Big company or small company?

It’s a decision that most people in Silicon Valley have to make at some point in time: do you want to work for a big company or a small company? If you’re in high tech, the options are nearly endless in the Bay Area. You can go for big, established companies like Google and Yahoo! or you can go for the small startups with a lot of potential. Big companies and small companies have very little in common, and they offer a wide range of potential benefits.

With a big company, you’re assured of a steady paycheck. You don’t need to hold your breath every quarter to see if you still have a job or not. There’s the opportunity to work on well-established and popular web applications, developing a site that’s already being used by millions upon millions of users worldwide (certainly looks great on a resume). You’re able to deal with issues of scalability and performance on some of the most important web sites in the world.

What’s more, you’re surrounded by a ton of talented people. You have the opportunity to interact with thought leaders and highly experienced industry people. When you get promoted, there’s always someone at a level higher than you to learn from. You can tap into the collective experience of people who’ve been around the block a few times and lived to tell about it.

On the other hand, big companies bring politics into the fold. Any organization of people, once it gets large enough, eventually becomes political. Politics in large companies can run through everyday life. If you’re not one for politics, this can get old very quickly. However, there is something to be said for learning how to navigate company politics. It can work in your favor. If you’re able to get ahead in a large company, it has additional value as it proves that you’ve mastered the politic environment. Learning how to navigate politics in a large organization is a great skill to have.

Perhaps the biggest perceived downside of big companies is the minimal chance of gaining significant financial returns. Companies that have already gone public aren’t nearly as enticing as those that haven’t. There probably won’t be a big payday in your future, even if you do good work. You can hope for a modest raise each year, perhaps a bonus if you’re lucky, and some modestly-priced stock options that may or may not be worth anything in the future. If you’re really lucky, the company may give restricted stock units (RSUs) to sweeten the pot. But ultimately, you won’t get rich working your way up through the multiple layers of a large organization.

Small companies are often politics-free. The fewer the organizational layers, the lesser the likelihood of politics getting in the way. You get to see a lot more of the business since you’ll know more of the people who work there. Perhaps the CEO is also a developer, or sits right next to you in the office. The vice presidents may be people that were co-workers before and might be your age or younger. There tends to be a more fun attitude surrounding work.

Working at a small company can also be a lot of work. Because resources are limited, you may need to work 12-16 hours a day to get your product out the door. Joining a startup is rarely a 9-5 job, so if you’re not up for some serious work, it’s probably best to stay away.

The people who work at startups are typically very passionate, very intelligent, and very driven to make the company succeed. This makes sense since a significant portion probably started the company from scratch. It can be a great environment to work in because there’s no room for slackers to hide, as they can in big companies. The company cannot afford to keep around someone who is unproductive so your co-workers are likely to be A-grade.

You can usually expect a lower salary at smaller companies than you’d get at bigger ones because, once again, resources are limited. What you get in exchange is a significant amount of equity in the company. Even small companies that aren’t public offer stock deals that can make you a fairly large owner of the company should it ever go public, or bring in a significant amount of cash should the company be bought out. If the company succeeds, then taking a lower salary initially could pay off hugely.

Small companies are also more likely to give you an impressive title right out of the gate, especially if there’s less than 10 people. You could easily end up being a CTO, vice president, or other high-level title even though your experience wouldn’t merit such a title in a big company.

On the downside, since there’s fewer people at the company, the opportunity to learn from established industry people is lessened. You may not get to interact with people that have much more experience than you. Getting thrust into a position like CTO without understanding what that position really means presents a significant opportunity to fail. There are less mentors available in small companies, so there will be more pressure on you individually. There’s not time to learn the job, you need to do the job, and do it now.

There’s definitely good points and bad points to big and small companies. Whether one is better for you than the other often comes down to personal preference and risk aversion more than anything else. You can succeed at a large company and you can succeed at a small company. Your personal goals will dictate which path is right for you.

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