Should an Aspiring Entrepreneur Work for a Big Company After College, or Join a Start-up?

If you’re a recent college graduate who’s entrepreneurially inclined there seem to be two paths:

1. Go work for a big company

2. Go work for a start-up or start a company yourself

The past few weeks I’ve heard both sides of the argument.

If you go work for a big company (Apple, HP, Yahoo, P&G, whoever) you will “learn how to do things right” say some. I actually think you’ll “learn how things get done” at that kind of organization, whether good or bad. The biggest benefit I see, though, has more to do with the number of people you’ll interact with. Go work for a start-up with a few people or start a company yourself and you’re exposed to just a handful of minds on an everyday basis. At a big company you’ll see a range of management styles, methods for running meetings, sales techniques, time management strategies, etc. The main downside for an entrepreneur to working in a big corporation is the bureaucracy may deplete your entrepreneurial instinct. It’s no fun being a cog, but unfortunately, most first jobs in big companies are cog positions.

If you work for a start-up or start a company yourself, you will assume a range of responsibilities and experiences that simply cannot be matched if you’re one of 10,000 employees. You will be involved in every facet of the business, from accounting to marketing to HR. The risk here is that you will fail. Since you’ve never done it before, you probably will fail. The question is how do the lessons from failure in this case compare to the lessons you acquire humming along in a big company.

In the end, it depends on the person, his/her goals, and the opportunity, but I’m more upbeat about the potential good that can come from working in a large corporation for a short period of time than most of my entrepreneur friends.

13 Responses to Should an Aspiring Entrepreneur Work for a Big Company After College, or Join a Start-up?

  1. Sacca says:

    I believe you should work at as a big a company as you can where you will have the opportunity to work on every aspect of the business.

    Meaning, if Terry Semel were willing to hire a young guy to carry his bag and you got to see, learn from, and touch everything that happened within Yahoo, that would be an ideal job.

    Similarly, I would not take a job at a startup if the job itself were going to be too narrow.

    The best employment I ever had from the perspective of skills gained and personal fulfillment was at a startup where my job, by design, allowed me full access to the entire company. From legal stuff, to selling, to operations, I learned it all. Not only did I have a blast, but I came out a jack of all trades even after just a couple of years.

    Wish I had more time to answer, but the weekend isn’t over yet. :)

  2. Jp says:

    I think I lucked out. When I graduated I had every intent of starting a company within a few years, but I knew I needed to gain experience. I joined a 4-yr old management consulting firm with Fortune 500 clients. The atmosphere with 30 consultants was great as we prided ourselves on our culture and work ethic. We also got to see and experience large, corporate bureaucracy. Every consultant had a hand in developing our firm further through internal initiatives, such as employee handbook development, training, and communications. When I felt I was ready to start my company, I left, which was last year. It was a great 4 year experience.

  3. Dave Barnes says:

    Ben,

    It does not matter.
    You will only keep your first job for a few years.

    Small companies (I worked for a 10-person company on my second job) offer tremendous opportunites for responsibility. Way beyond your years. At age 24, I was repsonsible for 30% of my company’s revenue.

    Big companies (I worked for 40000-person company on my third job) offer formal training. In 11 years, I had so much training (I was an engineer and a sales rep) that a small company could/would not have afforded.

    Both were great experiences.

    The most important “take-away” (in my opinon) from a big company is “training for you”. Suck them dry.

    ,dave

  4. Chris Yeh says:

    In the end, go for the opportunity that puts you in contact with the best people. The difference between heaven and hell is the company you keep.

  5. TK says:

    To comment on Chris’s comment, actually I thought the difference between heaven and hell is the air conditioning settings. :)

    To the point of your blog entry, I spent time at large companies, midsize and emerging companies, and startups. I will tell you that I learned things at every stop. With that said, here are a few observations:

    1. I hated almost every professional moment I had at a large company and the only redeeming thing was that at most of them I had so much free time that I always had things going on on the side. I often got paid to do about 20% work.

    2. Start ups you can learn many things, but I have also been at startups that were so disfunctional that it brings you down. I have always had senior positions at the startups I have been at and that can be frustrating.

    3. I built and sold my first company before I was 18 and I learned a lot from that. I learned a lot of tactical things (e.g. payroll taxes, dealing with lawyers, and how to fire employees). But most of the strategic things I learned came from my times at emerging companies. These were companies that were 18 months from a large acquisition or an IPO. Once again I had senior positions at these so I got to see and do a great deal.

    4. With all of that I have learned, nothing has brought greater joy (or money) than the times when I started my own thing. It was no so much what I learned, but the lifestyle and feeling of direction control are much more condusive to my ego! :)

  6. Tim Taylor says:

    What if you don’t know what you want to do? (Like 90% of college grads feel but only about 5% honestly admit.)

    As for the question, it’s easier and more “sellable” to go to work for a big company (they come on campus and interview, parents can proudly parrot your position to friends (competitively or not), etc.)

    Interestingly, it’s my point of view that it’s way easier to get into start-ups. The one thing that very few college students seem to realize is how easy it is to get an internship with a start-up.

    If you can afford it, work for free (or very little) there are TONS of start-ups looking for the help. If you’re good, they almost certainly will hire you if they’re successful.

    If they stink at least you get a shot and you get into the network. Even failed start-ups have people in them with excellent networks.

    The drag about big companies is you have to pre-select what you’re interested in before you even know if it interests you.

  7. What would Steve Jobs do?

    Steve Jobs: Commencement Address at Stanford University
    link to americanrhetoric.com

  8. steverod says:

    Another vote for the small company. I joined a small company out of school (engineering staff of 40) — big enough to have some resources, grown enough to not be completely dysfunctional and to have attracted quite a few smart people, but small enough so that the pace of development hadn’t slowed down and so that you could meet all the really smart engineers (which was pretty much everybody).

    I’m still there even though it’s 4000+ people and I’m still learning tons even as the opportunities change.

  9. Andy says:

    This is a good conversation with great comments. I am in my mid-twenties, and walk both sides of the line on this one. My wife works for a very large fortune 100 company and loves every bit of it. The training, exposure (she is in internal consulting), the people, and the resources are amazing. On the other hand, I work for a growing community bank (some would consider somewhat a de novo bank)and may not get the resources she has, but have input into a lot of the decisions and strategy of the bank. In addition, I get to be hands on with the customers and really see the results of my decisions and work.

    I think in the end it is an individual decision based on what challenges make you thrive and prosper. Do you like structure or a bunch of moving parts? What skills do you need to learn to achieve your dreams? Where do you see yourself in 10, 15, 20 years? I think these are some of the questions that will point you in the direction you need to be in today’s workplace.

  10. Dossy says:

    I say work for a big company first, if your appetite for risk is small. In a larger organization, you can be less risk averse because you’re playing with OPM (other people’s money).

    If you have a large appetite for risk and you’re resilient and failure doesn’t scare you, then either choice is equally good.

    But, the advantage of working at a big corporate is not “learning to do things right” because mistakes are made everywhere. What you do learn is how to sell into an organization once you’ve worked there. The decision-making process is largely irrational and convoluted, and knowing it will help you sell into it better.

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