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The security of working at a startup

I recently had an interesting conversation with my grandfather, who was concerned about the economic downturn (recession?) and the impact it may have on my having a job. As I tried to explain to him why I choose to work in startups over big companies, I came to realize that I feel there’s a certain job security in working in a startup, perhaps even better than that of a big company.

In a startup you know when your money is going to run out. In a startup, you are responsible for the existence of own job position. By this, I mean that in a team of ten, you know that slacking off is not an option. You know that the work you do will directly result in business for your company, investment, and hence the ability of the company to pay you. Your own contribution carries a high proportional weight, which means you have a very real effect on whether your position is still available tomorrow.

A big company is an entity with a life of its own. The average employee does not have a sense of their own impact on company growth or business. Hiring and firing decisions are made on a level far enough removed from the average worker that they feel such decisions are arbitrary and unjustified. Employees talk in hushed whispers about looming layoffs without understanding why they are necessary. After all, they are just doing their jobs!

In a bigger company, layoffs due to a downturn in business or the economy are not only possible but probable. In a startup, they are unaffordable; A team of ten that loses one person loses 10% of their workforce, and faces a huge challenge in bringing a replacement up to speed in such a fast paced environment. A company of thousands can lay off handfuls of people here and there in a heartbeat in order to course-correct.

So - which is more secure? Sure you can look at a big blue chip company and say - they haven’t laid anyone off in ten years. But do you know for a fact that they won’t lay you off tomorrow because of factors you can’t even control? Think about that when deciding on your next job, and choose to work in a startup, where you are responsible for your own success (and failure).

I worked for a startup for four years. I now work for a big company and I’m going on three years.

One problem with startups is that there isn’t room for mistakes and if that mistake is from the owner/CEO, then there isn’t much one can do to undo it.

They had potential to be successful by now, if they had followed my advice.

My current employment act as a small company within a large one so I basically benefit from both types. It was a good move.

You are right, there is less margin for error in startups, but my point is that in a small team you know your team mates, and you know yourself, and you know the sum of your efforts is what is making success or failure for the company. I think it’s easy to see when something is going wrong in a small company as opposed to a big one where usually the negative change comes from the top and several levels above you, where you are certainly powerless to have any effect.

Small company within a large one is also very nice - I worked one summer at IBM Extreme Blue which was just like a little startup within the gigantic IBM, and it was also a great experience.