Is There Really That Much Difference Between Startups and Corporates?

Among new graduates and Millennials, the most desired workplace to be in is a startup. Whether it is the perks, the work-life balance, the stock options or the culture, there is a perception that startups are the place to be to make dreams come true. But one wonders whether it is true or not.

My personal argument is that startups are fundamentally no different than corporates in the grand scheme of business. Both the problems and benefits are very similar when looking at the two and the differences are merely polar opposites to each other along the same spectrum.

When speaking at a high level concerning startups, the benefits seems numerous and plentiful. Better work-life balance, better perks, the potential for unlimited wealth and a better culture is the fantasy of every employee and founder. But when one digs deeper, one finds that the supposed benefits of startups are the minority versus the majority:

1. Better Work-Life Balance: The supposed attraction for many individuals is that startups offer a better work-life balance that enables individuals to have greater enjoyment of their personal lives. While that may be the case for the top 10% of startups, the reality is far from the truth. Startups, particularly those in their nascent stages, operate more like small businesses than the glamorous startups of Hollywood fame.
   
   The reality is, especially during a startup’s nascent stages, there is very little room for work-life balance. Not only are startup founders and their initial employees working with limited funds but they are forced to build non-existent processes with little or no personnel. As such, startup founders and employees spend many more hours than a traditional employee working. Indeed, for many startup founders and employees, those infrequent opportunities for time off during the week, are more often than not work related.
   
   Many would state that in Silicon Valley, one can’t get away from work and the overall startup culture. In many respects, it is true. It doesn’t matter if one goes to a friend’s party or if they are out at a coffee shop meeting someone new, usually the first question is what do you do. While many would think that it is a symptom of a vain and overly materialistic culture, the reality is for many, it is a matter of survival and opportunity.
   
   For startup founders, it is an opportunity to potentially close a much needed round of funding or to find a desperately need programmer to get their product out to market. As such, there is no rest for a startup founder as they continually think and breathe their startup issues even in their precious off hours.
    
2. The Potential for Unlimited Wealth: As many a small business owner will tell you, they are constantly struggling with cash flow, regulatory paperwork and other issues that constantly challenge the growth of every small business. Startup founders are no different. Every startup founder can regale you with tales of stressful days fundraising and wonder if you’ll be able to make payroll or relying on luck and unparalleled skill at stretching their last dollar until they sign the one contract that will keep them going for another 6 months.
   
   But the myth that has surrounded startups is one of unparalleled wealth and prosperity. While that cannot be denied, individuals seem to forget about the years in startup hell that can potentially occur before a startup founder and its employees are financially successful. One only has to look at 2019’s string of IPOs from Lyft to AirBnb and the many years that they took to before they have only recently reached their financial peak.
   
   Indeed, everyone instantly forgets about the years of hard work and toil that founders and their employees put to get to this financial milestone and merely focus on the well-deserved financial payday. They also forget that the startups that IPO are in the minority and the majority of startups have more “common” lives such as a continuing business or acquir-hired.
   
   Indeed, most startups have less than glamorous exits and most startup founders and employees move from startup to startup attaining modest financial success. As such, startups for many are another career path with slightly better financial incentive and professional control.

If one looks at what startups offer in comparison to corporates, the reality of the situation is that individuals are fundamentally looking for something different in their professional lives. Individuals are looking for more professional and personal fulfillment in their lives in a business environment that is evolving into something unknown and dramatically different than what has been experienced in the anal of economic history.

Unfortunately, though, startups are merely dressing to the fundamental changes that need to occur in the economic system to drive economic growth in the 21^st century. That topic, though, is for another time.