Reasons to Join a Startup over a BigCo
Anyone involved in hiring for a successful startup faces the challenge of competing offers from BigCo’s. With our hiring this year, I have made particular note of these discussions and how they unfold.
For example, while in the middle of one of these recent conversations, I realized that the particular individual had spent several years forming a certain vision in their head of the glory of landing a BigCo job. This individual had taken a number of steps (e.g. pursuing additional degrees, making connections, going through the BigCo application process, etc) to pursue the BigCo position. This individual has spent time dreaming of the BigCo job and visualizing the associated pride of being able to tell friends, family, and former colleagues that they are an employee of the prestigious BigCo. The household name recognition of the BigCo job appeals to many people.
The trick is to help the prospective employee to understand that household name recognition undersells themselves. Top notch employees know that BigCo’s would be lucky to have them on-board; the BigCo name on their resume is not an ego-booster. Rather, ego-boosting comes from pursuing substantive work with fast-moving, high caliber colleagues.
There are many reasons for prospective employees to choose a successful startup over a BigCo. Successful startups can provide the prospective employee with more potential upside while maintaining parity with BigCo’s on the downside, as follows:
- Compensation: Startups have the alluring potential for a big upside. Early employees of successful startups tend to do very well financially. They are able to receive compensation through many avenues: 1) direct compensation in standard salary and benefits, 2) profits interest units which enable the individual to receive a payment in an exit event (e.g. acquisition or IPO), 3) exit event take-care-of-yous (e.g. many startups make take-care-of-you payments to their early employees, unrelated to any profits interest unit payments), 4) potential for higher wages as the profitability of the startup grows (e.g. early employees in highly profitable startups tend to receive much higher wages than their peers in BigCo’s because the startup founders are rewarding the early employees for taking the risk). BigCo’s tend to offer high initial offers to get people in their doors, but the increase thereafter tends to be small and limited by a corporate model of what the job’s wage should be.
- Prestige Opportunities: Startups offer employees more opportunity to establish a reputation for excellence in the industry. Startups move faster and generate more press per employee than BigCo’s. Startup employees get a lot of visibility and establish great track records of ownership on big projects.
- Worst Case Scenario is a Soft Landing: In the worst case scenario, the startup does not work out for the employee. The good news is that the BigCo will still be hiring. They are always hiring. BigCo would be lucky to get you, and they know it. They wanted you before, and they will want you again. Even more than before. You have lived at the cutting edge. You have done things the BigCo dreams of doing.
Many prospective employees have not considered all the reasons for joining a startup over a BigCo. It is important for successful startups to spend time helping prospective employees to understand the great opportunity they are offering.
What other reasons are there to join a startup over a BigCo?