More Thoughts on Reasons to Join a Startup over a BigCo

July 24, 2013

in Team Building

My post yesterday on reasons to join a startup over a BigCo generated some interesting comments which deserve more discussion. I want to discuss two of those comments today.

Let me start by saying that there is nothing wrong with working for a BigCo. BigCo jobs come with general public acceptance and default prowess. They are generally pretty safe bets, though there are notable exceptions. BigCo employment is assumed by many to be an indicator of career success. My goal here is to show that there are many reasons to join a successful startup over a BigCo, which are not as generally understood.

The first comment comes from Peter Hamilton on Google Plus:

phamilton

Peter is referring to the “compensation” section of yesterday’s post. I think the difference between what I said and what Peter is saying has to do with how I am limiting the discussion to “successful startups.” Successful means the startup has found product/market fit, is doing over $1M in revenue, and has a bright future. I am purposefully saying that with two competing offers in hand, one from a successful startup and one from a BigCo, an individual is likely to make more money in the long run from the successful startup than from the BigCo. I list 4 reasons why in yesterday’s post. The BigCo may pay marginally more than the successful startup (e.g. maybe a $10-20k yearly salary difference), but the rewards of exit value or increased future salary at the successful startup are likely to be more than the BigCo.

Note that this is entirely different than pre-revenue startups. The financial outcome and risk profile of a pre-revenue startup is very different than a successful startup, and should be treated differently when evaluating competing job offers.

As a side note, since most BigCo jobs are in expensive places (notably CA, Boston, and NYC), it is helpful to use a cost of living calculator to see the true apples-to-apples comparison with our Atlanta-based company. Go read Stephen Fleming’s discussion of Startups for Grownups to see pictures depicting the stark difference in particular of Atlanta home purchasing power relative to Silicon Valley.

The second comment comes from Jim Vaughn on Twitter:

jimvaughn

I started out with AccelerEyes while still a student, so I’m not sure how tough it would be to leave a BigCo mid-career to do a startup. However, some of the most successful founders I know have all had BigCo careers prior to starting their companies. There are certainly advantages to having work experience at a BigCo in the industry before leaping out into a startup. However, many people become accustomed to living at the edge of their BigCo income and find it difficult to scale back enough to start their own company.

What are your thoughts on this discussion surrounding considerations individuals must make when evaluating a job offer from a successful startup versus a job offer from a BigCo?

 

Previous post:

Next post: