A startup environment is typically a fast-paced culture in which creativity and communication are valued. Startups tend to be smaller than large corporations, especially in the early stages of growth, enabling employees to build strong relationships and freely exchange thoughts and ideas. They’re also capable of acting nimbly to adjust business practices and hit shifting goals.
A corporate environment, on the other hand, is often characterized by a more structured, formal approach to company culture. Because many corporations employ thousands of workers, it’s not uncommon for employees to be unfamiliar with colleagues outside of their immediate teams or departments.
Startup point of view
As they confront numerous challenges in their early life, startups need to work with large groups if they want to increase their chances of survival. The large companies in the CAC40 seem to be the ideal partners to tackle some of the issues that the startups might face: the lack of financing, the lack of accompaniment, the poor market knowledge.
Moreover, most entrepreneurs see partnerships as the cornerstone for the adaptation and the evolution of their business. It is a way to challenge their ideas with a real client that offers a leverage over their ongoing development without a heavy financial compensation. Additionally, having a big firm that shows a strong interest in your solution can prove useful when it comes to reaching out to new clients and investors.
Corporation point of view
Driven by the digital revolution, startups were first seen as fierce competitors that corporations have long found hard to face.
Nowadays, this vision has changed, and some major groups have managed to turn this challenge into an asset. Risk has been transformed into opportunity, and innovation has been set as a goal for each company: It is now firmly integrated into corporate strategies as a major goal for the large firms.
Former French Tech director, David Monteau, has confirmed this tendency stating that “[…] for about 4 to 5 years, big French groups have communicated and invested a lot into startups.” Many corporations are now chasing after startups, hoping to accelerate or even save their activities.
Indeed, S&P 500 companies’ lifespan has decreased from 67 years a century ago to 15 years today. According to a study conducted by the John M. Olin School of Business at the University of Washington, 40% of the Fortune 500 companies will no longer exist in a decade as they desperately need new ideas and solutions to remain competitive.
These numbers show the importance of partnering with a startup. It is a strategic choice for corporations as it is a way to change their internal processes and disrupt their market to avoid the decline of their activities.
Huge risks with huge returns: According to Forbes and other sources like Wamda, 90% of all tech startups fail. Whether it’s the lack of funding, being pushed out by competitions, poor management, or not adapting to users in time and evolve to something better. There are many reasons that can lead to the failures of startups because of their immaturity as a whole. However, what comes with this high risk is a high return after success. Every startup company today dreams of being the next Uber or the next Snapchat because of their fast and rapid success.
Small team: The reason why you feel impactful in a startup is often because you’re part of a very small team. The average startup team can very well be within 10 people. So when you’re part of that team, you are going to be tasked with tasks that are very core to the survival of the entire team. It’s great to be impactful in a startup, but that also means that it can go both ways. For example, Breezi, a website building tool, once hired a customer service manager that couldn’t keep up with the pace. Though the bullet was dodged at the end, it was still a close call for the team as a whole.
More than just a job: People often hear about the differences between working in a startup and working in a big company. So what is it like working in a startup? Easily put everyday is a battle. Startups are often working on tight schedules whether it’s to meet product deadlines or meeting a different investor. Working in a startup also means that you’re most likely going to have an active role in the growth of the company. People who join to work in a startup often believe that they are part of something bigger and it’s a valuable experience to watch a company they’re part of grow and mature.
Always pivoting: One thing you hear all the time about startups is that they are always pivoting, and that’s true. Pivoting correctly is crucial to the survival and growth of a startup. Instagram isn’t always the photo sharing application you see today. It started off as a check in application that allows you to show people where you are. Through a series of pivots and edits Instagram became what it is today. This is why it’s important to know that the final products of startups isn’t always what they set off to create at the very start. There will be new challenges and opportunities that will either evolve or destroy the startups.
Low cash flow: Another important but saddening fact about startups is their low cash flow. One thing you hear most about startups is that they are always fundraising. If you imagine a startup as a plane preparing to take off and its funds as the runway. The longer the runway is the more likely it is for a startup to take off successfully. That is why you often hear startups actively going through series of fundraising. Startups won’t take off without the funds necessary. It’s great to have a dream of solving problems, but there are also harsh realities that one must face when doing so.
Offering innovation: Startups normally set of their journey as an entity that is trying to solve problems through innovation. Coursera and Udemy allows people to learn anytime and anywhere via their platforms. Venmo allows people to pay each other conveniently via their phones. Discord allows people to talk to each other as a team when gaming. Point is, startups always have their eyes set on a problem and they firmly believe that their products are the keys to solving these problems.
Regular Jobs: Working in a big corporation means you’re the one out of thousand people they hired this year. You feel more invisible in a big corporation, meaning you hold less responsibility but less accountability as well. You will receive standard pay and have high security in hold your job, but in exchange for that is probably a less interesting life style.
Huge Team: According to CNN money, the total number of employees among all Fortune 500 companies is 26,405,144 people. This makes the average number of employees per firm 52,810 people. Big corporations offer more job security to people because of how big they are. Big corporations aren not as likely to fail and go bankrupt compared to small startups because of their solid foundations, well established relationships with the government and people, and board of executives that makes decisions together.
Emphasis on profits over risks: Once a company increases in size, it starts becoming more risk adverse. Corporations know that for every success they get, there is more failures coming their way. When a corporation get larger in size, there are more things to consider such as the well being of its workers, its public images, and its constant growth. With so many people’s well being as risk, corporations can no longer take big leaps of faith. Instead, they have to focus on what they’ve been doing and continuing that success.
Huge Pools of Funds: The biggest difference between startups and corporations is probably their amount of funds. Startups are always tight in cash flow and always looking for more. Corporations are always looking for profit, but a week without sales will not have as much of an impact to the company’s well being compared to a startup. Corporations also have more funds to spend on things like advertisements, talent hiring, and opening up additional locations. Startups probably have to pick between hiring a sufficient engineer and running online ads for 2 months. That is the main different. Startups have to be careful in every step they take while big corporations and more rebound for mistakes.
Doing similar things: Like previously stated, big corporations tend to be more risk adverse. They won’t make huge pivots and conduct large scale company restructuring like what some startups may do. They focus on doing what they do best and substantially increasing profit. Companies like Walmart are still innovating, but what keeps it alive is the everyday process of selling household goods to customers.