A couple of days ago, I attended the Techstars Mentor Dinner (contrary to popular belief it wasnt as a waiter or coat check girl). It was both an affirmation and a humbling experience to be included with a group of people that have had so much success and are so willing to share their experiences and knowledge freely.
The next day, Brad wrote a post called The Best Entrepenuers Know How to Fail Fast, where he answers the question about whether he would rather back a startup CEO who’s last company was a failure, or a highly successful / highly pedigreed corporate dude.
Brad chose the startup guy, and explains why (not going to regurgitate his points, go read his post), but he focuses on the need to learn the lessons that failure brings and harness the hunger that failure provides.
It got me thinking, is there a real difference between the type of person that selects the startup life from the corporate life?
Here is my career:
- university fund-raiser
But, is my advice/experiences/knowledge incomplete because I have zero time at a big corporation?
Is there a real difference between the lifer at a corporation and a startup junkie?
Risk / Stability
Ask most anyone, and the major difference tends to center around the concepts of risk and stability. “Big corporations tend to be stable.”
“Startups are high risk / high reward.”
Yet, everyday there are corporations that are downsizing, outsourcing, re-organizing, providing early retirement, etc.
And with startups, the vast majority of people never realize the perceived potential of the stock options that they hold. Usually not because the company fails, but because either the startup doesnt succeed at the level people hoped, or the number of options is really not life changing (when I left ServiceMagic to start Current Wisdom, I had around 2,500 vested shares. They converted to like 500 IAC shares, and when I sold them, I made around $10,000. A good amount, but it didnt change my life. Even if I was fully vested, that number would have been $40,000. An amount I wished I had right now, but, again, not life changing).
Given the high rate of startup failures, the risk and reward are clearly skewed on the risk side.
Control / Structure
In a corporation, it is often believed that individuals have a complete lack of control over their work and/or projects. In truth, its not a lack of control, but history. Corporations have a built in trial and failure mechanism built by the people that came before.
The obvious negative is that corporations are often slow to change, and the methods that worked for so long can become obsolete quickly.
There is certainly a lack of structure that exists in a startup, but as a startup grows, structure has to follow.
Take Lijit for example. We are now around 30 people. Each functional area within the organization has an industry expert. Of the 30 people on staff, each one is highly intelligent and capable (our interview process has become legendary for its ability to weed out those that cannot thrive at Lijit. Most people have gone through multiple interviews that last for hours. Especially on the development side.). Each of us has experienced success in our careers and are eager to bring a similar success to Lijit.
In order for us to be successful, we need structure. Structure often brings focus, and brings to light the areas that either need to be eliminated or shifted.
As a startup, we have realized the importance of structure.
Static / Dynamic
Of course, one of the most glaring differences is that corporations tend to be static in their processes, in the type of people they hire, in the products they produce.
Startups tend to be fluid as their is a constant attempt to figure out the winning combination (is it a freemium model? Do we plaster ads everywhere? Maybe our users want a blog platform?) that leads to a fantastic exit.
Success / Failure
Here is where I think the primary difference lies. Startup “people” enjoy failure and the process of trial/failure. Corporate “people” enjoy the stability of success.
Given in a corporation success is pre-defined (think sales goals, quarterly targets, growth numbers, etc.), success becomes much more black-and-white. Everyone in a corporation knows every day what they need to accomplish in order to be successful and receive their bonuses, raises and/or promotions.
In a startup, no one has any real idea what success really means. There is a plan, and everyone works to hit the numbers in the plan, but with little history, its near impossible to determine what success will be. Success, as counter-intuitive as it might sound, may be a spectacular failure.
So what makes the corporate person different from the startup guy?
Startup people know that failure is a process, not a destination. They embrace the humility of failure, and thrive on the learning that failure brings. They are willing to integrate the dynamicism of the startup life into their own.
Much of this reality has been obfuscated because many of the “entrepreneurs” that have “startups” (in my day, we called them “tinkers” that had “side projects”) have not fully committed to their startups, therefore not making a real commitment to their efforts. The words entrepreneur and startup have lost much of their meaning in a web 2.0 world.
But, if you are thinking of committing fully to a startup (starting or joining one), and are unsure if you are a startup-kinda person, ask yourself this question:
“Am I willing to fail 10 times in a row, just to experience some modicum of a success. Then repeat the process?”
If that doesnt excite and scare you, you may want to rethink your decision.
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