The pros and cons of start-up work

Over 40% of positions on cord are in companies between Seed and Series B funding rounds. Working in a start-up is an increasingly commonplace option for engineers given the rapid growth and scope for innovation within the technology industry.

There are positives and negatives to working in a start-up, and these are outlined here to provide guidance to anyone considering whether to work in a small start-up, or a larger, established enterprise.

On that note, it should be remembered that there is a spectrum of companies of all sizes from single-person businesses to multinational conglomerates. While the below contrasts two relatively extreme ends of this scale, most companies are in between. Further, every company is unique: working at any given company will be impacted as much by factors like leadership, culture and industry, as by size alone.

Pros

Faster growth

In a smaller organisation, each individual typically has to wear multiple “hats”. This can mean a diversity of exposure to different projects, tools, technology and methods, which can greatly increase the speed at which people learn.

Additionally, in an organisation that grows fast, the scope of every position in the business tends to grow with it. These factors can mean that start-ups offer faster learning opportunities than larger organisations.

This depends, however, on how well-managed learning and development is in any given organisation. The greater size and stability of larger companies can provide them with greater resources to offer structured training alongside day-to-day work, provided that management perceive the value in doing so.

Alignment

Start-ups are typically founded with a very specific purpose in mind. It is the hallmark of successful start-ups that they focus on a single problem, with a specific set of people who will benefit from the product.

As companies grow, their offering diversifies, and this can make it harder to identify with the overall end result of a larger organisation compared with a smaller one.

Impact

Linked to this is the fact that, in a smaller business, each individual’s work is more directly impactful on the organisation’s goals. Workers in a start-up are larger fish - their work is more significant towards the end result - although frequently, the pond can be smaller.

Sociability

In a smaller business, it is easier to build a close relationship with all the members of that business. Start-ups tend, as a result, to have more close-knit company cultures and stronger social bonds between employees than larger companies.

However, the same effect can happen in large organisations that operate in small, close-knit teams, that effectively then become their own start-up cultures within the larger organisation.

Flexibility

Start-ups thrive on flexibility. One of their competitive advantages over larger organisations is that their smaller workforces require less bureaucracy and structure in order to function harmoniously.

This can result in much more flexibility for start-up workers in areas like dress code, working hours and location, and the processes needed to put work into production.

However, there is a flip-side to this flexibility, discussed in detail below: it can work both ways.

Ownership

As well as the psychological ownership that comes with greater alignment towards goals, start-up workers are relatively likely to own part of the organisation in the form of shares or options. While often a compensation for the start-up’s lack of cash for higher salaries, these shares or options can have significant upside potential if the business is successful and its value increases substantially.

Cons

Salary

As above, many of the “perks” of working for a start-up compensate for the fact that they are, typically, cash-poor.

While investor-led businesses will endeavour to compete with larger organisations in the job market, it isn’t easy for them to, especially if they are not yet revenue-generating.

That said - when comparing two offers, one from a start-up and one from a larger organisation - it can be a positive sign if the start-up’s salary offering is close to or the same as that of the larger company.

Instability

Start-ups, especially early-stage ones, have a high risk of failure, particularly during difficult economic periods. 20% of start-ups fail within their first year, and 60% fold during their first three years.

People working for a start-up therefore face an elevated risk of redundancy compared to more established firms. Additionally, if the business fails, any remuneration in the form of shares or options will be worthless.

It should be noted, however, that it is not uncommon for larger organisations to make large reductions to their headcount, particularly during the same kinds of economic conditions that make start-up survival difficult.

Work-life balance

Given their constant struggle for survival, working for start-ups can be incredibly demanding. They are not, typically, environments in which individuals can coast, or hide behind others. Start-up folklore abounds with clichéd tales of late-night pushes to release features before an existentially critical deadline.

While they can be more flexible places to work when things are going well, when the going gets tough, start-ups get tougher.

Impact

There is also an inverse perspective to the greater impact that an individual can have within a start-up. While, in that instance, they might be a big fish, they will inevitably be in a small pond.

While a worker in an enterprise company is a smaller fish, the ripples they can generate given the reach and resources of an enterprise company can be much larger. An engineer may only work on a small part of the app itself, but their work can quickly be used by millions of people worldwide.

Case-by-case

Just as there are pros and cons to working in start-ups versus larger companies, so there are often caveats and exceptions to these pros and cons themselves. Ultimately, companies and job offers should be judged on a case-by-case basis.

Individuals often find they have a preference that works for them: those that thrive in larger organisations can struggle without the structure that comes with them, while those used to start-ups might find the transition into such structure stifling.

Anyone unsure about where their strengths should feel encouraged to experiment between the two. After all, a decision to work in a smaller company is not irreversible, and can have significant upsides if the gamble pays off.