Startups vs Big Tech: What it’s Like Working at Both
Which do you prefer to work at?
I want to share some of the differences between working in a startup vs Big Tech since I think understanding the differences can be useful to someone deciding between the two.
I have to caveat this by saying this is only informed by my own experience. Early in my career, I worked at a couple different startups and then decided to move to a FAANG and spend some time in Big Tech. I am also not a SWE, though I feel much of the differences I will highlight are transferable across functions.
I know many use the terms loosely, but when I refer to Big Tech, I’m referring to some of the most successful public tech companies out there—Google, Meta, Apple, Amazon, Netflix, Airbnb, Uber, etc.
When referring to startups, let’s just say the cutoff is around a Series B-ish—so before a company really scales in the market and operationally.
I’ll start with some of the most common questions and work my way down into some of the nuanced details of the job that differentiate the two. Without further ado, let’s dive in.
Compensation
Startups
The majority of startups can’t compete with Big Tech compensation. Most startups fail (or fail to meet expectations). Many join startups with the promise and dreams of their equity turning into millions of dollars, allowing them to retire to a beach in Fiji. But for 99% of startups, this just isn’t the reality, especially if you aren’t one of the first 10 hires or a high-ranking executive at the startup. Compensation should not be the main reason you join a startup (more on this below).
Big Tech
Compensation in Big Tech is just that—big. Regardless of function, a mid to senior-level employee with 2-8 years experience can expect to be making anywhere between $200k - $500k in total compensation. And if you are more experienced, the compensation can almost be limitless. Most at the Director-level across functions are making $1 million or more a year.
A portion of what you make will usually be in RSUs, but for public companies, RSUs are essentially cash because you can sell once it vests. Your bonus will be more than a lot of the population makes in an entire year. If you are simply optimizing your career based on earnings, Big Tech is the better option 99% of the time.
Compensation Scenario
Let’s look at a hypothetical scenario. Let’s say you make $300k/year in Big Tech. Over 10 years you will earn $3m assuming no raises or stock appreciation.
Now let’s compare that to a hypothetical startup. Let’s say you earn $180k/year and have 1% equity (which is rare, but possible if you are one of the first 10 hires). Assuming no raises, your salary will be $1.8m over 10 years.
Let’s assume the startup raises another round or two of fundraising after you join, diluting your equity shares to 0.5%. At year 10, the company sells for $100m. Your final equity payout will be $500,000. In total, your compensation will be $2.3m over 10 years.
In this scenario, if you are optimizing for compensation, it would have been $700,000 better to take the job in Big Tech instead of the startup. This also doesn’t mention all the extra perks, better 401(k) matching, optimized health benefits, etc. that Big Tech has over startups. Plus, the chances of a $100m exit are pretty far and few between, so you likely won’t ever see the additional $500,000.
Now, if your startup sold for $1B instead, your equity payout would be $5m and your total compensation would be $6.8m, beating out the compensation of your Big Tech offer. However, this scenario is extremely rare. Most startups never reach this milestone, so joining one solely for the possibility of a large payout is risky.
Work/Life Balance
Startups
I can only speak to my own experiences, but the amount of hours I put in was never as bad as what people say. Now, I was never a high-level executive when working at a startup, so I didn’t experience those pressures. But I was one of the first 30 hires at a hardware startup that was pre-revenue and still trying to find product-market fit. I had the occasional late nights. I remember testing hardware close to midnight the night before we were supposed to ship our product to alpha testers. Overall though, I felt like I still had a life outside of work.
Big Tech
Social media and LinkedIn will often talk about how cushy Big Tech jobs are. And while there are people who coast, it isn’t really the experience I had. Coasting is s thing, but you won’t get recognition and promotions. And in today’s layoff environment, you will likely be found out sooner or later.
Compared to working at startups, I probably had a more sustained busy schedule than I did at a startup. I definitely learned more about how to be able to manage attending meetings and actually getting the work done. And maybe that’s why working at a startup didn’t feel as busy—I didn’t have the block of meetings on my calendar like I did in Big Tech.
Job Security
Startups
They should make an acronym in startup land—A.B.A. Always Be Applying. Startups are operated to get to the next funding round. And if the team isn’t hitting metrics, the chances of raising another round are slim. That means at any given time, a startup will have 18ish months of runway left.
My hot take is that employees who aren’t at the executive level take on more risk when it comes to job security than the founding team. Sure, maybe a founding team gave up more in opportunity cost than some lower-level employees, but they can also find a new gig quicker than someone who joins a fledgling startup right out of school. When joining a startup, ask about runway and the ability to raise the next round.
Big Tech
Big Tech has generally been known to be a bit more cushy when it comes to job security. However, that is changing quickly. You might not be as consistently scared for your job as at a startup, but there seem to be layoffs every year now and a greater emphasis on weeding out low performers. The days of joining a Big Tech company and coasting until retirement are over. You now have to prove yourself each performance cycle. There is no relying on the great work you’ve done in the past.
Learning
Startups
In a startup, it's all about breadth. You will wear many hats to get things done. You may be asked to come up with a marketing strategy having never practiced marketing in your life. Get used to using chatGPT and Google to learn on the fly. You will learn the basics of many different functions. But because you are spread thin, you won’t be able to go super deep into a particular skill set. You will have more value in a startup as a generalist than a specialist.
Big Tech
If startups are all about breadth, Big Tech is all about depth. If a startup has a team of eight building the Uber app, Big Tech has eight teams of eight building the rider experience and another eight teams building the driver experience. Teams are more specialized. You will go deep into a problem space and skillset. While you do chime in and contribute to other problem spaces and cross over with other functions, there is usually always someone there to do the job when you are ready to hand it off.
Career Growth
Startups
Career growth is often quicker in a startup. If you are exceptional, you will be handed more and more responsibilities and your titles will grow quickly. With that said, there is often title inflation in startups, so don’t be surprised if your title isn’t as fancy if you make a move to Big Tech from a startup. The downside in startups is that for some functions, there are limits to how senior you can grow. Lots of functions end up reporting to the product or engineering orgs, so unless you are one of those two functions, you may never make it to the VP or C-Suite level.
Big Tech
There is plenty of room for growth in Big Tech. Most functions have people at the VP level. The challenge is that it will often take decades to get to that level if you are starting out as an entry-level employee.
A positive of Big Tech is that there is usually an IC (individual contributor) career path and a manager career path. You can have just as much influence and pay as either without feeling like you have to do something you don’t want to do (e.g. manage people).
Titles in Big Tech often don’t reflect the reality of your seniority. Many Big Tech companies hide the level you actually are, so you have the same job title (e.g. software engineer) until you get to a director level (for ICs). This could make it more difficult to signal on places like LinkedIn all the experience and exceptional work you do. With that said, the brand name of a Big Tech company often helps when you are looking for your next gig.
Impact
Startups
Startups are fighting for their lives. So every decision and project you deliver can feel highly impactful and meaningful to the success of the company. Startups will help you feel important. When people talk about having lots of impact in a startup, they are talking about the impact on the business itself. However, if you think you will have an impact on society and users at scale, startups aren’t your answer.
Big Tech
Big Tech is basically the exact opposite of startups in terms of impact. It can be easy to feel like a cog in the wheel at times. You are easily replaceable and it’s not the end of the world if you ship on Tuesday or Wednesday. However, the work you do can impact millions or billions of people. Oh, you only fine-tuned the relevance algorithm of Google Search? You just make the search experience for 90% of the world’s internet users better.
Work Environment
Startups
Startups are more unorganized. Work doesn’t fit into a box. Much fewer processes exist. Teams are small, which means you have to cover areas that don’t have a dedicated hire. It also means you get really close to your colleagues to build lots of trust and throw the politics out the door. Because there are fewer processes, you just have to figure it out and make things happen.
There are fewer recurring meetings. They instead happen on a more ad hoc and unscheduled basis. You will just turn to the person sitting next to you and ask a question. The next thing you know you are whiteboarding solutions. Because teams are small, prioritizing becomes key. You have to leave good things on the table to focus on the essentials.
Big Tech
Big Tech is organized. There is a hierarchy and structure like any corporation. The more senior you are, the more cross-team alignment you need to do. This means more meetings, more sign-offs from leaders, and more politics. You will work with more functions (privacy, legal, content writers, etc.) than just your normal product people (product managers, engineers, designers).
You will have to create roadmaps on top of roadmaps and will have long planning cycles. If you need more structure to succeed, Big Tech will treat you better than a startup. If you want more flexibility and less hierarchy, Big Tech can be a challenge to get used to.
Talent Density
Startups
Startups can have lots of great talent, especially ones that are well-funded and can compete on compensation. But others are a bit and miss when it comes to talent density. It usually will come back to the founder. Can they hire well? Do they have the experience, vision, or right people around them to lead a company?
Ultimately, it comes down to success. Talented people want to work for talented founders and companies that will succeed in a competitive market.
Big Tech
The talent density in Big Tech is unmatched. These companies have a high bar and hundreds or thousands of applicants per job opening. Most employees are well accomplished before they get to a Big Tech company, even if they are an entry-level hire right out of school. During my time in Big Tech, I can count on one hand the number of people I’ve worked with who I felt weren’t up to par.
Choose Your Winner
There you have it. It’s difficult to say which of these two options is better. It’s more a matter of preference. Both have pros and cons, but ultimately you have to decide what is more appealing to you and what excites you. Did I miss anything? Disagree? Let me know your thoughts.