I spent 10 years in corporate America before making the leap to the startup world. I wasn’t actively trying to make the switch but during my last few years in a big company, I was yearning to be involved with something more nascent where I could have a seemingly sizable impact on the outcome. I felt like I was just another number among thousands of employees at a F-500 and was at a point in my life where I felt I could take the risk. It’s worth clarifying as well, “startup” can mean very different things. A company that just raised a few million dollars will be very different from a late stage pre-IPO startup. Most individuals who do make the switch from corporate to startup typically join the company during later stages as its less of a culture shock. I’ve heard from numerous founders that they are leery of bringing in a hire from the corporate world in the early days of the business for fear that they won’t function well in a world that isn’t yet defined and lacks a matrix org structure. To be sure, it’s not for everyone but here are my thoughts on making the change.
- Living in the gray – if you find comfort in a lot of processes and staying in your area of expertise, a startup might not make sense. Processes are often non-existent, roles are fluid and at any moment the entire business could pivot (especially in an earlier stage enterprise). You have to be comfortable with this dynamic of potential instability. As the startup grows and becomes more mature, this is likely, however, to improve a bit. I have a friend recently who was hired to lead sales in a young company and is now expected to lead strategy instead. She’s never had this type of role before but is learning on the fly. Sink or swim. For some this is exciting and they’re up for the challenge for others it can be too far out of their comfort zone.
- Compensation – It’s likely you’ll receive a lower base salary than you were making in your previous role. But on the flip side, you’ll get stock options, a higher bonus target and potentially other perks like free lunches, etc. One note of caution on the options – the headlines of young employees who are now paper millionaires at IPO are the exception, not the norm. There’s a real lack of financial literacy among startup employees as it relates to these contracts and it’s quite possible that after a liquidity event your shares will be underwater. Young companies don’t have the typical cash flows of larger enterprises and therefore can’t afford high base comps so they make up for it with options and other types of performance incentives. Given this dynamic, more mature startups are realizing that cash comp is still king and they have to be competitive in order to attain the best talent so we are seeing a shift here, but it’s still mostly happening for Series B and later organizations.
- Visibility – You’ll have more unfettered access to the C-Suite. I believe this is a pro of joining a startup. In the corporate world, you are among thousands of employees in a highly matrixed organization and getting the ear of the C-suite can be quite daunting. However, in a smaller company you often will interact with all levels of management which is great exposure. At Casper, we had newly hired junior employees interacting with the CEO directly as well as being empowered to make important decisions. This seldom happens in corporate America and I feel is a great boon to your professional development.
- Non-Conventional Titles – While starting to align more with larger enterprises, your title might be very different than the one you had previously. For example, “Head of” titles which are quite popular in startup culture, are now slowly moving into the mainstream. In some organizations “Head of” is an equivalent of a “Director” title in a corporation while in others it’s at parity with a VP. If title consistency is important to you, then it doesn’t hurt to ask HR how the org structure aligns with more mature organizations.
- Career Development – during my time at Jarden, we constantly did modules around career development. We had external consultants as well as internal teams dedicated to this, and completed multi-day training in some cases. Additionally, we had tuition reimbursement and stipends for continuing education. You likely won’t find these types of benefits in a startup. Employee turnover is higher than in the corporate world so making these types of long term investments haven’t been commonplace. I joined Casper in 2017 and by the time I left in 2019 I didn’t recognize half of the employees. This doesn’t just happen among the rank and file; I watched significant turnover on the leadership team as well. Using an analogy from Peter Thiel’s book Zero to One, it takes a team with a different skillset to take the company from “Zero to One” than to take the company from “One to N.” As an example, we had a very performance driven CMO when I joined (since Casper was primarily selling DTC this made sense). However, when we started to develop an omni-channel strategy, not only did lower funnel marketing tactics remain important, but we had to focus heavily on storytelling to hit a mass audience across new points of distribution. This required a CMO with a completely different skillset. I’m not saying turnover is bad, but it’s the reality and those who are looking to spend a lifetime with one company would be a better fit for the corporate world.
- Support – unless you’re a very senior level hire in a fairly mature startup, don’t expect a slew of resource support. Everyone wears many hats and you’re expected to work with sometimes minimal resources. Additionally, you often really have to prove out your thesis in order to garner support to bring on FTE’s. I think a lot of folks who try switching from corporate life to the startup world struggle here. It’s been years since they’ve had to operate in the “weeds” and they’re stuck in a situation in which they can’t delegate.
There is a lot of allure to joining a startup – being involved with something from the ground up, the idea of disrupting a traditional industry, being at the forefront of innovation and working in an environment where there can be less obstacles to success are all appealing. Working closely on a project that you see come to life vs get sidelined in a large behemoth company can bring a lot of satisfaction. I feel it’s a great learning experience that makes you not only more marketable but humble as well.