Article: Is starting with a startup the right choice?


Is starting with a startup the right choice?

The decision between joining a startup or a large enterprise at the start of one's career holds significant implications, with the power of discipline, the distinction between design and luck, and the value of experience in large enterprises all playing key roles in shaping the trajectory of success.
Is starting with a startup the right choice?

When it comes to launching your career, the decision between joining a startup or a large enterprise is a crucial one. Before we dive into the debate, let's first define what constitutes a startup. Typically, startups are companies in their early stages, irrespective of their industry, product, or funding source.

However, what sets them apart is the inherent risk of closure they face. This begs the question: Is it wise to start your career with an entity that itself is just starting out? The answer to this question depends on the options available to you, and it may go against the prevailing sentiment in the startup world. So, let's carefully weigh the arguments before drawing a conclusion.

If you have the opportunity to choose between working for a startup or a large enterprise at the beginning of your career, I would recommend opting for the latter, even if it's a medium-sized enterprise. There are several compelling reasons for this choice, and I will focus on the top three. Firstly, working in an enterprise exposes you to the power of discipline, processes, and systems, which are invaluable skills not only for startups but also for your overall career growth. Secondly, startups often blur the lines between success driven by design and success resulting from sheer chance. Lastly, and perhaps most importantly, if you have the potential to start something on your own in the future, why not gain valuable experience and insights by working in a more established environment first?

Let's delve into each argument, supported by evidence, to shed more light on this decision.

Enterprises teach you the power of discipline, processes

Ever wondered why companies like Toyota and 3M are consistently hailed as exemplars of quality and innovation, regardless of the individuals at their helm? The same can be said for countries like Israel, South Korea, Taiwan, and the Nordic region. These entities go beyond mere leadership; it is their unwavering commitment to discipline, entrenched routines, robust processes, and time-tested systems that enable them to weather internal and external challenges. Even century-old giants like GE and IBM have managed to revive themselves by relying on well-established ways of doing things that have stood the test of time.

When you kickstart your career in a large enterprise, you are exposed to the intricate systems and ingrained behaviors that surround you. Initially, it may feel constricting, but these systems have a remarkable ability to elicit the best from individuals in a predictable manner. This is precisely how Hindustan Lever, ITC, Nestle, and other established companies in India have managed to maintain their solidity despite competition from agile upstarts and economic turbulence. The importance of processes, routines, and standard operating procedures cannot be overstated. They foster outcomes that are independent of specific individuals, including their personalities. This same principle applies to renowned institutions like IITs and IIMs, where students and recruiters place their trust in the system rather than being swayed by the presence of a particular dean or director. By embracing such discipline and placing trust in the process and systems early in your career, you build a solid foundation that will prevent intimidation and offer you greater freedom to navigate your professional journey. Failure to do so may leave you with limited choices and compel you to label your lack of discipline as a misguided sense of free-spiritedness.

Startups offer little distinction between design and luck

When presented with the choice between failing with a plan or succeeding without one, many startup founders and teams lean towards the latter. The prevailing belief is that success is the ultimate goal, regardless of the presence or absence of a plan. However, this perspective fails to consider the reliability, repeatability, and scalability of such success. Without a plan, it becomes uncertain whether the success can be attributed to one's own efforts, sheer luck, or the misfortune of competitors. Relying on hope alone is not a sound strategy.

In the fast-paced world of startups, the constant action and hustle often mask personal weaknesses and systemic deficiencies. It is only when the economic tide recedes that the true vulnerabilities of startups are exposed, as astutely pointed out by Warren Buffet's observation, "Only when the tide goes out do you discover who's been swimming naked." During a favorable economic climate, many startups may appear successful without a well-defined strategy. They simply need to be in the right place at the right time. However, when the tide turns, those without a solid plan quickly fall by the wayside. This can be observed in the fate of cloud kitchens, bike and car rentals, or hyper-local brokers, where the fortunes of these ventures are dictated by the unpredictable forces of the economy. In fact, as of March 2023, only 17 out of 80 unicorns in India have achieved profitability. Even in the long run, high valuation does not guarantee profitability.

Experience at large enterprise paves way to your own startup  

In early-2000, Google’s Larry Page and Sergey Brin brought in Sun’s Eric Schmidt to run the company. And under Schmidt’s ‘adult supervision’, Google metamorphized from a garage startup to a reliable enterprise. The co-founders of Flipkart, Sachin and Binny Bansal, cut their teeth at Amazon for a couple of years, before starting the e-commerce pioneer in 2007, but eventually to be ousted from their own company and replaced by Tiger Global’s Kalyan Krishnamurthy. Perhaps, again to get some seasoned person at the wheel. The fate of once-startups, like Infosys, Cognizant, Tech Mahindra, and Indigo, all demonstrate how when seeking change you rely on externally honed, seasoned talent. 

So, if you spend a couple of years in a large enterprise, you discover a few things about yourself. Firstly, you get to know if you are really cut out to be an entrepreneur, or you would rather excel as an executive. Nothing wrong with it. After all 99.99% of people follow that trajectory, and quite successfully. Secondly, you learn your lessons from the system and not at a personal cost. You know how to work in teams, the discipline of delegation, the mechanisms of getting the job done, reviewing progress, and taking tough calls. All this is a valuable lesson when you start. After all, as research from MIT reflects, the actual age of starting successfully is 45 and not 25. It doesn’t hurt to take your time. 

So, when you join a startup early on, you get sucked into the pace and intensity of trial-by-fire. You hit some, you miss a rather lot, but you don’t have time to assimilate your learning and apply, for every situation is new, and you are not allowed time to reflect. You jump from one crisis to another, and you think that you are learning, but hardly. You are surviving, at best. Five years out, all you have learnt is to hustle and didn’t develop any acumen or respect for systems, processes, delegation, frugality, prediction, and external posturing, among others. 

In summary, if you still have a chance, take up a decent job, learn about the systems and processes, and more importantly, about yourself, and then plan to take the plunge. Your odds of success are higher. Hope this helps. 

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Topics: Startups, #Career

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