*Updated December 2022
One in three millennials recommends working for startups. If you find that pill hard to swallow...good luck with the rest of the article!
Millennials are continuing to choose the startup environment over corporations. Corporations are working hard to adopt the startup mentality and the startup culture. But what is all the fuss about, and why are people going berserk over the startup scene.
Is it the ability to wear flip-flops without a glance of disgust from your colleagues, or is it the flexibility, fun nature and fast pace? We’re taking a deep dive into startup and corporates to figure out the pros and cons.
The crazy millennials
They are considered the “lazy generation”, but there is a lot more to them than first meets the eye.
Remember, looks can be deceiving. And while some of us are trying to figure out how to iron our shirts, or how on earth to pay our taxes, some Gen Ys are killing it as entrepreneurs.
And so comes the question of why the startup environment is the preferred workplace for millennials.
Millennials seek meaningful jobs
First of all, times have changed and after the financial crash so did people’s priorities. The young workforce put a lot of pressure on themselves to find a job that is "meaningful". It is a top priority to feel they are fulfilling that need and has become an integral part of their identity.
Though do not be fooled. They are not so different from previous generations.
They have the same needs as the rest of the workforce - a job that gives you purpose and makes you feel as though you are making an impact. The difference between Gen Y and others is vocalization.
Millennials are vocal about their needs. The traditional egocentric business models of larger corporations are not catering to those needs. They do not encompass the modern values of younger corporations - those being trust and cooperation.
They want the freedom to choose what to do and have control over their work. And at a startup, they are able to engage in more high-level work earlier on in their career due the startup business model.
What sets startups and corporations apart?
The hit U.S. tv sitcom Silicon Valley has thrust startup culture to the mainstream.
While it paints a picture of both startups and corporates in an unfavorable light, it is still loved by many.
To the delight of many tech giants, philanthropist Bill Gates explains on Gates Notes that the tv show portrays the startup ecosystem pretty accurately.
But also unluckily, Silicon Valley is quite far removed from the other startup ecosystems of the world. No one ecosystem is the same, and each city brings about its own unique flair. But for the fun of it, we’re going to generalize the two as a whole.
Considering the impact Silicon Valley has on our lives, I’m surprised how rarely pop culture gets it right. To understand how it works today, you should watch @SiliconHBO. Personally, I identify most with Richard Hendricks: https://t.co/EsiglR37Bo pic.twitter.com/5agUIEUdF2
— Bill Gates (@BillGates) November 19, 2018
Startup culture vs. Corporate culture
Startup culture
Startup culture is epitimized by a couple factors. One, you have flexible work hours. Whether it is the middle of the night or the late afternoon, work hours have no boundaries for the seasoned startupper. Baggy eyes, an overdose of coffee, and packaged ramen noodles will be all too familiar.
"77 percent of millennials say that flexible work hours are a key to productivity in the workplace" - Forbes
Wear what you want - socks and sandals, flip flops, and dad trainers are welcomed. If this doesn’t sound like your cup of tea, better not join a startup. It is a paradise for the self-expressive hipster. But for the suit-clad entrepreneur, you’ll feel slightly overdressed for the average work day.
And of course, the flat hierarchy is arguably the most attractive trait for millennials. You are treated as an equal rather than a coffee runner and your ideas are not run through several levels of management. Instead, you get that lightbulb above your head and get to work. That gnawing need for a purpose in your professional life becomes much easier in a place like this.
Corporates
Like to dress up in your Sunday best on a daily basis? Dressing up in a suit may tick lots of boxes with a hot date, but is it comfortable? All jokes aside, a study from California State University looked into the effects of formal attire and how it changes thought processes.
It turns out that wearing a suit makes you think more broadly and holistically. So there are some perks, although this research is still in its primary stages.
And the hierarchy? It is less flat and more like a pyramid. And while flat and traditional hierarchies are both considered to have their downsides, it is hard to find your purpose when you are at the bottom of the corporate ladder.
However, in the defense of the larger corporations, once you’ve found the magic formula that makes a company successful, would you want to change? Probably not.
It is not common to adapt after finding the “right business model”. This thinking ripples throughout an organization.
If you want to change something, have fun going through multiple levels of management and endless discussions about changing that ONE tool! That does not mean that corporations do not need to change their business model. Quite the opposite.
Innovation to existing business models is necessary for corporations survival. The main set back is the lack of time and risk factor involved with diverging from an already stagnating model.
Startups and corporations: efficiency
Startup environment
You have to improvise and often, and you are not given set deadlines. One day you could be working on a task, and the next minute you are given a job that needs to be completed in a matter of hours.
You will often have to improvise and create processes from the ground up. And most of the time, it will be your sole responsibility. If something fails, it is your head on the line. But this isn’t entirely negative. You see results, and how your task has an impact on the overall company.
At a startup, timing is everything. And what normally takes years in a corporation can be achieved in a matter of months in a newly founded company. You have to make tough decisions and quickly, and this pressure can be overwhelming for some, and a moment to relish for others.
If you can't cope well under pressure, startup environment could push you far out of your comfort zone. Those who thrive off of getting sh*t done are the perfect fit.
Corporates
In a corporation there is structure. Your schedule is planned, and you have a lot of guidance along the way. The workload is distributed too. What you would have completed by yourself at a startup would probably be split between a team in an enterprise.
And that often means that a nine to five work routine won't be disrupted. But of course, there are still many late nights spent putting in the over hours at a corporate office.
And while your ability to move between different roles is drastically limited in comparison to a young company, you become highly skilled in your area of focus. And because you become highly specialized, people will come to you with problems to solve.
While job satisfaction may be lower than in a startup, the ability to solve complex problems is satisfying. Startups will always be lacking in this department.
Startups and corporations: The office layout
Startups
Walk into a startup and the most common layout will be open plan. You’ll be sharing a desk with a manager, or sometimes you’ll take a break upstairs in a fun room. For the extraverted lot of you, it’s the perfect set up.
You can take breaks, have a little chat, but at the same time, you get your work done. Shared desks are multifunctional, forcing the most introverted worker to connect with their colleagues.
It's collaborative, that is the best way to describe the startup environment, and family-sized teams are very common. Unless you're blitzscaling, or in a more mature startup, the teams are often small.
You get to know one another on a level that is near impossible in a corporation.
You work day and night, sometimes outside of the nine to five routine, and so do your colleagues.
You learn to work with one another, and others outside your own team.
You don’t feel lost, and you are well acquainted with practically everyone in the company.
Corporates
Separated desks and dividers are what you will see here. Many have their own desk and a divider to stop nosey colleagues from watching you internet stalk you colleagues. You will also have a typically larger department.
Don't be surprised if there are 40 plus persons in your team. When you have a big group like that, it's often difficult to navigate teamwork situations. And it can be quite overwhelming for managers too. Imagine becoming responsible for (sometimes) hundreds of people?! For employees, it’s difficult to find your way and see how your role makes an impact.
But one thing is commonly felt across all workplaces, your desk space. Walking into the office in the morning and seeing someone sitting in your seat can make even the most reasonable of people turn territorial.
Startup vs. Corporates: Undertaking responsibility
Startups
Every day is different. You quickly take on a lot of responsibility, you are held accountable for mistakes, and you often set your own objectives. The startup environment is the perfect place to learn, and fast.
You are thrust into a position that at first might make you feel uncomfortable as not everyone is able to handle the pressure, and at times it can be difficult to understand where your responsibility lies.
But the autonomy and ability to make crucial decisions early on is an incredibly motivating factor. And it makes for a dedicated, hardworking and efficient team.
Often you will be faced with digging your fingers into a project outside of your comfort zone, or even outside of your skill set. And it's daunting at first, but you come out the other end with a vast array of knowledge that helps you in future job positions.
The ability to move up the ranks quickly means that you are also learning a lot of transferable skills, no matter the department you are in. These skills can be used across any industry, whether it is content creation, data analysis or sales.
Corporates
If you know what you want, and have a clear idea of where you see yourself in a professional capacity, a corporation is a safe option. You know where your responsibility lies, and if you are a manager you manage, if you are a sales guys, you sell.
There is more structure in terms of what you are expected to take care of. But to make a huge impact in a large company, it will be more challenging and it often takes years to work your way up the corporate ladder.
It can be difficult to see the difference that you are making when you are working alongside so many people. The responsibility you have can often become repetitive.
Startups vs. Corporates: Compensation
Startups
You are underpaid and overvalued. It’s not for everyone. But for the hungry entrepreneur, money is not an issue. It’s the experience of being part of a living, breathing, and fast-growing startup that appeals to many.
Even if you aren’t paid for the job that you’re doing (and you’ll most likely be doing the job of three people), your role grows at a rate that is unseen in your average corporation.
"64 percent of Millennials would rather make $40,000 a year at a job they love than $100,000 a year at a job they think is boring." - INC
The experience of working in a startup is a roller coaster. And it’s incredibly fun to work with a team of hard-working and dedicated people. But not everything good lasts forever.
The unfortunate reality is that 90 percent of startups fail, and that means you could be back on the job hunt from one day to the next.
At a new company, the resources are limited. That doesn't discourage people from working hard. Employees learn to become incredibly resourceful with the small departmental resources.
[Related Article - 50 Examples of Corporations That Failed to Innovate]
Corporates
Your income is above or at the market standard which is what draws people into this environment in the first place. High pay is not always enough though. Hierarchies are rigid and it is difficult to see how you make an impact when working at a multinational corporation (MNC). But compared to a startup, you have fantastic benefits.
Most large corporations offer a pension plan, bonuses, stock purchasing options, and free healthcare. Even so, the stock purchasing options will be limited as companies will often put a cap on them due to the high volume of employees.
Corporate structure, startup environment, and the startup culture
Both startups and corporates have pros and cons, and the popularity is dependent on the type of person you are. But a trend is occurring. Millennials prefer the startup environment and the startup culture to the cold and traditional corporation. But that’s not to say that all corporates are stuck in a time warp.
Many corporates are adopting the startup culture, opening up offices to make for a more open and collaborative work environment. Toyota is one example of a corporation that has adopted the lean startup technique. Along with a number of other changes, they are embracing the input from workers.
But as hard as they work to adapt to a more open and flexible work environment, one thing is certain. Corporates will never truly be able to operate like a startup because the reality is that they simply cannot afford to make the same mistakes as a startup.
