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Why Startups and Entrepreneurs Don't Get to Have All the Fun
I am beginning to notice in the media I consume, and in the people I talk to, a growing fascination with joining startups, being an entrepreneur, and going out on your own as an independent consultant.
There's definitely nothing wrong with taking that approach to your career. In fact, I admire the people that do because it takes courage, creativity, and energy to succeed. However, the admiration of entrepreneurship shouldn't take away from the fun that can be had working inside a large company.
The "small company versus large company" debate has existed long before I started my career, and will continue to exist long after I retire. The debate is not factual and there is no right or wrong answer. Small versus big is all about what matches your personal style better. In fact, "small" may be too "big" and you need to be independent to be truly satisfied with your career. It's all about what is right or wrong for you.
However, recently, the rejection of large companies and corporate life in favor of being independent and/or joining startups seems to be more fashionable than ever before. In fact, I am starting to hear undertones that people who work for large companies are somehow "doing it wrong" or are too afraid to join those who take a more entrepreneurial path.
So, for all of you self described "corporate slaves", here is a list of reasons you can feel good about.
Five reasons why your corporate job is better than the alternative:
Job opportunities: A medium-to-large company will typically have more churn than a small one. By churn I mean internal organizations being created, shutdown and reorganized. Every structure and strategy change creates an opportunity for motivated and talented employees to move into new jobs or try take on new challenges and responsibilities.
In smaller, more static companies, you will often need to work years in the same job until an opening is created due to a retirement or someone leaves the company.
Job security: We should all understand there is no true "job security" any more, but working inside of a large corporation tends to be safer than being an independent consultant where your hours are translated into income, and all the risk is borne by you.
There is also risk in working in a startup. It's called a startup for a reason; it's not an established company, with established products, and established customers. It is not uncommon for startups to be cash flow negative, and operate only on borrowed money and promises of a great future. Running out of funding and going bankrupt is a real risk at many startups. So is being acquired by a larger company and then losing your job in a layoff due to all the newly redundant positions with the larger parent company.
Money: Above a certain threshold, money isn't everything. If you go below that threshold, however, then it certainly feels like it is. Chances are, you can make more money at a corporate job than elsewhere, especially early in your career. If you are an independent consultant, with a small customer base, likely your revenue will be smaller than the salary of a related corporate job.
Startups typically pay mediocre, and give employees stock options to compensate. What they don't emphasize is that by the time the company successfully "exits", the equity held by employees is typically not worth much.
The stock options held by employees often get extremely diluted by rounds of company fundraising. This means after preferred investors take their cut of any M&A, or your company IPOs and your options vest, you are better off to have taken a larger salary at a big company than to have taken a smaller salary and company equity.
Read Brandon Smietana's answer on Quora for a great detailed explanation about why employee stock options will not make you rich.
Access to resources: Most large companies are either well established private companies or are publicly traded companies. In either scenario, they have access to large bond markets, and publicly traded firms have access to equity markets. Access to these markets means they have access to the financial resources they need to capitalize on opportunities to generate growth and expand their business. Therefore, large companies can invest more easily in new areas, and new areas can be exciting for employees.
Want to start a new venture in Ghana? Probably a large company has the resources to draw upon to attack that opportunity, whereas the small cash-strapped startup does not. Typically a startup has less liquid resources and needs to focus on its core product or service to establish market momentum. As an employee, working for large corporations that can go after interesting opportunities can be extremely fun.
You can look like a superstar: Now I'm going to be brutally honest here. The larger the company, the higher the number of mediocre employees working in that company. It's just simple statistics. This means if you are creative, courageous, passionate, and self-motivated, then you can stand out from the crowd and rise within the company.
Feel great
So please, the next time your close colleague abandons their large company job to join the riches and fame at a startup, smile to yourself and wish them luck. And when you're reading an inspirational book by an exciting entrepreneur, remember, you can re-create the entrepreneurial feeling inside your large company.
If you have a burning passion to strike out on your own, then do it and don't look back. But if not, you should still feel great about yourself and your big company job, and the exciting future you can create for yourself there.
Take care, and I'll talk to you next time.
Question: Did I miss something? What is another reason why large companies are great places to be? Let us know in the comment section below.