A lot of you must be in your placement season and wondering which company to join. ‘Should I join a well-established MNC or a freshly-minted start-up or something in between?’
A start-up is a young company founded by one or more entrepreneurs to develop a unique product or service and bring it to market. By its nature, the typical start-up tends to be a shoestring operation, with initial funding from the founders or their friends and families.
Most e-commerce and new-age tech companies for example were start-ups not very long ago. And to give you an idea of the number of start-ups incorporated in India and recognised by DPIIT (Department of Promotion of Industry and Internal Trade) since PM Narendra Modi launched Start p India in 2016 – there are approximately 50,000; of which almost 20,000 came up in the last 15 months or so! Mind you, these are reported numbers alone. After 10 years of operation approximately, a start-up matures into a company and somewhere along this journey, if they hit a valuation of 1 billion dollars, they achieve the honour of being called a ‘unicorn’.
The next couple of paragraphs cover the pros and non-pros of working for a start-up and the kind of mindset and skills that would be well-suited to a start-up environment, from personal experiences and stories from friends and family.
Why should one work for a start-up?
· The ‘creation’ opportunity – Since everything is being built ground up, the opportunity to create something from scratch is not easily available in most jobs. because there isn’t a legacy of doing things in a certain way, there is more receptivity to new ideas and innovations.
· The ‘learning on the job’ opportunity – While learning is true in almost every job, especially when we start our careers, the learning on the job curve is significantly steeper when one is working in a start-up. This is more by nature of the environment rather than design since there isn’t so much time to first learn and then execute!
· The ‘financial growth’ opportunity – While in-hand salaries in most cases may not be as high as established companies, most start-ups offer stock options to new employees, which has a tremendous upside (multiplier rather than an additive effect) when the company lists on the stock exchange a few years later!
· The ‘career growth’ opportunity – Given that it is a small team to start with, individuals are accountable for larger portfolios at the beginning of their careers itself. If one continues for a few years with the same organisation, the opportunity to grow multi-fold in a start-up is much higher than in traditional setups.
· The ‘ownership’ opportunity – There are flatter or virtually no hierarchies in most nascent organisations. Almost every role is as important as the other, and in all probability without a backup! But ‘with great power, comes greater responsibility’. Hence, while one is leading a function/portfolio, one needs to think like an owner and not just as an employee to make decisions that may impact the company as a whole.
What could be the pitfalls?
High risks are potentially said to give higher returns. So, what are the associated risks, if any?
· Balancing personal and professional priorities – Most start-up jobs are demanding jobs and including the owners/founders, it requires one to be present 24X7 give or take. Hence, that’s a personal choice on how much is one willing to stretch…
· Stability – A lot of studies have mentioned that 90% of start-ups fail due to various reasons. So, this again has to be a conscious decision for a job seeker – is it worth the risk?!
· Performance pressure – Most start-ups are highly performance-driven, again not by choice but as a necessity. Hence, one can either fly high or crash and burn if it doesn’t work out.
Whether one is made to work in a start-up environment, or if they possess ‘the startup mindset’, is a question that may be running through your mind. Let’s look at the skills in detail in the next issue!