Eight Reasons To Work At A Startup

Why You Should Work At A Startup

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I keep getting this question time and again from many high-potential, intelligent, and bright engineers that I convince to hire. They repeatedly ask this question in some form or the other. Most of the candidates do not understand what the trade-offs are working at a startup vs. FAANG. (For those of you who are not from the tech community, FAANG stands for Facebook, Amazon, Apple, Netflix, and Google — a group of companies that pays people exorbitantly high salaries with a very comfortable life :)). Therefore, many of the candidates end up joining larger organizations, and we (as startup founders) end up on the losing side of the battle. Given my conversation always end up with a few basic questions that the candidates ask, I wanted to go ahead and codify my framework and thought process so that I can refer candidates to it later on.

Financials

Let’s first address the elephant in the room, i.e., making the moolah. You will get rich not by hitting the extra 25% in a large company (read FAANG) but by hitting the #startup that grows 10x in your tenure there. The basic idea behind getting richer is straightforward. You need to make substantial jumps in your income compared to your current standard of living. Most of the candidates who go into price wars optimize for 10–15% extra salary. Unfortunately, market dynamics dictate that you still do not escape your current standard of living and therefore end up in the same bucket, albeit after a lot of struggle without any significant gains.

The second point that I usually make is that if you are in tech, you may live in penury is low. Even if you know the basics of coding, the power of the technological revolution and the knowledge economy we exist in today will keep you busy throughout your life and help you earn a decent living in the worst-case scenario. Given you already have a safety net, why not take a few bets and fly.

In tech, you will never run out of money. Take 5 bets in your career and if one works out, you will make it.

Talent Density

The second part of this framework that I think is mostly true is that barring a few outstanding organizations like Google, Netflix, etc., which have maintained their hiring bars high throughout their lifetimes, most of the prominent organizations fall prey to the curse of scaling and run into problems of dilution. It results in low talent density in the organization.

You are the average of the 5 people you spend the most time with.

And this remains true in any organization, any walk of life. Promising startups, owing to their small size and necessity to survive, tend to hire brilliant folks. These people usually are builders, problem-solvers, generalists, and open-minded risk-takers. All the traits that you would want to imbibe in your career as you grow.

Organizational Friction

In my world view, there are two types of people: those who hate bureaucracy and those who say they like bureaucracy. Every large organization, by its nature, starts to be ruled by a group of policy mongers. It, in turn, tends to lead to projects that move at a snail’s pace and get abandoned due to organizational overheads, changes in priorities, misalignment, etc. Smaller organizations tend to be on the other end of the spectrum. They tend to have lesser organizational friction, lesser processes, and agile and focus on transparency. It helps you grow at a faster pace and values contributions from all the members of the team.

Impact

In large organizations, you will be 1 in 100,000 and quickly be hit by the cog-in-the-wheel syndrome. This tends to happen due to just the massive scale at which startups have to operate. This makes it hard for individuals to be able to create a perceivable impact in the organization. Large organizations usually care a lot about the tail of the problem and make incremental progress on the product/service they offer. In a startup, everyone knows everyone. They are set up as small families (size ~5–10) to a village (~100), wherein everyone knows about what every other person is working on. It helps you see the impact of the work you are doing and keeps you motivated to do more & better work.

Networking

You will have great mentors and direct access to leaders in a startup. You will find like-minded people who will become your partners in your future journey. You get access to investors, leadership, etc. that is not quite hard to do in a large organization. As you grow, your network becomes the most critical asset you take away and helps you build upon your experiences. In large organizations, you start to run into a pretty similar set of people due to the hierarchical model, and therefore your network starts to become less and less rich.

Brand Fallacy

Quite often, people get into the trap of attaching themselves to the company’s brand that they are working for. While having a FAANG on your resume indicates that you can clear their interview bar and are good technically, it is still the skills you acquire throughout your work-life that matter. Do you understand the work you do deeply, what has been your contribution to the team you have been a part of, and what has been the kind of work you have done in the team? These are the factors that matter more. Being a part of success with little contribution will look bad too on your resume, as smart folks will quickly figure it out in subsequent interviews. Similarly, contributing heavily to a less successful project may set you for a higher level of success in the longer run.

Your brand is not what you associate with, rather what is associated with you.

Team-Work

In large organizations, you are competing with your teams that are pitted against each other. In small organizations, you work as a team that swims or sinks together. This teaches you how to work together and grow the company’s success pie.

Organizational Mindset

A lot of large organizations tend to be rear-view looking, cautious, and not bold enough. Startups, by nature, have to be brave. Else, they perish. Startups are optimistic and bet for growth. Large organizations play safe and hedge against change as well.

Cheers,
Ravi.

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