Why You Should Not Join a Startup Company – Debunked!

, HR & Operations Manager
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While doing professional recruiting for high-tech startups over the past few years, I frequently hear the same handful of recurring concerns from candidates. While some of these issues are more real than others, I believe that the other side of the coin in each case is so much more valuable than any downsides! Here are the top five concerns I hear from candidates, and the flip side of each…

1
I am afraid that the company will run out of money – and I don’t want to have to look for another job soon. Also, changing jobs frequently doesn’t look good on a resume.
 

Because it is true that startups do sometimes run out of money, it is important to carefully examine any startup you would consider joining. Some of the things to focus on are how much money the company has raised, how recently that fundraising occurred, how much “runway” the company currently has and who has funded the company to date. In general, if you find that a particular startup raised a significant amount of money from top-tier investors, this concern should probably not worry you at all.

Having said that, there are no guarantees. But, it’s important to weigh the benefits of joining a startup versus a larger, more established company – because the rewards may significantly outweigh any increased risk!

Small companies offer much greater opportunities for professional (and personal) growth than large companies. This is a natural result of being a much larger part of the team, with more responsibility, greater ownership of the product, fewer layers of management above you, and with more exposure to the business side of the product you are developing. Even in the worst-case scenario of a relatively short time with a company, all of these factors actually make your resume much stronger, not weaker.

Furthermore, when you have a much greater relative contribution to the success of a company, there is often much greater job satisfaction than when you are a small player in a large company.

2
I am concerned that the company will not provide as good a compensation and benefits package as a larger company.
 

This concern might certainly be relevant in certain situations, but it is very often simply not the case. Managers at startup companies (and their investors) are acutely aware that the success of their business depends primarily on the people they have on board, and this means that they will do whatever they can to attract the best talent they possibly can.

Well-funded startups can afford to provide very competitive compensation packages – and they are often willing to pay more than a good candidate is currently receiving at a larger company. You owe it to yourself to at least explore what job opportunities are out there in the startup world and see if you can’t actually get a higher salary than in larger, more mature companies.

Furthermore – and this is a biggie – most startup companies offer employees generous stock option plans with huge financial upside potential. Employees who join a startup in its early stages stand to gain tremendously if the company reaches an exit (usually, an acquisition or IPO). While some employees do receive stock options in larger, more established companies, those shares are almost always a tiny fraction of the outstanding shares; the big potential gains lie with joining a company in its earliest stages.

3
Young startups are not as organized as larger companies, management is often less experienced, and the product roadmap keeps changing.
 

Again, these concerns may be true in some startups, but it’s never a good idea to rely on generalizations. If a company is led by people with little prior experience, these concerns are more typically on target. However, if a company’s leadership has proven itself and achieved prior successes, these concerns can almost always be put to rest.

Therefore, it is important to look closely at who the founders and/or managers are in any company – not just startups. Part of this might be speaking with people who already work in any company you are considering. A good indication of leadership quality is who the company’s investors are; it is well known that experienced venture capitalists invest in a startup primarily because of its leadership team. So, you can probably put aside these concerns if the startup you are considering is backed by a large and/or successful investor.

Regarding any apprehension about frequently changing product roadmaps, this state of affairs is often a part of high-tech companies of all sizes. Because tech-industry market factors change rapidly, it is the most agile, forward-looking companies that tend to be the most successful. These changes can be due to things like pivoting to a new market recently discovered, responding to an unexpected threat, or quickly taking advantage of a new opportunity. The nimbleness typically exhibited by smaller startups, that are able to quickly change direction, is a huge advantage over larger competitors – not a weakness.

Working in a small company’s dynamic, fast-paced environment also has many advantages for employees. For example, learning to be flexible and adapt on the fly makes you a stronger employee (and a stronger person!). Many people find it more fun, exciting and challenging to work in a fluid environment where everyone needs to adapt quickly to changes, as opposed to a staid job where nothing much changes over time.

Perhaps most importantly, because you are more involved in the business side of things in a smaller company, you can have more direct influence on the company’s decision-making. Many startup employees describe this factor as one that contributes to greater job enjoyment and satisfaction.

4
I am concerned that, in a small company, I will be expected to work outside my field of expertise.

This is generally true. And it is actually a very good thing, if you are the kind of person who understands the value of moving beyond your comfort zone!

Many workers, unfortunately, end up remaining in the same narrow job function for many years. While this might be easy or comfortable, it hinders career development and slows progress. In large companies, it’s rare to get an opportunity to expand beyond your job description’s narrow boundaries, something that is often stifling for ambitious employees.

In small startups, it is common for employees to be given (or to volunteer for!) additional responsibilities (beyond their core job) that expand their horizons and require them to learn and practice new skills. These additional skills can often significantly increase the person’s value to employers, present and future alike. In fact, one of the most important aspects of a resume being reviewed by a potential employer is how “multi-disciplinary” the person is. Having experience in many different areas is one of the most desirable characteristics that employers look for in a candidate.

5
When working in a very small team, I won’t have as many learning or teaching opportunities as in a bigger team, and there are fewer social interaction opportunities.
 

On the one hand, it’s true that a person who can learn from others gains a lot from working with many other professionals. On the other hand, it is well known that there is no better “school” than working in a startup – because startup employees tend to be involved with so many different areas and have so much responsibility, they tend to experience a faster learning curve than employees in large companies.

The truth of the matter is that even in a large company, most employees tend to work with the same people in their own limited team, day in and day out. At least in a startup, the same small group of people with which you work encompasses people from nearly every discipline – technology, business, management, etc. In other words, you will probably learn more in a small company, not less!

Additionally, when you have fewer people to learn from, you can end up actually learning more, because you will search and learn and think more on your own; these are important skills for your long-term professional growth.

In terms of the social aspect of being in a small company, there are two important factors to keep in mind. One is that even if the company you join is small now, the small-team situation in fast-growing startups doesn’t usually last long!

The second factor is the fact that there is a big social advantage of being part of a small team: you can be part of the hiring process and have more influence on the hiring of future people on your team. Due to the more personal hiring process in small startups, these companies tend to hire people who are perfectly suitable for the existing team members. When you fit in well with the other people on your team – especially if you had a say in who they are! – you will enjoy all the social and professional benefits of working with a group of people who are well-suited to one another.

Conclusion

On a personal note, I recently joined this small startup company myself. I suspected that being a big part of a small company is much more suitable for me than being a small part of a big company – and I was right!

My current workplace enables me to take a lot of initiative, and to influence company decisions, much more than in my previous jobs at larger companies.

I know the whole team on a personal level, and this has a huge impact on my role as HR & Operations Manager. The employees – as well as the candidates interviewing for our open positions – surely benefit from it as well, because everything is tailor-made to their needs and preferences. There is no comparison to how it was at my previous job at a large company.

When looking at my own growth, it’s clear that I will benefit from my exposure to, and involvement with, a wide range of business aspects, working closely with every influencer in the company, and acquiring a lot of new knowledge as time goes on. It’s something I recommend to everyone to try at least once in their career!

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