Start-ups versus Big Companies

How they compare in what’s awesome and sucky

Don’t let anyone tell you that one is strictly better or worse than the other. Both have their charms and their cracks.

Start-ups…

have one goal and one goal only: make something valuable enough that people will actually use it. This is really the only thing that matters. In Maslow’s Hierarchy of Company Needs, achieving “product-market” fit is as fundamental as air in order to survive. Everything else that people might gush about start-ups—the culture, the collaborative working style, the cafe decor, the coconut water—might be pleasant points under “reasons to work at a startup” but ultimately won’t matter jack squat if the company doesn’t figure out how it can make something of value with the time and money it has left. Which means in order to maximize their chances for success, start-ups…

This is really the only thing that matters. In Maslow’s Hierarchy of Company Needs, achieving “product-market” fit is as fundamental as air in order to survive. Everything else that people might gush about start-ups—the culture, the collaborative working style, the cafe decor, the coconut water—might be pleasant points under “reasons to work at a startup” but ultimately won’t matter jack squat if the company doesn’t figure out how it can make something of value with the time and money it has left. Which means in order to maximize their chances for success, start-ups… must take big risks . If you launch a product and its core value isn’t resonating with people, making small incremental tweaks or honing in on craftsmanship isn’t really going to make a difference. This is why start-ups have to move at a relentless pace and make quick decisions on major things like completely pivoting the product or hiring/firing people. Even if the decision isn’t optimal, in most cases it’s worse to wait and spend time doing additional research or deliberation than it is to just take the risk with the possibility of a significant payoff. This manner of high-risk/high-reward is also why a start-up will…

. If you launch a product and its core value isn’t resonating with people, making small incremental tweaks or honing in on craftsmanship isn’t really going to make a difference. This is why start-ups have to move at a relentless pace and make quick decisions on major things like completely pivoting the product or hiring/firing people. Even if the decision isn’t optimal, in most cases it’s worse to wait and spend time doing additional research or deliberation than it is to just take the risk with the possibility of a significant payoff. This manner of high-risk/high-reward is also why a start-up will… will make you feel like a directly responsible individual. If the start-up only has 20 people and it succeeds, then you’ll be about 1/20 responsible for that success (give or take an order of magnitude) and you will share in all the fame/glory/riches that comes with it. If the start-up fails, then you’ll be 1/20 responsible for its failure. There’s no air cover above or safety net below. If you and the 19 other people you work with don’t do something, it will not magically get done. It’s entirely up to you and the folks you’ve chosen to get onto this boat with. In fact, it’s also up to you who will be the 21st, or 22nd, or 23rd person to get on the boat. Which is why you’ll…

If the start-up only has 20 people and it succeeds, then you’ll be about 1/20 responsible for that success (give or take an order of magnitude) and you will share in all the fame/glory/riches that comes with it. If the start-up fails, then you’ll be 1/20 responsible for its failure. There’s no air cover above or safety net below. If you and the 19 other people you work with don’t do something, it will not magically get done. It’s entirely up to you and the folks you’ve chosen to get onto this boat with. In fact, it’s also up to you who will be the 21st, or 22nd, or 23rd person to get on the boat. Which is why you’ll… have higher highs and lower lows. Every week in a start-up’s life feels like a rollercoaster. There will be despair when you check your company’s internal dashboard and the number of people using your service fails to go up. There will be extreme doubt when someone you deeply respect gives you a lackluster shrug when you show them what you’ve been doing. There will be flushed elation when that feature you worked all night on goes out in the next few days and you see it live and you remember how it was molded and shaped with own bare hands and you can tell your friends with pride that you did it, just you, all of it. It’s for this reason that start-ups…

Every week in a start-up’s life feels like a rollercoaster. There will be despair when you check your company’s internal dashboard and the number of people using your service fails to go up. There will be extreme doubt when someone you deeply respect gives you a lackluster shrug when you show them what you’ve been doing. There will be flushed elation when that feature you worked all night on goes out in the next few days and you see it live and you remember how it was molded and shaped with own bare hands and you can tell your friends with pride that you did it, just you, all of it. It’s for this reason that start-ups… are a lifestyle, not simply a job, because it’s difficult to separate the success or failure of the startup with the success and failure of yourself and your career, and because the emotional oscillations you feel every day can’t help but bind you closer to the only other people who also knows how it feels to be in your position—your coworkers. And so you are all on that one little boat, spending your nights and weekends together, blurring what it means to be at-work and not-at-work, navigating the waves and the storms in the single-minded dream of one day becoming more than just a start-up but a company of Real Value…

need people who…

operate with good intuition . There’s simply not enough time, money, or people at a start-up to invest in a bunch of research or data-gathering. Good product and people intuitions are what lead to successful outcomes in the arena of high-risk plays.

. There’s simply not enough time, money, or people at a start-up to invest in a bunch of research or data-gathering. Good product and people intuitions are what lead to successful outcomes in the arena of high-risk plays. are well-rounded, jack-of-all-trades . It’s more important to have something be functional and done quickly than it is to be done in the most scalable and robust way. That’s why people who can jump into any number of problems and Mcgyver it are so highly valued at start-ups. Practicality matters; specialists and sticklers for perfection need not apply.

. It’s more important to have something be functional and done quickly than it is to be done in the most scalable and robust way. That’s why people who can jump into any number of problems and Mcgyver it are so highly valued at start-ups. Practicality matters; specialists and sticklers for perfection need not apply. are proactive and don’t mind ambiguity. If you’re looking for someone to give you mentorship, training, or a structured environment in which to learn and grow, working at a start-up is going to be frustrating because those are not going to be priorities for the company.

If you’re looking for someone to give you mentorship, training, or a structured environment in which to learn and grow, working at a start-up is going to be frustrating because those are not going to be priorities for the company. possess a healthy dose of optimism. You have to believe what you’re doing is valuable in order for it to actually be valuable. If you don’t feel that optimism but find yourself attracted to the idea of a start-up for other reasons—fortune or fame or freedom—there are other, more certain routes to achieve those goals.

will make you feel awesome when…

you move like a synchronized swim team where everyone turns together, jumps together, flows and functions together as one unstoppable unit much greater than the sum of its parts. When you go through a big launch, when you celebrate a milestone, when you crack jokes about the future at the end of a long night—there is a buzz and an energy that everyone feels, borne of shared belief and sweat and camaraderie. It’s the meaning of teamness, and it’s a pretty incredible feeling.

where everyone turns together, jumps together, flows and functions together as one unstoppable unit much greater than the sum of its parts. When you go through a big launch, when you celebrate a milestone, when you crack jokes about the future at the end of a long night—there is a buzz and an energy that everyone feels, borne of shared belief and sweat and camaraderie. It’s the meaning of teamness, and it’s a pretty incredible feeling. you continuously launch shit . Like, every week. Or every few days. At a start-up, it’s well within the realm of possibilities for you to start something tonight and have it out in front of people to play with by tomorrow afternoon. Then, you look at some of the big companies around you with their six-month or one-year or three-year roadmaps and you can’t help but point and laugh and shake your head in disbelief.

. Like, every week. Or every few days. At a start-up, it’s well within the realm of possibilities for you to start something tonight and have it out in front of people to play with by tomorrow afternoon. Then, you look at some of the big companies around you with their six-month or one-year or three-year roadmaps and you can’t help but point and laugh and shake your head in disbelief. you witness the very direct impact of someone using what you made. Because most things are done with very few people at start-ups, and because you get incredibly fast and in-your-face feedback, it’s easier to feel a deep emotional investment in what you’re making at a start-up. It’s the difference between watching something good or bad happen to a friend versus watching the same thing happen with a stranger.

Because most things are done with very few people at start-ups, and because you get incredibly fast and in-your-face feedback, it’s easier to feel a deep emotional investment in what you’re making at a start-up. It’s the difference between watching something good or bad happen to a friend versus watching the same thing happen with a stranger. you reflect on what you’ve learned and how many different experiences you’ve had simply because there was no one to rely on and you had to do it.

will make you feel sucky when…

no one uses what you build . Our industry glamorizes successful start-ups like Hollywood glamorizes its actors, but the fact of the matter is that if you work at a start-up, you will probably not change the world. In fact, you will probably fail. The Valley is littered with stories of those who did the start-up thing because they were dissatisfied by their ability to have impact at big companies, only to discover that failing to have any impact at all because you couldn’t build something valuable is a far harder pill to swallow.

. Our industry glamorizes successful start-ups like Hollywood glamorizes its actors, but the fact of the matter is that if you work at a start-up, you will probably not change the world. In fact, you will probably fail. The Valley is littered with stories of those who did the start-up thing because they were dissatisfied by their ability to have impact at big companies, only to discover that failing to have any impact at all because you couldn’t build something valuable is a far harder pill to swallow. it feels like amateur hour and nobody around you actually knows what’s going on . If your company only has 20 people, there’s basically very little chance that for any given problem, there is an in-house expert who knows the very best way to solve that problem. More likely, everyone is just trying to do their best with duct tape and a bit of luck and prayer. I can pretty much guarantee that every start-up has its share of code that feels like spaghetti, designs that feel like they were dreamed up while drunk, disagreements that sound like playground fare, and grand visions that feel completely absent. Welcome to clowntown, ladies and gentlemen.

. If your company only has 20 people, there’s basically very little chance that for any given problem, there is an in-house expert who knows the very best way to solve that problem. More likely, everyone is just trying to do their best with duct tape and a bit of luck and prayer. I can pretty much guarantee that every start-up has its share of code that feels like spaghetti, designs that feel like they were dreamed up while drunk, disagreements that sound like playground fare, and grand visions that feel completely absent. Welcome to clowntown, ladies and gentlemen. nobody invests in you . Here’s a fishing rod and a knife, good luck out there. Start-ups aren’t about you, remember? Everyone is so busy trying to make something valuable that investing in personal growth is pretty much a non-goal.

. Here’s a fishing rod and a knife, good luck out there. Start-ups aren’t about you, remember? Everyone is so busy trying to make something valuable that investing in personal growth is pretty much a non-goal. there’s petty personal drama. When a small group of people spend a large majority of time together in a pressurized, fast-paced environment, there’s bound to be some personal conflict. Add to that the fact that most start-ups have inexperienced managers, and you get a higher likelihood of fairly unprofessional situations.

When a small group of people spend a large majority of time together in a pressurized, fast-paced environment, there’s bound to be some personal conflict. Add to that the fact that most start-ups have inexperienced managers, and you get a higher likelihood of fairly unprofessional situations. you are constrained. At the highest level, this constraint is money, which trickles its way down to everything else like extreme time pressure (we need to ship in 1 month because we’re running out of cash!) or lack of resources (we can’t hire X person or Y firm to help us because we don’t have the cash).

Big companies…

have “made it” to some extent . Big companies didn’t get to where they are without creating some kind of value in the world for people. As a result they’ll…

. Big companies didn’t get to where they are without creating some kind of value in the world for people. As a result they’ll… focus on growing what is already successful . Those days of walkabouting in the desert trying to find that oasis of value are over. A company that has already hit the bar of “have we made something valuable?” generally needs to sustain and bring that value to more and more people. Sheer creativity and brilliant product instincts are no longer what singularly matters, and things like good process and effective operating skills start becoming more important. Which means the company…

. Those days of walkabouting in the desert trying to find that oasis of value are over. A company that has already hit the bar of “have we made something valuable?” generally needs to sustain and bring that value to more and more people. Sheer creativity and brilliant product instincts are no longer what singularly matters, and things like good process and effective operating skills start becoming more important. Which means the company… will be more risk-averse in the sense that it’s going to try really hard to not fuck up what’s going well. Of course, most big companies also try to diversify what they work on and make smaller bets on new initiatives, but their primary focus (and what most of the company will work on) will be growing and optimizing the product or service that put them on the map in the first place. Sometimes, on the outside, this risk-averseness can be perceived as complacency, cowardice, or laziness. While that’s certainly true in some cases, more often than not those criticism tends to be unfair because big companies…

in the sense that it’s going to try really hard to not fuck up what’s going well. Of course, most big companies also try to diversify what they work on and make smaller bets on new initiatives, but their primary focus (and what most of the company will work on) will be growing and optimizing the product or service that put them on the map in the first place. Sometimes, on the outside, this risk-averseness can be perceived as complacency, cowardice, or laziness. While that’s certainly true in some cases, more often than not those criticism tends to be unfair because big companies… wear the burden of higher expectations from people , which means any mistakes you make become more costly. Your clients don’t have the patience to wait around for you to get something right. They don’t want an underdog; they want you to deliver on your promises. So in trying to prevent mistakes, big companies…

, which means any mistakes you make become more costly. Your clients don’t have the patience to wait around for you to get something right. They don’t want an underdog; they want you to deliver on your promises. So in trying to prevent mistakes, big companies… take more time to try and do things right for the long-term. Scalable infrastructure, craftsmanship, company culture, employee growth, and long-term company goals become areas of particular investment. This is why big companies often have great training programs, excellent benefits, and experienced managers, as well as tons of experts across many different dimensions whom you can find to help you with whatever problem you’re having.

…want people who…

are team players , as in, they tend to prioritize the success of the team or company as a whole versus only prioritizing what they individually would want. While start-ups might take risks on brilliant, divisive individuals who contribute a lot output-wise, once the company starts getting larger, it becomes less and less sustainable to have people on the team whom few people want to work with. This is because the contributions of a whole team begin to surpass what any one individual can contribute, so it’s in the best interest of the company to stop optimizing for any one person and start looking for people who are mature, selfless, and are a positive force to be around.

, as in, they tend to prioritize the success of the team or company as a whole versus only prioritizing what they individually would want. While start-ups might take risks on brilliant, divisive individuals who contribute a lot output-wise, once the company starts getting larger, it becomes less and less sustainable to have people on the team whom few people want to work with. This is because the contributions of a whole team begin to surpass what any one individual can contribute, so it’s in the best interest of the company to stop optimizing for any one person and start looking for people who are mature, selfless, and are a positive force to be around. will raise the bar in some dimension. While generalists are highly valued at start-ups, bigger companies can afford to start building up talent and discipline in every dimension. If you are an incredible at performance optimization but can’t write front-end code, your skills might be too specialized for a start-up, but big companies will probably be falling over themselves to hire you. Similarly, it might be hard for an icon designer, even the best icon designer in the world, to join a 10-person start-up if she doesn’t have strong interaction or product skills, but at a large company, because there are other people around who can balance and contribute on the interaction and product front, the icon designer can have a ton of impact raising the bar for the company as a whole, and making the end product that much better.

While generalists are highly valued at start-ups, bigger companies can afford to start building up talent and discipline in every dimension. If you are an incredible at performance optimization but can’t write front-end code, your skills might be too specialized for a start-up, but big companies will probably be falling over themselves to hire you. Similarly, it might be hard for an icon designer, even the best icon designer in the world, to join a 10-person start-up if she doesn’t have strong interaction or product skills, but at a large company, because there are other people around who can balance and contribute on the interaction and product front, the icon designer can have a ton of impact raising the bar for the company as a whole, and making the end product that much better. are high-potential . Big companies have the time and resources to invest in developing young talent, even if they might not contribute a ton right away. Because they operate with an eye towards the longer-term, bigger companies develop robust internship and onboarding programmings and have better mentorship structures in place.

. Big companies have the time and resources to invest in developing young talent, even if they might not contribute a ton right away. Because they operate with an eye towards the longer-term, bigger companies develop robust internship and onboarding programmings and have better mentorship structures in place. are strong communicators who are good at aligning and connecting groups. When you have 2–3 people on a team, it doesn’t take that long for everyone to get on the same page. When you have 20 people on a team, it suddenly gets much more difficult for people to even hold the exact same picture of what’s going on their heads. At big companies, people who are good communicators and who can give a large group of people a clear picture of what’s going on (regardless of their function—engineering, design, pm, etc) end up saving everyone a lot of time, effort and energy.

will make you feel awesome when…

you realize you’re having impact on millions of people , and when your friends and parents and that random person sitting across from you on the subway or that person who wrote a heartfelt message to you halfway around the world gets real value out of the things you work on.

, and when your friends and parents and that random person sitting across from you on the subway or that person who wrote a heartfelt message to you halfway around the world gets real value out of the things you work on. your company invests in ambitious missions or goals because it has the resources to do so . Big companies can afford to put time, money, and people into new initiatives that are high-risk. This is why many big companies invest into research or big 5–10 year moonshot projects. They can take on problems based upon impact or social good or some other worthwhile cause even if these ideas don’t make money for decades (or maybe even ever) because they have the ability to fund it with the portion of their business that is going well. Examples here are free data access for the world, education, self-driving cars, and smarter AI.

. Big companies can afford to put time, money, and people into new initiatives that are high-risk. This is why many big companies invest into research or big 5–10 year moonshot projects. They can take on problems based upon impact or social good or some other worthwhile cause even if these ideas don’t make money for decades (or maybe even ever) because they have the ability to fund it with the portion of their business that is going well. Examples here are free data access for the world, education, self-driving cars, and smarter AI. someone spends the time to invest in helping your career growth. Maybe it’s your manager or mentor, or maybe it’s the person who sits next to you, but when you had a question, you knew who to go to, and you had the confidence that they would go out of their way to help you grow your skills because they’re investing in you and they want you to be successful for the long term.

Maybe it’s your manager or mentor, or maybe it’s the person who sits next to you, but when you had a question, you knew who to go to, and you had the confidence that they would go out of their way to help you grow your skills because they’re investing in you and they want you to be successful for the long term. you get to try a lot of different projects without having to leave your job, because there are dozens or hundreds of different products, teams, and roles at a large company, which means you can probably find an interesting problem, learn new things, and change up your day-to-day without having to do a major life adjustment.

will kind of suck because…

there are too many people involved in decision-making, and it feels really difficult to get anything done . This is the crux of why everyone bemoans the bureaucracy of big companies. It always takes longer and is objectively harder to get 20 people to agree or support something than it is for 2–3 people, even of all 20 people are smart and rational and completely invested in making the best decision for the product. This means a lot more time is spent on communication—writing e-mails, getting together in meeting to discuss and debate decisions, putting together presentations, creating outlets for everyone who is working on something to express their opinion.

. This is the crux of why everyone bemoans the bureaucracy of big companies. It always takes longer and is objectively harder to get 20 people to agree or support something than it is for 2–3 people, even of all 20 people are smart and rational and completely invested in making the best decision for the product. This means a lot more time is spent on communication—writing e-mails, getting together in meeting to discuss and debate decisions, putting together presentations, creating outlets for everyone who is working on something to express their opinion. you feel a looser connection to what your company is shipping. There will be awesome or terrible products your company launches that you had no hand in whatsoever, which will either make you kind of wistful that you weren’t a part of something cool, or angry that the company that you are a part of would launch something so embarrassing. Even on the products you do work on, you will have had a smaller part in shaping it because there were 50 other people who helped make it happen rather than just 5.

There will be awesome or terrible products your company launches that you had no hand in whatsoever, which will either make you kind of wistful that you weren’t a part of something cool, or angry that the company that you are a part of would launch something so embarrassing. Even on the products you do work on, you will have had a smaller part in shaping it because there were 50 other people who helped make it happen rather than just 5. you no longer have context on everything that’s going on. Not knowing everything that is going on, especially when you feel so invested and so a part of the company will feel frustrating. There will be parts of the company that you don’t trust because they didn’t do something the way you would have done it, and you won’t have all the context and background on why. This can make a big company seem less like a cohesive team and more like a collection of disparate factions.

Not knowing everything that is going on, especially when you feel so invested and so a part of the company will feel frustrating. There will be parts of the company that you don’t trust because they didn’t do something the way you would have done it, and you won’t have all the context and background on why. This can make a big company seem less like a cohesive team and more like a collection of disparate factions. there will be decisions made that affect you negatively, through no fault of your own. You might get asked to work on a project, only to have that project cancelled some time later. Or you might be subject to an org reshuffle which makes strategic planning at higher levels easier, but means you need to switch teams and managers. Or, there will be people brought into the company that you didn’t have a say in, and it changes things in a way that wouldn’t have been your preference. A big company is like a pond where tons of different decisions are dropping around you every day. You don’t control—and you may not even be aware of—all the decisions, but you have to deal with the ripple effects.

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