Launching a startup isn’t for everyone. But would you work for one?
The type of organization you work for matters just as much as the position itself. You might be aware of the stereotypes surrounding startups and corporations—startups are young, innovative, and collaborative, while corporations are slow-moving, formal, and hierarchical. There are benefits and downsides to both, so how do you pick between the two? The key is finding a work environment in which you can thrive.
The Difference Between Startup and Corporate Culture
Every company is different—regardless of size—and there are a few key characteristics that ring true about startup and corporate culture.
Startup Culture
A startup environment is typically a fast-paced culture in which creativity and communication are valued. Startups tend to be smaller than large corporations, especially in the early stages of growth, enabling employees to build strong relationships and freely exchange thoughts and ideas. They’re also capable of acting nimbly to adjust business practices and hit shifting goals.
Startup culture is often perceived as being less formal than that of a corporate environment, and usually puts less emphasis on hierarchy within teams.
Corporate Culture
A corporate environment, on the other hand, is often characterized by a more structured, formal approach to company culture. Because many corporations employ thousands of workers, it’s not uncommon for employees to be unfamiliar with colleagues outside of their immediate teams or departments.
With years of experience under their belts, corporations tend to have concrete procedures, protocols, and guidelines that govern daily operations. This rigidity can sometimes have the effect of slowing down innovative processes.
How do you know which work environment you’ll thrive in? There are a few major considerations you should make before deciding to join a startup or corporation, which may indicate which culture is a better fit for your personality. Read the five statements below and see which traits resonate most.
Startup Culture Could Be Right for You If…
You Love a Fast-Paced, Ever-Changing Work Environment
Startups pride themselves on moving quickly. It’s likely that the role you were hired for will look drastically different after a few months. This means working through ambiguity, wearing multiple hats, and embracing change. If this sounds exciting to you, a startup might be a good choice.
If this sounds a little unnerving, you might prefer corporate culture. In a corporate environment, you can benefit from greater stability and well-defined roles. You’re expected to hit the ground running on day one with little to no orientation at some startups, but in a corporate environment, there is typically a well-developed protocol for onboarding, setting you up for success in your role.
Creative minds will thrive in a startup environment. Small companies often encourage experimentation and out-of-the-box thinking. The larger the company, however, typically the more regimented and resistant to change.
Related: 11 Questions to Ask Before Joining a Startup
You Don’t Shy Away From Responsibility
Being in an early-stage startup means having a lot of responsibility—not only to perform your duties, but to take responsibility in the event the company or your team fails. If this sounds stressful, you might consider taking the corporate route, where your individual role is less visible.
But you may thrive in this high-pressure environment. A smaller team means the ability to take on more responsibility and the flexibility to get involved in different projects. If well-defined roles and responsibilities are more your speed, though, you might consider pursuing a corporate role.
With the flexibility of working in a startup environment comes the opportunity to advance quickly. Corporations typically have a more rigid, slow path to the C-suite. After all, it’s called climbing the corporate ladder not sprinting. At a startup, it’s not rare for someone to start in an entry-level role and quickly ascend to a senior-level one.
You’re Passionate About the Work
Succeeding in a startup environment isn’t always easy. In a new venture’s early stages, budgets are often tight and teams tend to be small, forcing many employees to wear multiple hats and perform a range of tasks, often without commensurate compensation.
While compensation is important, it isn’t the only reason individuals choose to work at a company or in a particular industry. Other factors, such as passion, play an important role in boosting employee engagement and zeal. When you’re passionate about the work you’re doing or the mission your company is pursuing, it’s easier to put up with the inherent uncertainties of startup life.
Corporate Culture Could Be Right for You If…
You Value Work-Life Balance
If you prefer a nine-to-five role, you’ll likely enjoy working in a corporate environment. The lines between work and home blur in a startup. With limited resources and staff, it’s the norm to work long or unusual hours. You might be expected to answer an email after 5 p.m. on a Friday or hop on a Sunday conference call.
You should also consider your hourly rate. Comparing two identical jobs with the same salary—one at a startup working 60 hours per week and one at a corporation working 40 hours will result in a lower hourly rate at the startup since you are working more hours than you would at a corporation.
You Prioritize Compensation Over Passion
Startup success stories will make you believe that you can get rich if you work for a company that takes off. The reality is: Three out of four startups fail. Even if you join the one successful startup, you won’t reap the benefits immediately.
To be in on the ground floor of a new venture is exciting but far from glamorous. In the early stages, the founders often scramble to find funding and money is tight. Startups typically can’t offer competitive salaries. Benefits like health insurance or paid time off might not be available until the team grows.
To make up for this, several startups offer equity in the company, which, again, only benefits you if the company is a success. Of course, there are often other more intangible benefits, like free lunches, weekly happy hours, nap pods, casual dress code, and a more laid-back, social work culture.
At a corporation, you can count on competitive salaries and benefits packages, as well as the stability of being part of an established organization.
Essentially it’s a choice about your priorities and stage in life. Are you willing to accept a lower salary to pursue your passions? Is financial stability a priority right now? Thinking through these questions should provide a clearer answer.
Choosing a Path
Startups and corporations aren’t mutually exclusive. You may find qualities of startups in large companies and vice versa. In fact, many corporations have started creating teams dedicated to innovation in an effort to respond more quickly to change. The question is: Are you interested in entrepreneurial work?
The principles of entrepreneurship aren’t strictly related to starting your own business. Instead, they focus on being able to identify business opportunities, explore the risks and rewards of pursuing a venture, and develop a thorough business strategy. Each of these skills are valuable to startups and can help you prepare for a leadership position at a startup company.
If you’re looking for ways to become a valued member of the next big startup, explore Entrepreneurship Essentials. The four-week online course can help you identify opportunities, evaluate and validate an idea, and understand how to pitch investors.
(This post was updated on May 14, 2020. It was originally published on November 1, 2018.)
