Working in a startup is increasingly seen as a competitive alternative to working in strategy consulting at top firms like McKinsey, BCG and Bain. It’s easy to see why someone would be attracted to the dream of a billion dollar IPO and retiring before 30!
But, how do the two jobs compare? If you’re considering either option right now, this article will help your decision-making and help you know what to expect.
The “pros” to working in a startup
As an employee in a startup, you’re likely to feel a strong, clear sense of mission. There is a product to deliver or industry to change and everyone in the company is driving towards this one tangible outcome. Startups tend to appeal to those who love to have a specific, collective mission in mind and enjoy working towards one thing over a number of years.
Startups can be exciting environments that are full of young and fun people. The “work hard, play hard” mentality is common in new, small companies.
And of course, there is the opportunity to get rich if your startup takes off and you have equity in the business. However, given the success rate of companies like this, this might not always be a good bet to make!
Nevertheless, there is a lot more opportunity to learn “by doing” in a startup versus a strategy consultancy where you typically learn “by analysing”. This means there’s more taking action to move things physically forwards in a startup compared to the work you would do as a consultant. Of course, this truth suits some people more than others.
Finally, startups are often chaotic and understaffed, so if you’re opportunistic you can find responsibilities for yourself, quickly manage a team, and make decisions that impact the business. This can be hugely exciting for a 20-something.
However, for the same reason, there is no such thing as a “career” in a startup, which means you don’t have a clear view of the progression and financial reward you’re likely to get in the future.
This leads to a few other downsides of working in a startup…
The “cons” to working in a startup
As alluded to above, it’s more likely a startup will fail than succeed. From a Venture Capital firm’s perspective, it’s okay for them to invest in fifty companies and only have two or three succeed. However, as an employee of a startup, you’re putting all your eggs in one basket. This means you can find yourself working very hard for two to four years while potentially not have anything to show for it at the end.
This could be fine if you’ve learned a lot over that time. But in reality, the focus of the work in a startup is on executing rather than strategizing. So if you want to learn about strategic decision-making, startups are usually not the right place.
There is also little room for mentorship in startups. You may find yourself being managed by someone young and inexperienced who won’t have the time to teach you much and may not have the managerial skills that they need to run an effective team. This can make for a stressful team environment.
So, the day-to-day environment of a startup can be chaotic with under-qualified managers and an ill-defined scope of responsibility for employees who work towards constantly changing targets. This can lead to feeling like you’re a mate on a not-so-stable ship heading to a different port every week!
Overall, working in a startup can feel like the exciting “sexy” option and you can learn a lot, but as an employee it can be a risk to take given the uncertain financial upside, potentially poor team management, and unclear definition of your role and future career.
How to know which is the right choice for you
Working for a startup might be the right choice for you if you’re very passionate about the mission of the company, you want to learn from executing, and the startup you’re looking to join has seasoned managers you can learn from.
On the other hand, consulting may be a better bet for people who want to learn from some of the best minds in business, work on strategic problems with billion-dollar impact, receive a competitive compensation, and benefit from a steep and predictable career progression.
Taking the long view into account, consulting has survived all the market bubbles and booms over the last 80 years and has always stayed at the top of career choices for the most driven and talented individuals. This cannot be said to be true for startups.
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