balance. Both paths are different in their benefits and challenges. So, how do you pick between the two?
Don’t just look at the job position, salary, and perks, the type of organization you join is also important. The key is finding the right work environment where you can thrive.
This article will present an in-depth analysis of a career in startups and corporations to help you make a well-informed decision.
1. Definition of a startup versus corporate jobs
There is an explosion of startups in Nigeria. Yabacon Valley in Lagos is Nigeria’s answer to Silicon Valley. Young tech companies are burgeoning everywhere. As these startups attract funding, they are looking to hire more employees.
But, the first question is, what is a startup?
Investopedia defines a startup as a young company founded by one or more entrepreneurs to develop a unique product or service and bring it to market.
Well, there isn’t any solid ground to define a startup in terms of the number of employees, revenues, and profits. All these may vary between companies and industries.
According to Paul Graham, founder of Y Combinator, “a startup is a company designed to grow fast.” A startup is meant to scale quickly. ‘Unconstrained growth’ is the ambition of startups. A restaurant, florist, a franchise, or a local business are not startups.
Have you seen those co-working spaces occupied by hoodie-wearing youngsters with eyes fixed on a screen? That’s a startup. Typically, the term startup is associated with a business that is technology-oriented and has high growth potential. Thanks to Nigeria’s budding tech ecosystem, the startup community is growing beyond Lagos.
Here are some characteristics of a startup job:
In a startup, nothing is set in stone. There aren’t any best practices, policies, or processes. It’s like “chaos” or “organized chaos” at best. You are expected to maneuver your way around. Someone may wake up one day and say, “this isn’t the right way to do it; let’s do something totally different.”
Startups are smaller with fewer employees, enabling them to build great relationships and freely exchange ideas. Few employees, and many projects or tasks. So, what happens in this situation? A person has to wear multiple hats – carry out different tasks other than the stated job responsibilities.
There is no hierarchy or management structure. Everyone is equal. It’s ideas that matter, not the job title. So, you don’t really get promotions and climb up the ladder because there isn’t any ladder (no hierarchy or management structure). Employees are expected to seek satisfaction from implementing new ideas, seeing the product shape up, and getting acceptance in the market.
Hope this gives you some clarity about what is a startup job. Now, let’s try to understand the definition of a corporate job. A corporate job is any job in which you find yourself working in a large company. Such a company is usually considered stable and there is a defined structure with room for career progression.
Corporate jobs are found within businesses with multiple departments that have assigned roles. Corporate jobs have a chain-of-command type of setup. You report to a manager who will have his or her own superior, who in turn will report to another person higher up and so on. So, it depends on where you exist in this hierarchy.
Take a look at the below hierarchy in a corporation
At a very basic level, we can say that startup jobs are more about passion for creating something new, while corporate jobs are about building a career for oneself.
2. The difference between an early-stage startup and a late-stage startup
We usually hear lots of terms related to startups. The two most common ones are ‘early-stage’ and ‘late-stage’ startups.
What is an early-stage startup?
An early-stage startup is the seed stage of a startup. It focuses on product development, gathering market data, building a customer base, and getting enough funding to support the venture.
Early-stage startup faces a unique set of challenges:
- As they are trying to find a foothold for themselves in the industry landscape, they face tough competition from existing players.
- It isn’t very easy to hire talented employees when you aren’t paying competitive salaries. They look for the right mix of skills and motivation to join their company.
- Costs are high, and funding is low. This means early-stage startups have to balance their finances to avoid unnecessary debts.
- Building a product that matches the expectations of customers and growing a small customer base to gain scale.
Keep in mind that overcoming all these challenges can take some time. Despite these challenges, early-stage startups are more adaptable and receptive to change. This is like the “true startup” that you have in mind.
What is a late-stage startup?
Late-stage startups have a well-known product with a strong market presence. Their product has successfully penetrated its initial target market, and they are now exploring opportunities to expand into newer markets. Though they take pride in generating a positive cash flow, but viability is still an ongoing concern. It is quite possible the late-stage startup is positioning itself for an acquisition by a bigger corporation or launching their initial public offering (IPO) to secure funds.
Late-stage startups face the following challenges:
The initial excitement about the new product in the market slowly begins to fizzle down. It’s time to infuse something new, but competitors have become aggressive, and expenses will increase. Though a later-stage startup has secured the initial funding, that isn’t enough to scale up.
Along with the founder CEO, new members on the board (investors) want a say in how things are managed. Teams begin to grow, and slowly hierarchy starts forming to give structure.
A late-stage startup slowly begins to resemble a corporate.
3. The pros and cons of working for either
There are several pros to working for a startup:
- More opportunities to learn, as you need to go beyond your job description.
- Working in a stimulating work environment where you can create and innovate.
- Flexible working hours. Some startups allow employees to work from home, shorter work weeks, and reduced working hours.
- Founders and employees work together, and there is no middle management. This means minimal supervision.
- Some startups offer cool and interesting perks like casual workplaces, free food, and drinks, gaming zones, gym facilities, etc.
- Job satisfaction is much higher when you can feel your contribution to the company’s success.
Just like anything else, working in a startup isn’t without its drawbacks. Here are some cons of a startup job:
- Heavy workload. You’ll be expected to work longer hours and maybe even on weekends or holidays
- Uncertain job security. Most startups fail within the first three years. So, you will always feel the anxiety of losing your job.
- As most startups have limited funds, you won’t earn a big paycheck.
- The “unorganized chaos” of startups causes confusion and ambiguity.
- Things will constantly be changing, and you’ll be expected to keep pace.
Coming to the pros and cons of a corporate job.
A corporate job certainly has its benefits.
- You have a clear path for advancement in the established management structure.
- Of course, the salary is good and consists of benefits like health insurance, paid/unpaid leaves, promotions, bonuses, increments, etc.
- A good corporate brand name on your CV itself is a big win. It looks impressive for future jobs and makes job change much easier.
- You work as part of a big team and share responsibilities with them. So, the accountability of big projects isn’t just yours.
- You need not worry about job stability as long as your performance is up to the mark. There are so many departments, functions, and roles that there will always be something suitable for you.
- You’ll always have a manager to direct your actions. Plus, there are standardized processes and policies. So, there is lesser ambiguity and chaos.
There are downsides to a corporate job, as well. Let’s see the cons of working in a corporate job.
- Corporates are less open to change. You need to follow set processes and policies as well as take multiple approvals to do things. This may lengthen the completion of projects.
- Corporate jobs are often criticized for having highly active office politics. So, even though you worked hard to deliver results, you might not always be chosen for promotions.
- You are one of hundreds or thousands of employees. You may feel invisible at times.
4. Traits required to work in a startup environment versus a traditional (corporate) job
At the end of the day, both startup and corporate jobs are great places to work and very advantageous for your career. What it comes down to is where you feel most comfortable working.
Traits for working in a startup job
- Comfortable working in chaos
- Ability to create a bigger impact
- Out-of-the-box thinking
- Handle high pressure and multi-task
- Care more about the team than just your own self
- Ability to take risks and experiment
- Bring new ideas to the table
- Not scared to try out new things
- Passionate about your work and learning
If you feel comfortable working through ambiguity, wearing multiple hats, and embracing change, a startup job is a good choice.
Traits for working in a corporate job
- Being sharp and able to connect with different people
- Honesty and strong work ethic
- Ambitious individual career plan
- Know how to manage multiple stakeholders
- Follow process and instructions
- Ability to collaborate across different stakeholders
If you prefer a nine-to-five role with good compensation, you’ll likely enjoy working in a corporate environment.
5. The myths of working for a startup
Well, we agree that a startup job is different from a corporate job. But it isn’t ‘all bad’. Certain perceptions are notoriously created by the big corporates in the job market to avoid losing talent to startups.
Let’s debunk some myths of working for a startup
a. The pay is low
One of the biggest myths of working in a startup job is you’ll have to accept lower pay. Think for a moment – in a big corporate there are so many jobs and departments which are to be paid. The whole HR budget is to be divided among so many people. But, in startups, there are only a handful of people and everyone is making a clear, measurable impact. Smaller teams mean you are much more visible to the founders and the entire capital is to be divided among fewer employees.
b. Working hours are very long
This is a tricky one. Big companies highlight ‘work life balance’ as a norm in their offices, but most corporate employees burn midnight oil to meet their deadlines.
Startup teams are small, and everyone needs to give 200%. You will be working hard and also at unusual hours (before 9 am or after 5 pm), but the difference will be you’ll be doing it not because you are “forced to,” but because you “want to”. Startups give you the freedom to manage your time. Whether you want to work from home a week, take a mid-week off instead of the weekend, or work reduced hours every day but clock-in the remaining hours on a Saturday, everything is possible in a startup. Most startups offer flexibility in schedule, generous paid time off, and the ability to work remotely to help manage life’s challenges.
c. Everyone is under 25
We often hear stories of teenagers becoming entrepreneurs founding companies which leads to a common misconception that all staff are under 25. This is simply not true. Founders hire people for their skills, attitude, passion, and experience. Many startups have employees in their 40s. According to Entrepreneur.com, the founders of most startups are on an average, 45 years old.
d. No job security
Sure, startups are risky, and the fact that not all of them will survive adds to the insecurity. Having said that, we all hear about employees being laid-off as a result of restructuring or poor performance. It happens all the time! So, even though big corporates are well-established, job security isn’t promised anywhere.
e. It’s all chaos
This chaos stems from the freedom to choose the path to reach the end goal. All employees are part of decision-making, and all ideas are welcome. It’s not the founder or managers who call the shots, and the rest all follow the instructions. If you see it this way, you’ll realize that this chaos is good because it gives people the ability to experiment and choose.
f. No training programs
Probably not, in the traditional sense. But, most of the training programs in big corporate are theoretical, repetitive, and obsolete. Who uses this learning anyhow?
In startups, you get to acquire real-world learning while working on different projects. These are what matter the most. When you go beyond your stated job responsibilities, you learn new skills.
6. The impact on your career over time
It’s great to work in a startup early in your career.
Most startups have blurred boundaries between different roles and functions, which allows employees to perform multiple jobs at the same time. This helps you exercise your potential and understand your capabilities. You might choose to pursue a different skill.
Can you imagine sitting next to the founder CEO in your workplace? This allows you to acquire thinking patterns, work ethics, and industry secrets from the best.
It takes several years to reach managerial positions in a corporate job. On the other hand, startups throw you in the deep end. You are assigned leading roles in cross-functional projects and made responsible for achieving key business objectives.
Working under pressure with tight deadlines will polish your skills and develop your decision-making capabilities. Taking initiatives, accepting failure, and sharing wins is a part of a startup job.
Overall, it’ll make you a much sharper individual as compared to someone in their comfort zone.
When you’ve done all this early in your career, you are indeed more than prepared to take on key responsibilities in a big corporation later on. Over time, you’ll realize it is the on-ground experience and not just the number of years at work that counts. After working for the initial few years in a startup, you become ready to take up a mid-management level role in a big corporation.