Why you should work at a startup instead of a large company

With all the news about layoffs in large tech companies - Facebook, Amazon, Salesforce to name just a few, a lot of candidates are understandably nervous about vetting the next place they join. Nobody wants to do all the hard work to interview and join a new company only to have issues arise or a layoff occur soon afterwards.

In such times, candidates get understandably nervous about joining startups. As someone who has worked in startups for the last 8 years and worked with hundreds of startups at Rocket, I strongly believe you should actually work at a startup over a much larger company especially in a challenging economic environment.

To put it simply, you are less likely to be laid off at a startup and more likely to land on your feet even if you do compared to a large company.

Here is why:

1. Well thought out hiring decision - unlike large companies who make disjointed decisions (e.g. Amazon was hiring rapidly until they stopped and laid off all of a sudden), the decision making process at startups is more clear. By default every hire reduces the runway for the company so every hire is deliberate and made only if it will enable the company to hit the next milestone faster than without the hire.
2. No chance of project shut down - companies often let go the worst performers when doing layoffs - so you might think you are safe if you are an outstanding performer. However, large companies often shut down or rescale entire projects so even if your performance was exemplary you would still be laid off. Startups by contrast generally only have one product so no chance of that happening in a startup.
3. Visa flexibility even in times of stress - generally if you are on an H1B visa, there is a limited amount of time (30 days) to find a new job or lose legal status. Large companies cannot make exceptions but I have seen startups make exceptions dozens of times where they will find loopholes to keep visa employees employed instead of triggering the 30 day countdown.
4. Competing with large number of peers - when a large company like Amazon lays off 18,000 people all of a sudden, there is a large influx of talent which comes into the market all of a sudden and cannot be absorbed easily leading to unemployment or longer. Even if you are laid off from a startup, it will be at a different time so you can stand out and be hired again.
5. Lower stigma - while there shouldn't be any stigma related to layoffs, often many hiring managers have a bias against hiring employees laid off from large companies. They perceive that these employees were on the bottom of the stack rank. Startups on the other hand, are regularly expected to run out of money and have to retrench and pivot along the way. As such, there is less performance related stigma from being part of a startup layoff.
6. Support network - startups come with built in support networks from the investors/VCs backing the company. If the employees of a startup are laid off, there are a lot of fellow portfolio companies that are quick to hire them as they are coming from a vetted source. Founders and leaders at startups also care about their reputation and spend a lot of time helping employees land on their feet. You usually don't see the same at a large company.
7. Renegotiate compensation - let's say you join a company during an employer's market and end up with reduced compensation in order to land the role. If that company is a startup, you are more likely to be able to renegotiate your compensation in a year after proving your value and after the economy recovers versus a large company which typically have very regimented promotion and compensation change processes.

In addition to these reasons on why working at a startup is less risky than a larger company, there are the usual positives about working at a startup:

1. Meaningful work - many startups are focused on solving important problems or making a positive impact in their industry, which can be rewarding for employees who want to make a difference.
2. Opportunity for growth - startups often offer more opportunities for employees to take on new responsibilities and grow their skills and careers.
3. Exposure to new technologies - startups are at the forefront of new technologies, which can provide you with the opportunity to learn and work with cutting-edge tools and platforms.
4. Collaborative environment - startups often have a more collaborative and team-oriented culture, which can be rewarding for employees who want to work closely with others.
5. Entrepreneurial experience - working at a startup can provide valuable entrepreneurial experience that can be helpful in future job searches or even starting your own company down the line.
6. Flexibility - startups may be more flexible in terms of work hours and benefits. No one at a startup cares about face time - only about getting work done.
7. Potential for life changing wealth - working at a large company is a steady financial outcome. But no one who got rich in Silicon Valley did it by working for large companies. While it is a low probability outcome, the equity associated with startups has the chance to become a large outcome for you.

Overall, working at a startup can be a rewarding experience that offers unique opportunities for growth and innovation. Of course, it's important to consider whether it aligns with your personal and professional goals before making a decision! Good luck with your recruiting.

About Rocket

Rocket pairs talented recruiters with advanced AI to help companies hit their hiring goals and knows technology recruiting inside out. Rocket is headquartered in the heart of Silicon Valley but has recruiters all over the US & Canada serving the needs of our growing client base across engineering, product management, data science and more through a variety of offerings and solutions.