As I write these words, the Indian tech startup ecosystem is blossoming. We have learned a lot from other countries about technology and startups. The government is on its way to creating policies which make it easier for people to start new businesses, the investors are waiting with their capital to invest in promising startups and more people than ever are taking a plunge into entrepreneurship.
Today fresh graduates really have a choice whether to work in a startup or not. 10 years ago this was not a viable option for most people.
Becoming a tech entrepreneur yourself is a great career option too. But in this post we will look at the pros and cons of working in an early stage tech startup vs. working in a well established IT organization like Infosys, HCL or Accenture.
I have had a pretty good ride with startups myself. I ran my own tech startup for 4 years after my graduation and had an exit from it. I worked in a relatively big IT export services company for a year, then worked in two well known Indian startups after that – Exotel & Practo.com. I will be working with a lot more tech startups in India from time to time and start new companies myself again.
I have been lucky enough to have had different experiences in all these career options and it has helped me explore the world of startups and entrepreneurship. One thing that has been crystal clear for me through these journeys are the pros and cons of different career options.
From my experience, here are some of the reasons why you should work in a startup.
Contents
1. Massive Learning
The amount of things that you learn by working in a startup is probably twice or thrice than that of a big organization with 1,000+ employees. The first startup I worked for had only 25 employees but we were getting a lot of things done at a breakneck speed. I was blown away by the possibility of how much a small team can create given such less time and resources.
There are less formalities, less boring meetings, less approvals and more ownership and freedom for what you are doing. Due to less friction, you end up doing more work and hence you learn more in a shorter period of time.
When I start my own company again I would prefer a candidate who has worked in a startup just for a year than a candidate who has 2-3 years experience in the same field but has not worked in a startup!
2. Work Satisfaction
Big corporates are famous for their dirty politics. I am not saying that everyone is bad in such firms, of course there are a lot of visionary leaders in big companies but your chances of bumping into a bad manager are relatively high.
Many times, you do a piece of work and someone else takes credit for it. You want to do something creative, but your manager doesn’t allow it because he/she is afraid that you would overshadow him.
Since startups have a small team, everyone knows what kind of work you do and you will get valued. (On the flip side the only way to look like a hard worker is by working hard!)
New ideas and initiatives are encouraged and there will not be a need to get formal approvals to do new things. As a developer if you think that adding a small tweak to the user interface will help your customers, you can just inform your team and go ahead with it. You may not get a monetary reward for it, but your customers will be happy and that would give you immense pleasure.
Whether you work in the development team, marketing team or customer support, there are plenty of opportunities to talk and meet with your customers. You will see how your work is adding value to your clients. This motivates you to go the extra mile to serve them. In the process you will learn what entrepreneurship is and what value creation really means. Yes, you are really making the world a better place by doing your part of the work.
3. People & Culture
Except a few, most of the startups have a great work culture. Startups do not waste energy in unnecessary things such as insisting on formal dress codes, having to follow up with minutes of meetings, minimum clock-in hours at the office, leave policy and so on.
All that matters is the work you do. How much value you add to the organization and hence to its customers. Mostly it wouldn’t be a big deal if you wear t-shirts, come late to the office, made a spelling mistake in your email, didn’t adhere to the HR policy while taking a leave and so on. I don’t say all startups are like that, but most startups don’t have time to make an issue about small things that do not matter.
In startups people around you are more like a family than co-workers. There are mostly no politics and deception because no one has time to play such games.
4. A Platform to become an Entrepreneur
If you have ever dreamed of becoming an entrepreneur, working in a startup is the best place to get started. Since startups are small and mostly transparent in what they do, you will learn a lot more about the business in a holistic manner.
If you join a very big organization, you most likely will have no idea about the needs of the customer, the price they are willing to pay for your solution and whether your work has really solved their problem.
You work, you get paid and the only thing your will learn is how to save yourself from getting blamed when something goes wrong. This will help you only if you want to climb the corporate ladder.
But for people like you & me who believe in doing the work, corporate politics is a dirty game to play and the chances of becoming a senior manager or VP in an organization with tens of thousands of employees is very less.
Again, I am not here to give a bad rap about big and well respected organizations. Apart from my own experience, I have a lot of friends working in such firms and it looks like I have a fair idea about how things are in such companies. I am sure you will agree with me on this.
In a startup, you will do a little bit of everything when some important things have to be done on time. I have worked mostly in digital marketing but when the need arose, I did a bit of sales, a bit of customer support and a bit of fire-fighting when a customer was pissed. Such experience is priceless when you want to start your own company some day.
Another big benefit of working in startups is that you will network with great people. You will become friends with the CEO and co-founders. If you add good value and move on, no one is going to get angry at you that you are leaving them and will be more than happy to help with when you run your own startup with their contacts, resources and experience.
5. Remuneration & Stock Options
There is a misconception that Indian startups don’t pay well. If you do your homework, you will find out that if you are well educated, intelligent, hardworking and have the right attitude, a 5 year work experience could get you double or triple the salary compared to a traditional IT company in India. If the take home salary is not that much, you will be compensated with stock options of equivalent value.
You will get stock options which is usually in the range of 0.05% to 0.5% with startups which are a few years old. For startups that are less than 1 year old, you may get 5% to 10% stock but in that case you will be more of a co-founder than an employee.
0.5% may not look like much. But imagine you are working in a company that is valued at 10 Crores when you join. 0.5% of that is 5 Lakhs. This may not look like much in the beginning. But startups grow very fast and within a few years your company can become a 100 crore company.
If the startup is acquired, your 5 Lakhs becomes 50 Lakhs and that could be more than enough to fund your own startup or take a mini-retirement.
Redbus.in had an exit at 800 crores approx. An employee who had a 0.5% stock would have cashed out 4 crores when Redbus was acquired by South African Naspers group. An employee who only had a 0.05% stock would still have cashed out 40 Lakhs! Such exits don’t happen often but you have to consider the possibilities.
The Downsides
You cannot have a cake and eat it too. Roses come with thorns. For some people working in a startup is not the right thing. Here are the down sides:
- There is a bit of risk that your startup could fail and your stock options will becomes worthless. But you would still come out with priceless learning and experience.
- The amount of work involved in startups is higher. Sometimes you may have to work on weekends as well. Sometimes more than 12 hours on a weekday. Startups are for people who want to work hard, not for people who want to look like working hard and take home a paycheck every month.
- You may not work in a fancy looking office building in a tech park. Your relatives may not have heard of the company you work for. You may not get opportunities to travel abroad. Sometimes you may not even have A/C in your office. Startups are for people who want to learn more and get more things done, not for people who want to settle in a job with comfort.
Conclusion
If the downsides do not bother you, I am sure by now you are excited to work in a startup!
In my next article I will tell you about how to choose the right startups to work for & how to get a job in a such startups. Stay tuned…!
Really enjoyed the content and thrilled to know the potential that start ups bring with them.
Hello Deepak,
Thanks for a wonderful post. I am sure many people will inspire from this post after reading this post. :)
“Redbus.in had an exit at 800 crores approx. An employee who had a 0.5% stock would have cashed out 4 crores when Redbus was acquired”
is it a theoretical calculation? or you know redbus/other employees who have made money from startups?
It will be good if you can share specific success stories of startup “employees” who have made money. There are many in US.