Advantages and Disadvantages of Startups

Working in a startup is testing a range of employee abilities. And it’s not just about the technical knowledge that is critical to the task. A large component is attributed to the psychological state since the words “startup” and “stress” are almost always synonymous. 

This article will analyze the main advantages and disadvantages of working in a startup – useful for readers who are considering this employment ostartup employees, startup employees, startup employees, startup employees, startup employees, startup employees, startup employees, startup employees, ption. In addition, most of the statements can be safely extrapolated to the startup founder, multiplying their effect three times (compared to an ordinary employee). 

What is a startup 

There are no universal criteria for defining this term, but you can deduce some features that are typical for most startups: 

  • The project is based on an idea, the implementation of which can provide multiple increases in profits by closing the needs of people or other companies; 
  • The company has just been created and has a small number of employees (from several people to several dozen);
  • Funding at the initial stage is provided by its own resources or with the help of FFF; a small amount of investment is possible from venture funds, accelerators, incubators, startup studios, or business angels.

Usually, a small group of enthusiasts work on a project at the start, trying to create a minimum viable product (MVP). It is presented to potential clients or investors who are ready to invest in business development, and if all goes well, the startup begins to grow and turn into a big business. 

For people outside the startup community, working on such a project seems like a tempting prospect. Raise an entire corporation with a team of five enthusiasts, move from a tiny office (or classic American garage) to a multi-story headquarters, become a dollar millionaire, raise a unicorn 

But, as always, there are nuances.

Disadvantages of working in a startup 

Disadvantages of working in a startup 

Working in a startup is not only a prospect in case of success but also a big responsibility, irregular schedule, constant stress, emotional burnout, and other “joys.” 

Uncertainty and risks

Will the project shoot or not? No one will ever give an exact answer to this question. This situation has been demoralizing for a long time. Uncertainty is accompanied by a lack of clear objectives and constantly changing information. 

Most startups fail. Statistics – the lady is categorical, and she says that 3 out of 4 projects are closed in the first year of work. Accordingly, if a product or service turns out to be useless for the market, all efforts and time will be wasted. 

All you have left is experience. This is not bad, but along with it can come a feeling of uselessness – “we tried, but nothing came of it.” If the same situation repeats in a few more startups, it can severely undermine self-confidence. 

Moreover, experience is the experience of strife. Working in a narrow and complex, specialized niche, after the failure of a project, it is far from always possible to find a company with a request for the same specialist. This means that the time for such an experience could be wasted or so.

Lack of financial stability

There will be a lot of money, but then, perhaps, not the fact that there will be.

The good thing about working in a classic business is that an employee, in addition to a fixed salary, has a lot of social benefits. Paid vacations, sick leave, health insurance, corporate bonuses in various locations (from the gym to training courses). 

The salary of the startup employees, in most cases, is given by the founder of the project out of his own pocket. Therefore, at first, one can only dream of any financial or social guarantees. And it’s almost certainly not worth waiting for the payment of overtime hours (and they will be!) Or understanding of the management if you urgently need to sit with a sick relative – after all, during this time, the project will lose your work resource. 

Of course, there are exceptions – when a startup has already attracted sufficient external investment, and it is quite possible to receive a salary above the market. But here, too, everything is rather shaky: sometimes the money received simply has no time to spend.

Irregular schedule: inability to comply with work-life balance

Forget about rest, see family members only asleep, forget about all your hobbies – hello, work in a startup! 

Ask any businessman or aspiring entrepreneur how he rests during the New Year holidays if he allows himself to turn off his phone on weekends and wake up at 10 in the morning. The problem is that founders demand the same return from their employees. But an ordinary employee usually wants to go to work in peace, spend evenings with family, drink beer with friends and have free time for hobbies. 

Yes, startups have more flexibility and less bureaucracy. But at the same time, this is not a sprint race but a long-term marathon. Unless you’re willing to sacrifice self-interest, don’t even consider yourself as a member of the startup team. 

There is no need to remember what a 40-hour workweek is either: you need to prepare for a schedule that is irregular in every sense. Sunday, holidays, late night, or deadly early (especially if the target audience of the project is in other time zones) – working in a non-stop mode is quickly exhausting. 

A startup will squeeze all the juice out of you and do it with enviable regularity. You need to be able to work in such conditions – if you do not tolerate stress, it is better not to think about startups but to find something more classic. Added to this is the constant chaos in the tasks.

Working in chaos

A startup team is a small group of enthusiasts who are constantly trying to clean up a large stream of tasks. Situations when one employee performs the same amount of work as 3-4 people in a classic business is the norm. In addition, this often requires learning something new and doing it really quickly. 

Moreover, this scenario, especially when testing hypotheses, is not a one-time situation. We worked on something for two weeks, and then the founder said: “Hang up, we are pivoting” – this is quite the norm. 

Someone such chaos motivates and spurs, but other teams disintegrate at the initial stages. 

Emotional burnout

Irregular schedule, financial uncertainty, great responsibility, information satiety, and constant “A-ah-ah-ah-ah !!!” – the combination of these factors in the shortest possible time will lead any person to emotional burnout. 

The slightest mistake of one person can send a month (s) of painstaking work of the whole team to the trash. Not every person is ready to take on such a burden and survive such situations safely. 

And if we add to this the scenario of the development of events when the startup did not take off, then at the exit, it is quite possible to get a person with psychological trauma. Of course, not always, but often.

A startup is a mini-sect 

The startup team is united by one idea. Employees firmly believe in its implementation and subsequent overwhelming success. Doesn’t it look like anything? The structure of a startup can be easily shifted into a religious way:

  • Startup = sect;
  • Project founder = pastor;
  • Staff = parishioners.

Hence other conclusions: the founders play the role of preachers who repeat the mantra every day “a bright future awaits us, we will definitely become rich, change this world for the better and come to success.” If you are sending everyone who is a fan of a particular religion on a three-letter journey, consider whether you can work with people whose brains are gripped by one idea. 

Startup Founder Might Be Psycho 

In any joke, there is a grain of a joke, and in this statement, it is quite large. Many of your friends, normal people of their own free will, will not give up quite work and evenings in a family or friendly circle, exchanging stability for eternal heartburn, huge risks, and faith in a future that may not exist?

Hence the portrait of the typical startup founder – an eccentric and emotional person who does not always follow his words and sometimes actions. Founders (especially in critical business moments) are not always kind to their subordinates, often they are not shy in expressions – are you ready to spend your emotional resource on such people? 

And here, such quality as “stress resistance” does not work for long. You will have to withstand emotional pressure on a regular basis. Are you ready for this?

The disadvantages mentioned above are, without a doubt, extremely significant. But people keep starting and going to work in startups. Why? 

Because of the significant benefits.

Benefits of working in a startup

Working in a startup is significantly different from finding a job in a regular company. Yes, here, one person can replace several specialists, work non-stop, experience constant psychological stress, but this is only one side of the coin. If you look at it differently, working in a startup is a lot of advantages.

Low entry threshold 

How do you get a regular job? They go through multi-stage interviews, make up a portfolio, fill out a resume, connect useful contacts, and sometimes give bribes. 

It is much easier to become part of the team of a typical startup. When looking for an employee, the founder often relies on the personal qualities of the applicant, the presence of some kind of “chemistry.” If your eyes are burning and a spark has slipped through, it doesn’t matter that you lack technical skills. You will pump in the process, and not only them. 

Ability to upgrade soft skills and gain experience

The typical team member is a “universal soldier” who performs versatile tasks. Negotiating, creating advertising layouts, analyzing target audience, finding investors, etc. Working in a startup, you have to make decisions with lightning speed and change strategies just in order to survive. And this is a great opportunity to improve not only your professional skills but personal qualities (those very soft skills). 

After such an experience, nothing is scary, and with such a background, you can easily get a job in any classic business. 

Freedom and minimal control from above

Working in a startup is autonomous swimming: “A fighting cat is a combat unit in itself” (c) The Strugatskys. The main thing is to show the result. How it is achieved is irrelevant. Usually, employees are given complete freedom of action. But do not forget that it implies movement forward and a tendency towards development. 

Nevertheless, the absence of a constantly annoying boss over your head with control of your every breath is a very big advantage. In addition, when achieving the set goals, the level of self-motivation and self-confidence grows simply cosmically. A startup is a very cool opportunity to test yourself and believe in yourself.

The main bonus is the opportunity to get your share

Becoming a part of the team on the rise of the project, employees, as a rule, receive a certain shareholding or the prospect of receiving it as a bonus. Accordingly, at the time of the “startup shot,” securities rise in price and become earnings that office plankton can only dream of. 

Here again, it is worth drawing an analogy with a marathon run. The founders and the first employees who entered the project at the start can become dollar millionaires – those people who for a long time made their way through the bad-smelling masses. In a startup, you won’t be able to work for a couple of months and then hit the jackpot – for this, and there are concepts such as vesting and options.

Option – a guaranteed remuneration to an employee for achieving certain results in the future. Vesting is a system of deferred remuneration when a participant receives his percentage of shares after a certain period of work in the project. If an employee leaves before the end of the vesting, then he does not get anything. Classic vesting is issued for a period of 4 years. 

Pros and cons of working in medium and large startups 

All the information before concerned “green” projects that are just starting their way on the market and probing the target audience, trying to create a minimum viable product. It is quite another matter when a startup has its first investors, and the project begins to gain momentum. Here, much more prospects open up for the job seeker and employees. Pros of working in a medium to large-scale startup:

  • Less risk – Business has already learned to swim and understands how to survive. Accordingly, employees also have no guarantees. 
  • Higher-income level –  Midstage is the stage at which startups start earning more. This means that employees can count on more comfortable working conditions and a higher appreciation of their work. 
  • The company’s shares at these stages are already worth something – And your own stake in the company is already a significant chance of getting money. 
  • Employees continue to gain invaluable multitasking experience
  • The atmosphere of startups is preserved. In most cases, this is a friendly team, a partially relaxed atmosphere, and the absence of total control from the management.

At the same time, even large projects have points that potential employees may not like:

  • The risks do not disappear, although they decrease. A larger company can take over the project, as happened with Instagram (Facebook bought it). In this case, personnel changes are possible. One employee can be assigned the tasks of another, or there is a chance to get into the part of the state that will be fired to bring a new team.
  • The work of large companies involves structuring – Here, you cannot get by with “universal soldiers.” We need responsible managers and organizers of work processes, working “ants” and other employees who perform specific tasks. Many startup employees, having worked for several years in their usual mode, turn out to be unprepared for even the slightest control over themselves. 
  • Constant race – Having got to work on a large project that has been working effectively for several years, you will have to quickly improve your skills and run ahead of the locomotive. In large teams, employees often have to compete with each other. And this race without a finish can be very exhausting.

So should I go to work in a startup or not?

In general, we can say that the ratio of pros and cons is about the same: a large number of “shortcomings” are covered by real opportunities in case of luck. 

But practice shows that not everyone is ready to work in this format. For some, these are unacceptable conditions and gigantic stress that cannot be compensated for with any money. And someone, on the contrary, is ready for great responsibility, irregular schedule, and an autonomous mode of action. 

Therefore, if you are ambitious, ready for risks, able to make quick decisions, and want freedom, then you have a direct road to a startup. If you prefer Groundhog Day at work, then it is better to bypass such projects. 

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