One of the decisions you will inevitably make, when searching for a new Information Technology position, is whether to choose a smaller or larger sized organization.
It may not seem like such a big deal, compared to other major factors like salary and benefits, but in my experience, your decision will have long term effects that I believe will ultimately influence your short or long term viability at that organization.
Let’s start with salaries, since that is one of the first things you’ll likely assess. Medium to larger sized organizations will tend to entice you with higher base salaries than the small startups.
Larger organizations who have “been around the block” have withstood the uncertainty of time, and will tend to have a bigger financial “war chest” with which to entice potential new employees. Their larger war chest will enable them to offer potentially higher base salaries than the startups or smaller organization who don’t have the same financial luxury.
Base salaries are obviously a powerful incentive for prospective new employees. Base salaries are immediate … there is nothing you have to wait for, no vesting or blackout periods that prevent you from immediately benefiting financially from a base salary … that base salary is yours from day one on your first day on the job.
Startups and smaller organizations will resort to other tactics to help entice prospective employees. Things like stock options or “sweat equity” stake. That will mean a comparatively lower base salary rounded out with equity stake in the form of stock options or outright company stock.
The tradeoff for you as the potential employee, is you won’t immediately benefit from stock options. They will most likely require a vesting period, meaning you won’t be able to immediately sell the stock options you’ve been granted on your first day on the job.
The purpose is twofold. The first reason is to prevent a prospective employee to exercise their stock options, make a profit, and immediately leave the company!
The second reason ties the employee’s potential stock option payout to the success of the company as a whole. If the employee wants a bigger stock package payout, the employee will need to do everything they can to make sure the company is financially successful … which may mean not punching out at 5pm sharp every day. It may require lots of additional effort to achieve the company milestones needed for a lucrative IPO.
Assuming a privately held company is even ABLE to go public. Some companies choose not to go public at all.
Beyond the obvious financial ramifications, it’s important to understand what happens AFTER a company goes public. The founder(s) of a startup, may see going public as their ultimate goal. They are hoping for their equity shares in the company will result in the largest payout possible. They may not want to stick around after going public.
As part of going public, a startup organization may end up getting acquired or swallowed by a larger organization. Many larger corporations often go hunting for company acquisitions that will help with their long term business strategies.
Microsoft bought out the videgame company that created the hit videogame, Minecraft. It made a fortune for the founder, but the employees that were part of the company during the buyout, ultimately had to find work elsewhere.
It’s important to understand this when assessing smaller startup organizations.
Of course, getting acquired or merged with another company doesn’t just happen only to small startups.
The same sort of thing can happen to larger more established companies as well. Microsoft decided to acquire the mobile division of Nokia, in the hopes of boosting their mobile smartphone presence in the marketplace.
Unfortunately the acquisition didn’t go the way Microsoft predicted. Microsoft spent near 8 BILLION dollars on the acquisition, but ultimately had to declare the Nokia buyout a total loss on their books.
Along with this unfortunate turn of events, Microsoft decided to lay off around 7800 employees, mostly Nokia employees who were part of the buyout plan.
The Technical Factors
What kind of developer are you? Do you enjoy being on the bleeding edge of technology? Are you a huge supporter of open source development?
You may want to seriously consider choosing a smaller startup organization over a larger one.
A smaller startup organization’s goal will be to try to establish itself as a viable business. They will not have the technical baggage of larger organizations that have already created a technical stack and engineering product(s).
You will most likely be working on lots of new greenfield development and the luxury of choosing the latest and greatest tech stacks and development frameworks to play with.
Developers who enjoy being out on the cutting edge, will likely find smaller startups more appealing than larger organizations.
Larger organizations won’t usually have the same level of luxury to work on new greenfield projects or tech stacks. They usually have to contend with technical debt and legacy technology.
Many larger organizations acquire other companies to obtain certain key technology stacks or products, in alignment with overall company strategies and goals.
That means that over time, a larger company can accrue legacy technology.
And like it or not, all that legacy technology will require lots of staff to keep it up and running. There isn’t a “magic wand” that a company can use to wish it away. The harsh reality is that you can spend a lion’s share of your time and effort dealing with legacy support.
Not to imply this kind of legacy technology ONLY belongs in larger organizations. It can happen just as quickly in a smaller company, especially if greenfield development isn’t an option.
The Human Factor
What about other factors to take into consideration? In smaller, younger organization, you can take advantage of being “on the ground floor”. In a larger organization, there can be a lot of people between you and the CEO. You will usually need to work your way through lots of layers of management to get approval for any major initiatives you want to kickstart.
In a smaller organization, you probably won’t have to deal with as much red tape. Your actions will have greater weight, due to the simple logistical fact of numbers … less employees = more work expected of each employee.
There may be more room for growth and opportunities to move up through the ranks, for the very same reason.
On the other hand, if you value work/life balance over the generally fast paced work environment of smaller companies, you should think twice about considering a startup environment.
Startup environments, by their very nature, must work fast and furious to establish themselves. The potential for rewards and big bounty stock option payoffs, are offset by the expectation that more will be required of you as an employee.
This may involve the expectation of working overtime. Working on weekends. Going into a long and sustained “work crunch mode”.
This can have serious and real consequences on your personal health and well being. If you value work/life balance and the need to maintain your own personal life outside of the work environment, it would be in your best interests to really research the work expectations of the startup.
Everything I’ve said so far, is based on my subjective personal work experience. The best way to get a more accurate picture of what it’s like working at big or small companies is talking with people you know and trust, who can give you their first hand accounts of their own experiences.
But I feel I’ve worked enough on both side of the fence, to conclude there are real and significant differences between small and large organizations and it’s in your best interests to research those differences and determine whether they align with your own work expectations.