Product Marty Cagan

Does Size Matter?

Two questions I get a lot are: “Is now the time to join one of the cool new startups?” and “The startup I’m at isn’t doing so well, should I join one of the big guys that’s hiring so aggressively right now?”

I’ve worked in all sized companies, from brand new startups, to over 100,000 employees, with several sizes in between. At this point, the trade-offs between large and small are very clear to me.

The classic Silicon Valley startup is an amazingly productive and innovative product creation machine. Everyone knows what the business is and why they’re there; decisions are made quickly; every person makes a clear impact; and roles are well defined and well understood. Since money is typically tight, everyone works long and hard hours, but the result is that you can create products and get them to market very quickly. And usually everyone gets equity participation, so that everyone has some skin in the game.

The down side is that it is high-risk, exhausting, difficult to maintain a work-life balance, you have to worry constantly about funding and/or revenue, and there is less room for mistakes as the company’s very existence depends on your product’s success.

At a large company, there’s typically much greater resources, and the company’s revenue is diversified enough that you can afford to take longer to get to market and make some mistakes along the way. And you have the ability to reach and impact millions of users and customers.

However, large companies often come with bureaucracies, politics, matrix organizations, several layers of management, frequent and seemingly random course changes and reorganizations, and all too often, seemingly endless meetings, as so many people are impacted by, and want to be involved in, every decision.

(There is also the perception at a large company of greater job security, but I have never really believed that. I’ve seen countless large companies go through lay-offs, sometimes it’s to lose the dead-wood and correct hiring mistakes, but many times entire teams or organizations are cut as a company decides to focus elsewhere. At least at a startup you are more in control of your own destiny.)

So what’s better? Startup or big company? It’s a personal decision, depending on what you’re looking for in terms of work-life balance, compensation, work experience, and potential impact. But mostly I’ve found that people are either large company or small company types, although I have known some that thrive in both (and many that don’t work out well in either and do much better on their own).

In my experience, if you want to work at a large company, you’ll struggle if you are naturally impatient; get frustrated by typical office politics; if you can’t sit through meetings; and if you prefer to do it all yourself rather than working through and with others.

Likewise, you’ll struggle at a startup if you are unwilling or unable to put in the level of effort required; if you’re uncomfortable with risk and uncertainty; if you need a lot of hand-holding from your manager; and if you prefer to manage others than to get your hands dirty every day.

You can absolutely create great products at both startups and large companies. But the product creation process can be a lot less painful if the work environment is the right one for you.