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 blog post is a summary of all that advice.  Oddly enough, I wrote a similar blog post my senior year of college while interning at Redfin.  And since college I joined Cloudera before they were funded and left when the company closed its Series C, or third round of funding.  The advice below mostly comes from my experiences at Redfin and Cloudera.  I’ve also worked at Google and Northrop Grumman.

1) Responsibility, accountability, impact: at a startup it’s unavoidable to have lots of responsibility and accountability. There’s no doubt, too, that being at a startup will put you in a position to make a huge impact.  If you do amazing work the entire company and all of its customers will benefit from it.  And you’ll be loved for it.  You’ll get notes from the CEO and other leaders complimenting you on how awesome your work is.  On the flip side, if you make a big mistake, the whole company pays for it.  But keep in mind that most startup cultures prefer agility and speed to cautiousness.  It’s likely that your mistake won’t actually get you in trouble, as long as you were trying to do the right thing.

2) Risk: working at a startup is riskier.  The startup likely isn’t profitable, and probably only has at most 12-18 months worth of money in the bank (this is called the startup’s runway).  If the company does very well, the CEO will raise more money and extend the runway.  You’ll still have a job and each round you’ll get a salary closer and closer to market rate (more about this later).  If the startup doesn’t do well, you’ll be out of a job when the startup runs out of money.  But you’ll be forewarned if the CEO is transparent — most of them are in earlier stages.  A startup is risky because you’re building something from nothing.  You’re doing something ridiculously hard because you believe in it and want nothing more than to see it succeed.  You’re not failing even when all the odds are against you.  You’re the underdog in many ways.

And by the way, if you’re a good engineer you’ll have zero issue finding another job.  Zero.  Every company in software, big and small, needs more good people.  This trend won’t change for a long, long time, either.

3) Opportunities for generalists: generalists don’t do well at big companies.  Big companies want you to be really, really good at that little thing you spend all your time on.  Not at a startup.  Although specialization is still important at most startups, there are far more opportunities at startups for generalists.  I’m defining generalists as people that have interests in one field or many fields.  For example, if you want to be an engineer and work on the website, the data infrastructure, and the mobile app, you’ll love a startup.  Similarly, if you’re an engineer and want to get your hands dirty in marketing or recruiting or whatever, a startup is also a great place for you to learn and grow.  To be totally clear, I’m not saying specialists don’t do well at startups — they do incredibly well.  Generalists, however, don’t do well at large companies.

4) Ownership and leadership: at a big company you need to wait years and years to become a true leader with big ownership.  Not at a startup.  If you’re awesome you’ll be able to grow and move up in your career far faster.  Mark Zuckerberg would have never been given a CEO role at a big company he started working for after college.  The only way he could find himself at the top of an organization is by starting it, or in the general case by joining a super small team.  Your career will be accelerated in a major way by joining a startup.

5) Transparency: startups usually have far more transparency than big companies.  You’ll know why the CEO decided to raise a new round of funding, or why a VP of marketing was hired, or why the company decided to open a new arm of business, or how the CEO did the recent round of investment.  There will always be information that isn’t shared, though, for example salaries and equity compensation, certain board meeting information, and certain sensitive investor information.  But in general every other decision made about the company will be transparent.  You’ll get to see how the company grows, why certain decisions were made, and how the company reacts to competitors and business plan changes.  All of this will teach you about business and prepare you to do your own startup one day.

6) Company culture: you get to help define it.  A company will be, for the most part, an extension of the founders’ personalities.  But especially in the early stages you’ll have a huge impact on the culture of the company as well.  You’ll be in a position to define company-wide celebratory goals, or traditions that the team rallies behind.  At the end of the day a startup is just a few people in a room.  If you’re one of those people your personality will rub off on everyone else and you’ll help create a company that is as much a part of you as you are of the company.

7) Hiring: you’ll do a lot of interviews, and you’ll be part of the decision to hire or not hire someone.  You’ll interview engineers, marketers, sales people, anyone.  You name the position, and you’ll probably interview any potential candidate.  Even if you’re right out of school you’ll still be asked to interview.  Of course, if you don’t like interviewing, you’ll only need interview potential team mates.  Read: if you’re an engineer you’ll only interview other potential engineers.

8) Financial incentive: in general your salary will be lower than at a big company, but your equity, or ownership in the company, will be significantly bigger.  Depending on the stage of the company you join, you’ll be granted anywhere from a few percentage points to a micro fraction of a point.  If the company is bigger, you’ll get fewer shares and your salary will be more inline with the market rate.  If the company is smaller, your salary will be smaller and your equity will be far greater.  Equity has a long, long tail, meaning the first 5-10 employees get significantly more equity than all other employees that follow, with certain exceptions for executives.  This is especially true for the first and second hires, though.

A little more about stock: if you join a company that is already doing incredibly well, you probably won’t get enough stock to retire unless the company turns into the next Facebook or Google.  In most cases, you’ll only get retirement money if you’re one of the first five employees.  Otherwise you’ll get a large down payment on a nice house, assuming the startup does well of course :).  Let me say that all again: except in very rare occasions like Facebook or Google, you can’t expect to join a company that is already killing it and hope that you’ll retire on the money your equity brings.

9) Politics: I’ve never heard of a company with more than 50 people that didn’t have politics.  Politics are a necessary evil whenever a company reaches a certain size.  The point of no return is when the first middle manager is hired — or when the first job opens up that is about controlling people and nothing more.  Small startups can have politics, too, but in the early days there’s generally too much camaraderie and too much daily work to worry about power or any other bullshit like that.  Oh yeah, and while I’m here, unless the leaders of a startup are lame, there won’t be any bullshit.  Everything is pragmatic at a startup, or at least should be.

10) Be a part of something bigger than you: at a startup you’re a part of something much bigger than just what your job asks of you.  Sure, you need to write code, publish blog posts, whatever, but you’re doing much more than that.  You’re building a company.  It’s hard to describe what that feeling is like, though.  Being a part of a small company is somewhat like creating a community or finding new best friends.  You’re making something from nothing, with people who are in it for the same reasons you are.  You’re at the apex of what might become something big, something meaningful and different.  And the excitement is amazingly powerful.

The Self-employment Struggle

Being self-employed can be tricky.  In the (nearly) three weeks I’ve been without a boss I’ve had days of huge productivity and days of zero productivity.  For a while I thought working for myself would mean a flexible schedule, with lots of time to do whatever I want.  Indeed if I so desired I could put 60+ miles on the bike every morning, wearing compression tights while I sit at my computer and code for the afternoon and evening.  Or I could travel all over the place, see friends endlessly, and live the good life.

What I’ve described above is the self-employment struggle — no clear deadlines or outside pressure, nothing but self-induced desires and goals.  The urge to stay-cation is huge, yet productivity is critical.  I should be the busiest I’ve ever been in my life right now.  The only way I’ll succeed is by building awesome shit, enabling me to have more meaningful conversations with investors.  I quit my job to give myself the time I need to prototype ideas and speak to investors.  I didn’t quit to get more free time.  Self-employment, at least the kind that will hopefully one day lead to a technology startup, is about working hard, not taking a vacation.

Decisiveness

For better or worse I tend to care a lot about the happiness of the people around me.  For example, I tend to think I’m a hospitable host when I have guests over for dinner.  I feel guilty when I may have made someone unhappy, self-conscious, or otherwise upset.  And I’m eager to hear coworkers’ opinions when I’m proposing a big plan or debating a difficult topic.

In a lot of ways caring so much for those around me is a good thing for all the reasons it’s good to be a nice person.  But in the workplace I’m starting to believe that more importantly than caring about others’ well being is caring about solving the problem at hand, about being decisive and moving forward.  And second to being decisive and productive, one should be nice.  Now depending on your job, others’ well being may be top priority, for example if you’re a leader at a company, a manager, or anyone else directly influencing others’ happiness.  But among peers and anyone above you in a company hierchy, decisiveness matters most.

I’ve always considered my coworkers my friends, but now I’m starting to understand that relationships are different at the workplace.  Business matters in this context more than friendship.  Or at least friendship can be put aside temporarily while business is conducted, while decisions are made and projects and teams are moved forward.  I’m learning to be decisive, to express my opinion instead of a statement I’ve constructed that might make someone else feel better, that someone else is more likely to enjoy.

Young People, I Urge You To Consider Software

I work in a crazy industry called software.  Companies with zero revenue get wild valuations, engineers complain that their employer doesn’t provide free food (#firstworldproblems), and starting salaries are almost at the 6-figure mark.  Yet what’s more crazy is the undeniable need for talented young professionals.  I’ll claim that no other industry is anywhere near as creative and lucrative as the software industry.  Sure, you can go get your law degree or work for an investment bank, and after a few years you’ll be making lots and lots of money.  But the chances are good that you’ll be unhappy with your job.  When I hear about my friends in law and banking I feel sorry for them — so many of them devote hours and hours to mindless, awful work, living lavishly on the weekends, slowly making their way to more creative roles as they mature and gain experience.

Forget giving away your 20s to working your way up the ladder, justifying a shitty job as a means to an end.  The software industry has insanely high starting salaries, startups give out equity that can convert to large sums of money if the startup does well (and many of them do), and most importantly, you’ll be doing wildly creative, awesome, challenging work.  Seriously.  Data is being created faster and faster, and the need for smart, math-oriented analysts and engineers is only growing.  Mobile is blowing up, and the need for mobile engineers and awesome designers/UX people is following in the wake.  New websites are always being started, opening up all sorts of opportunities in scalable web infrastructure engineering, agile software development, design, and product management.  There is so much happening in this industry, and so much opportunity.

I wish I could find a study that goes into the happiness of people in different industries.  Hardly any of my software friends are unhappy: they love their work; they have excellent salaries; they are treated well by their employees; they have insane opportunities to grow and better themselves; and they’re passionate about what they do, the problems they solve, and the people they work with.  In the software industry age and experience don’t matter.  What matters most is your passion and motivation, followed closely by your intelligence and cleverness.  So if you’re on the fence about what to study, give software a shot.  Take a class in college, read a book or two, and see if you’re interested.  The software industry is absolutely amazing, and there’s a huge need for good people.  If you’re interested, be one of those good people, and be happy.  You’ll love it here.

Internships and the Importance of Diversity

Last week I was introduced to a UW CSE junior considering an offer from a startup and a very lage software company, both based in Seattle.  As I was providing insight around corporate culture and valuable career experience I realized that what’s most important for an internship is diversity.  Interning is the best way to quickly get a glimpse of a corporate culture or a certain role.  For example, throughout high school and college I interned as a product manager, software engineer, and marketing specialist in both large and small companies.  All of this diversity gave me perspective on what I enjoy doing, the type of company I want to work for, and ultimately how I want to start and pursue my career.

At least in the software industry leaving a full time position before a year or two doesn’t look good.  You should contribute at least a year to the company you’re working for, ideally two.  And the older you get the more specialized you become, causing career u-turns and changes to be more and more taxing on your personal brand.  For example, if you spend two years at one software company and three years at another, you’re now 27 or so, perhaps engaged or married, very specialized, and less likely to be daring enough to try something new.  I’m not arguing that people at a certain age are unable to try new things.  My argument is more around practicality.  The older you are the more specialized you become, the less practical it will be to try something new.

For me, interning taught me that I prefer working for small startups in a role that isn’t well defined.  I like coding here and there, thinking about product positioning and vision, helping customers with their issues, and solving customer problems with software.  I prefer startups because they have nothing to lose and everything to gain, desperately trying to change the world, passionate about their work and their place in the industry.  Leave me a comment if you’d like to hear more about why I prefer startups, or marketing/PM instead of engineering.

Otherwise, I challenge you to intern as much and as early as possible.  The more diverse work experiences you can have the more likely you’ll be to find and pursue something you love.  And pursuing something you love is absolutely critical for living a happy life.  I’m truly sad whenever I see a friend update their Facebook status early in the week, exclaiming how excited they are for the weekend to come.

Update: Justine brought to my attention that trying research is also a great way to get a diverse experience.  Researching brings yet another perspective to the table, perhaps shining light on a career you never considered.

Update2: Take a look at Savan’s comment.  I totally agree with him that the my original argument about specialization isn’t true.  As you get further and further down your career path you can either become more specialized or grow a breadth of skills, depending on your interests.  Savan and I have certainly taken a broader skill approach, trying new companies and new things.  And several of my friends have taken the specialization approach, working at Google for several years and becoming uber hackers and code champions.  Thanks, Savan.

Job and Interview Advice for the Inexperienced

Over the last few weeks I’ve been approached by a surprising number of friends, each seeking resume, interview, and general job hunting advice.  Jobs are hard to come by these days, especially for graduates of low-to-mid tier schools, without much prior work experience.  Software Engineering is certainly an exception, with good software engineers still in high demand and good starting salaries not much below $100k.  I want to share some beliefs I have about the job hunt and how younger folks without much experience can distinguish themselves.

The most valuable and marketable characteristic of a young person is their enthusiasm and energy.  If you’re inexperienced you’re biggest asset in a job hunting setting is energy, enthusiasm, and general excitement about life, work, and learning.  Do not let your lack of experience bring you down.  Employers know from your resume that you lack experience.  Don’t worry about that, and don’t lie about that.  Instead worry about showing the employer that you’re passionate about learning, ready to crank, and motivated to succeed in a professional role.  Seriously, the more energetic and excited you are, the less your prior experience matters.  And companies are absolutely interested in hiring smart, motivated young employees that can learn.  Believe in yourself, and they’ll believe in you.

In terms of your resume try and focus your resume on your accomplishments, not your day-to-day responsibilities.  An accomplishment weighs in much more significantly than short-lived tasks you performed frequently.  For example, instead of saying you worked with VPs as a bullet point on your resume, focus more on a project you owned and accomplished.

Lastly, I recommend reading How to Win Friends and Influence People as well.  This timeless book doesn’t have job advice per se, but it provides great tools for networking and making friends.  Such tools will only help you give a lasting, good impression in any interview.