3 Reasons I Recommend Working At Big Tech Companies Vs. Startups

Last week, I made one of my most controversial LinkedIn posts in quite some time.

67 comments (and counting) with spirited debate about a simple question:

Why choose to work at a startup vs an established Big Tech company?

I think it makes no sense and I loved stirring the pot a little to see how others felt.

Here’s the post that I put up:

Since this question generated so much back-and-forth, I want to elaborate

First off, am I saying that it never makes sense for ANYONE to work at a startup?

No, I’m not. Depending on a particular person’s goals, it could make sense:

  • If your boss at the startup would be someone you admire and want to work with.
  • If the startup is working on a problem that calls your name, that no Big Tech company is addressing.
  • If for some reason you simply feel drawn to the startup work atmosphere.

Truth be told, I don’t see my role as telling anyone what they “should or shouldn’t do.” If you want to work at a startup, be my guest. I sincerely hope you enjoy it!

With that said, there are several reasons why I say that established tech companies are the wisest choice for career acceleration.

#1: Big Tech companies pay more than startups.

This one is as plain and simple as it gets.

Tech firms (not just the FAANG companies, but Microsoft, Salesforce, Adobe, and those kinds of places) have a lot more money to pay people than startups do.

Many of them are publicly traded giants with billions of dollars on hand.

Even if we ignore equity for now (we’ll cover that in a moment) and simply focus on salaries…

I have almost never seen a situation where someone earned more at a startup than they could have gotten in Big Tech.

No, money isn’t the only factor in deciding where to work, but it’s an awfully big one. And if it matters to you, you should know that you generally WON’T be maximizing it at a startup.

#2: Most startup equity given to employees is worthless.

One person –– when commenting on my LinkedIn post above –– said that getting equity in a startup is a positive, since you don’t always get that in more established businesses.

She has a point: there are lots of Fortune 500’s and less-generous companies out there who don’t give out equity at all.

Many startups do offer some form of equity to their employees. I’ve worked at a couple that did. 

Practically speaking, though, startup equity almost never turns into real money for employees.

For one, the startup can fail. Hell of a lot more likely than Amazon going under. Happens every day. In those cases, your equity becomes worthless overnight.

Even if the startup succeeds, the only way YOUR equity puts money in YOUR pocket is if the company has a liquidity event: going public or getting acquired. 

That could take many years. Or it could never happen. The company could just carry on operating at a nice profit for the owners while you get nothing for your shares. 

Not only that, the shares the company offers you may be less valuable than the option price you would have to pay to exercise them.

Conversely, as I replied to this commenter…

“I got shares from my last four employers, Salesforce, Tableau, Facebook, Google, and American Express. And in the case of the tech companies, there were lots of shares and lots of value. Not awaiting a company to IPO, but essentially cold hard cash upon vesting. Same for most of the hundreds of employees I led. The startups I was a part of resulted in zero equity that vested.”

Startup equity is really just equity in theory, or philosophically. It could perhaps one day be valuable. A lot of stars have to align though –– and they usually don’t.

Big Tech equity is real equity. Once your shares vest, you essentially get a check, in the form of tradable shares, from the company’s massive reserves. Simple as that.

#3: You won’t have as much influence at a startup as you might think.

Another person commented on my LinkedIn post by saying that you can make a bigger mark at a startup.

As he put it, you can “be a bigger fish in a smaller pond and get in on the ground floor–in case the startup goes huge.”

This can happen, but it rarely tends to work out that way. 

As I mentioned above, most startups fail before they achieve any real success. Established tech companies have “gone huge” already. They’re at the top right now. The products you work on matter on a major scale, today.

And quite frankly, even successful startups often have similar levels of politics / bureaucracy as Big Tech firms.

This idea that startups are a meritocracy where the best ideas win and driven employees become superstars is, I think, more myth than fact. Unless you’re a founding member or top executive, your impact will probably be smaller than you’d hoped.

More likely, you will sink years into a venture that never grows to any substantial size, while earning a fraction of what a legit tech company would pay.

You’ll also miss out on the chance to build relationships and career capital inside these firms, which employ some of the most connected people in our economy. 

The people I met at Google, Facebook, and Salesforce opened countless doors in my career. I know a ton of people in tech who will tell you the same thing.

Like I said: it’s your call, and whether you work at a startup or a tech giant doesn’t really affect ME.

It could, however, have a real and limiting effect on accelerating YOUR career.