- Amir Gefen
Startup vs. Corporation: 3 Key Differences to Help you Start Your Career
A common and pivotal challenge in almost everyone’s life is choosing a career. Should you aim high and work for a big corporation? Is it easier to get your foot in the door at a startup to work your way up?
As someone who has spent most of my career in medium to big corporates, transitioning to a small startup brought some significant differences.
A bit about me: my experience is in Research & Development (R&D) with a background in hardware and system engineering. While working at a large corporation in a previous role, I grew from project manager to Vice President (VP) R&D. Now in my later career, I have transitioned to a small startup and hold the title of VP R&D.
Here are 3 key differences between a corporation vs. a startup that stand out to me:
1. Management and Upper Management: Who do you answer to?
In a startup, there is not much of a formal managerial structure. There is less of a hierarchy and everyone enters their input. For example, everyone at the company might get together and decide together on where the product will launch. The company is very agile to support the change in circumstances and in customers’ needs. An employee needs to be flexible to keep up with the ever-changing list of priorities and roadmaps.
In a big corporation, there is a firm managerial structure. I would never send an email to anyone higher than my manager. If the message needed to go higher up, it would come from my manager only. Developers and team leaders have less influence on company decisions and policies are less flexible.
2. The Job Description: What’s going on your resume?
In a startup, everyone does a much wider spectrum of tasks, going above and beyond what the formal job description requires. On one hand, there are days where you are allocated to lower-level, routine, or boring assignments. However, other days are filled with exciting and new projects that give you a taste of another department or allow you to learn a new skill. For example, you don’t need managerial training to lead a team, and interns work directly with the CEO. In short, every single person on the team has a lot of influence despite one’s “title”.
At a corporate level, one’s job description suits exactly their daily duty. Employees and managers only report upwards (and horizontally to their peers) in a formal nature. Responsibilities aren’t shared, instead, an employee works on their specific tasks and then reports to their manager. On the other hand, you can typically get training and coaching from experienced team members or other leaders.
3. Money, Money, Money: When will you get rich?
For a startup, there is more emphasis on cash flow and out-of-pocket expenses. As a new company, there is not as much of a budget, and every dollar is scrutinized. Startups are very dependent on investors, grants, and other forms of funded programming. Employees’ salaries are smaller, in the beginning. As the company succeeds, so do your earnings. The budget is not necessarily something known as it is constantly changing depending on many factors.
An established corporation, on the other hand, has a clear-cut budget per department and company function. Budgets are determined once a year and are based on expenses from the past year and the next year’s forecast. There is no expectation to save money in your department. The main goal is to get your project in on time, with no exceptions. The company gets money from your sales and future forecasting becomes available. Money is relatively stable here.
The bottom line: life in a startup is more diverse, surprising, agile, and full of challenges whereas a large corporation offers stability, structure, and pre-defined job expectations.
If you are in the beginning stages of your career, here are some questions you might want to ask yourself:
Do you like being part of and contributing to the decision-making process and building a company almost from zero?
Do you work best with clear, defined budgets, teams & in a stable environment?
Would you rather work in a formal & stable atmosphere or in a more casual agile one?
Are you willing to go outside of your job description and try something new?
Do you work best with strict deadlines and procedures?
Do you still need to learn from others before working in a more independent way?
Good luck out there!