Startup or Corporation? Decide Your Next Career Move

Today, the idea of lifelong company loyalty is no longer an obligation. With wave upon wave of new startups making the business landscape more diverse than at any other point in history, dissatisfied workers, uncertain fresh graduates and professionals seeking growth and learning may be facing a new dilemma - too much choice.

Startups are lean, mean and quick, appealing to those who are bold, innovative and tired of traditional business models. At the same time, new routes to career advancement abound in corporations eager to take in dynamic individuals moulded by the fast-paced startup culture.

For those looking to seize the opportunities lurking out there, it is always good to be prepared no matter which point of your career you are at. Let the following observations steer you towards a more informed decision when choosing between life at a startup or corporation.

Key Differences Between Startups and Corporations

Just as a full-sized tree sports multiple branches, large corporations comprise multiple smaller entities and departments; the scale and stability that a corporation holds are apparent to all. Conversely, a startup can be likened to a sapling that is still growing, with its future size and stability still currently uncertain. Corporations appeal to much of the working population as they offer steady growth; they progress slowly but smoothly, similar to travelling aboard a tram on a pathway that was planned and established by previous generations.

Meanwhile, the speed of growth in a startup is best described as a runaway train, where you are responsible for building new train tracks even as you blaze along freshly laid ones. While startups can reach their destination more quickly than they would otherwise, they also risk derailing from their expected growth trajectory and ending up nowhere.

You may also find it easier to learn from others while in a corporation – due to the large number of people it employs, there will always be somebody there who possesses new knowledge. In a startup, it might be more difficult to find opportunities to be coached or guided by others, as the teams are busy and constantly pressed by time and workload issues. As a result, people do not have the time to micromanage others, so you own your results. You have to take ownership of your own learning curve and be self-motivated to learn – no one is going to look over your shoulder constantly and point out what you need to do.

This means that you might be learning as you go at a startup, but without knowing what the ideal approach or solution is. However, over time, as you start building your own processes and understand how things should be done given the set of circumstances, you will arrive at the best-case practices for that particular startup. The experience gained by this hands-on, independent learning is a springboard for greater things down the road.

Conversely, larger corporations already have best-case practices cemented in place. There is less room for creating a solution to a particular problem from scratch, and a lot of your work will consist of executing these best practices accepted by the corporation.

Your learning journey is not always smooth sailing, and consequences can hurt. If you screw up in a big way while in a corporation, you may be shaken but ultimately safe – the impact absorbed through the hierarchical system. Commit the same type of mistake in a startup, and your continued employment could be at real risk.

Above all, the key difference between startups and corporations is regarding how much time you’re given. In a startup, the progression from concept to launch could be a matter of days, while some corporations have lead times stretching as far as three to six months.

Planning in corporations is measured in terms of quarters per year, backed by an annual budget to ensure financial stability throughout. That scale is practically unheard of in startups – most plan and assess budgets in terms of weeks and at most a quarter ahead. Even then, things change so drastically in the startup field that plans determined in October may look completely different by December of that same year.

Corporations also require multiple approval levels and implementations may take weeks because actions taken can and do impact entities in different parts of the world. All relevant stakeholders have to be brought on board and the approval cycles initiated, where everybody involved has to agree to what has been pitched. Contrast this with a startup, where some teams may be more likely to start implementing without going through any approval – in a corporation, this would be unheard of.

When it comes to decision-making, time is not the only differentiator between a startup and a corporation. Consider for a moment the impact matrix, which quantifies how much effort you put in against how much impact you can create, along an x/y axis. At a certain point in the matrix, you can find a sweet spot where low efforts can create high impacts.

Such opportunities are few to none in a corporation, where many decisions of a low-effort, high-impact nature have likely already been utilised and baked into the business framework as best practices. In this situation, the key lies in optimising on a smaller scale – contrast that with a startup, where you can still find low-effort, high-impact opportunities. Exponential growth can bloom from these impacts, because the base of a startup is so low, many processes are still in their infancy and not yet systemic.

When You Outgrow Your Company

Are you constantly feeling unmotivated and lethargic at work? Perhaps even the daily act of going to work feels like climbing a mountain, and you’d much prefer being late and spending as little time as possible at work. If you’re starting to look for justifications to avoid arriving to work on time, that’s the first clear indication that you’re not in a place where you belong.

Even if you initially found the environment stimulating and challenging, if it has turned stagnant and unrewarding, there’s nothing wrong with leaving for brighter prospects. If all your decision-making at work is centred around what’s best for yourself rather than the company, that’s another strong sign that it’s time to move on.

However, before you take that leap of faith, it’s best if you’re prepared for life on the other side, especially when making the switch from a corporation to a startup or vice versa. Startups come in all shapes and sizes, and it is essential that you first research the domain that you’re planning to enter – your strategic thinking and input has a more direct impact in a startup.

By extension, you also want to identify potential growth areas overlooked or untouched by other people. This comparative advantage will help you avoid stiff competition over saturated business areas and put you in the driver’s seat steering the company towards new growth. As your business model may not be as extensive as that of an established company, any comparative advantage becomes more meaningful.

If your sights are set on going to a corporation, information about the specific company is generally easier to find. However, corporations look for specialists, not generalists. You’ll need to deep dive into the functions that your desired role oversees. As a value-add, you should work on specific skills that will help you shine in the role. Unlike a startup, strategy planning is largely handled by senior management; if you don’t find yourself in that position, it would be more relevant to think tactically to navigate through the work.

Change inevitably means that some old processes and practices will lose their relevance; likewise, operating in a radically different environment requires a different mindset. It’s good to be curious and question everything in a startup. In a corporation, excessively questioning the status quo may paint you as a poor fit or even a troublemaker. Conversely, in a startup, failing to ask enough questions can hold you back from creating more value – that’s why you want to investigate the purpose behind every process, and if anything can be further optimised.

While it is much more welcome in a startup, questioning and optimisation is still doable even in a corporation. With that said, the scope and scale of your enquiries should be narrowed down. You mainly want to ask why the work is done the way it is, improving certain aspects of the process after microscope-like examination.

Some people believe that once you join a corporation, you are relegated to being a cog within a giant business machine, losing the chance to make a meaningful impact. I would like to correct this misconception and dispel other myths surrounding corporations and startups.

No matter where you go, possessing sufficient experience will enable you to land real impacts. If you join a startup later in your career, you have a front-row opportunity to utilise all your knowledge and lessons learnt to do big things, akin to a master craftsman or craftswoman tapping on decades of experience to create their career-defining work. Similarly, if you’re leaving for a corporation after spending your formative years in a startup, it’s unlikely that you’ll find yourself starting from the bottom, but rather at the mid- to senior-level of management. From this position, you’ll be making decisions that can greatly impact many people and the overall business.

By joining the ranks of middle or senior management in a corporation at a young age, you represent a breath of fresh air for change. Not only do you have the energy and drive associated with youth, you are also not bound to old habits and traditions perpetuated by company veterans. That said, age is just a number – if you keep learning and understand what your aims are, you can always make a switch and fully realise any opportunity that comes into view.

“All corporations work nine-to-five or equivalent fixed timings” and “Corporate people are great at presentations and they always know exactly what to say” are other generalisations I’d like to touch on. While a corporation tends to have a top-down approach to determining work hours, experiences on the ground will differ greatly from one corporation to another, and even from one region’s office to another within the same corporation. The key differentiator boils down to the company (or even office) culture.

It’s not necessarily true that the suits always have a ready answer as well – much of it can be attributed to operating off learnt behaviour from previous meetings. Giving tried-and-true responses may work for some cases, but it does not always lead to the best scenario when the overall picture comes into consideration.

Startups are also not free from misconceptions – many people generalise and believe that startups have no office politics and require working really long hours. While the average individual in a startup has more on their plate than the average corporate equivalent, good time management can save you from working 12-hour days consistently.

Having less people at a startup also facilitates more closely-knit interactions, meaning that your relationships really matter. A small disagreement can quickly lead to a chain reaction of greater instability, enveloping the whole office and possibly causing adverse impacts on the business. By virtue of their larger size, corporations are more resilient to destabilisation by small-scale office politics.

Money Matters

As you decide between a corporation and a startup, there will undoubtedly be a practical aspect weighing on your decision – that’s right, money.

True to convention, the base salaries offered by corporations are often larger compared to that of startups. The money raked in by a corporation can grow to exponentially huge numbers, but proportionally speaking you will see close to none of it because your role does not have a large risk element. That risk element is held by the corporation’s founders in the organisation’s infancy, and then by top leadership as it matures. Therefore, they have very little incentive to part with the bulk of the profits made, and to make up for that, they offer a larger base salary.

In a startup, salaries tend to consist of a smaller fixed salary and compensation in stock options. The stock options are akin to gambling with the future, and they can eventually pay you many times over or go bust, in accordance with the fortunes of the company. It’s like placing a chip on a casino table, if the chip is the startup and the casino table is the market it operates in.

The stock options given also differ from one startup from another: it could be an incentive to join or even be a substitute for a sizable percentage of your expected salary, if the company can’t afford to fully pay you at present. As part of very early startups that had not raised funding rounds, I commanded a low base salary but saw 40% of it in stock.

If you pick the safer option and go for a corporation, then stick around for a few years, the total salary received will at minimum more than make up for the equivalent salary you would have gotten had you joined a startup. Moreover, not all startups have a clear growth trajectory, so you have to choose wisely what kind of startup you want to join. There are also various levels involved, from newly-funded small-scale startups to late-stage startups financed by venture capital and everything else in between. When talking about growth trajectories in startups, you are dealing with companies in a dynamic and ever-changing ecosystem. The multitude of factors at play are even inclusive of which company you join and which industry it operates in.

When deciding on a startup to join and forecasting their likely growth trajectories, I would think in terms of four-year cycles. If money is the key consideration, you can assign a market value to the stock options offered and add that to the base salary they’re offering, then compare the total value against the numbers offered by corporations. After all, stocks are volatile, and if a corporation can offer the same remuneration in a safe manner, you may want to opt towards them instead.

Taking Risks and Operating at Your Best

Beyond a strictly monetary focus, evaluating your appetite for risk will help you determine where you belong in the next stage of your career. Those more attracted to the corporate life are likely not big risk-takers, and they’re well aware of the stability it offers – a largely fixed path of one or two years, with a steady promotion waiting on the other end like a pot of gold at the end of the rainbow.

That path might not exist with a smaller company, and it may be more appealing to confident risk-takers because the risk-to-reward ratio is much greater. Smaller companies are also good homes for more analytical people, as the nature of startups means that any small thing can snowball into a disproportionately large impact. With less resources to work with, it’s also key to prioritise on the best way to grow the business – if you have two arrows and five targets out there, you must accept that it’s not possible to hit all of them. How do you know which two targets to hit? That assessment is a job for the analysts, and that’s why they generally tend to gravitate towards a startup.

Every individual has different wants and needs that inform their job preferences – your dream company of today may feel uncomfortable and stagnant in a few years’ time. The fault may not even lie with the company, or any one party, but simply that you’ve outgrown it. In this scenario, moving forward benefits not just you, but also the company you’re leaving behind, so that your old role can be filled by someone also looking for a change of pace.

Disclaimer: the views presented in this Power Read are personal and not representative of Unacademy.

Define the Goal

What are the goals that you’re trying to achieve? Are they long-term or short-term? You want to look for a corporation or startup that can help you accomplish your goals.

Identify the Right Organisation for You

Whether a startup or an organisation, the company you pick should be a right fit for you. You can determine this through research, assessing your appetite for risk or making sure that its office culture is compatible with your values and needs.

Understand What You Can Sacrifice

Oftentimes compromise is necessary, and you can’t get everything you wished for in a new company. Are you willing to take stock options in a startup over better starting pay, or a less flexible company culture for the security that a corporation offers?