who loves IT people more
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“Only seniors will go into startups for a lot of money and a lot of fame”
If we speak honestly about the choice between startups and corporations, applicants have many questions and hopes. Today, it is customary to expect at least a challenge and money from the former, and a well-fed today and a bright tomorrow from the latter. In a word, stability.
“You can make a really cool career in a startup if you get into a successful startup at a growth point. You will never make such a career in a corporation. But it all depends on how much a person believes in themselves and is ambitious,” says Katerina Popova, Head of HR Gett.
According to Director of MTS Technology Strategy Nikita Zhuchkov, There is always a battle for personnel between startups and corporations.
“A startup can be compared to playing the stock market or the lottery. Such companies are rarely sustainable in the long term – they often open and close. However, a startup can become a real career rocket. For example, you can come to the position of CTO, and then your company will be bought by a large corporation or you will successfully enter the stock exchange. This is not only an impressive line on your resume, but also a chance to quickly take the position of vice president in a corporation or another top management position,” the expert notes.
At the same time, he emphasizes that the choice between a startup and a corporation is always a balance of risks and opportunities.
“There is certainly more peace and stability in a corporation. There are usually larger projects there. Often, startups simply do not have many positions, because the startup does not need the specialists working in corporations yet or has not yet grown to them. However, startups have another advantage, which is perhaps less often talked about in Russia – options or a share in the company. The calculation here is that if the startup takes off, you will be able to convert your share into significant compensation. This can outweigh the fact that startups usually initially pay less than corporations,” the specialist emphasizes.
But not everyone can get into startups and cash in on their success.
“Startups very often attract highly qualified specialists. The reason is simple: when you have a small team, you need strong professionals who are able to create a really cool product. That's why I don't agree with the opinion that startups are a place for beginners. Think for yourself: what are the chances of a team of inexperienced specialists developing something really cool,” says Katerina Popova.
Experts say that startups can no longer compete for personnel on the market by offering some unique working conditions.
“If we talk about the situation in Russia, then at the macro level, there is practically no competition between startups and large companies. The volume of hiring in corporations and large enterprises exceeds the capabilities of startups by an order of magnitude. Moreover, the boundaries that previously allowed them to stand out have been erased: innovations, complete remote work, etc. The COVID-19 pandemic has completely blurred these differences. Today, the only chance for startups to attract highly qualified specialists is the asymmetry of information. Candidates often do not have a full understanding of their capabilities in the labor market, and startups can use this to their advantage,” notes Anton Mishin, CEO of Proscom.
“Big business will pay more. It is more stable, it is more reliable”
If choosing between a startup and a large business, experts recommend giving preference to stability and high salaries in large companies.
“As for the question of where it is more profitable to go to work, from a financial perspective, big business definitely has an advantage. It is, as a rule, more stable and reliable. Yes, colleagues mentioned cases of large-scale layoffs, but in general such organizations are more stable. In my experience, large companies, especially within the same ecosystem or group, can afford to poach valuable employees by offering them twice the salary. And this happens even despite formal prohibitions of internal corporate policy,” says Maria Ivchenko, HRD at TruePositive Lab.
True, some participants in the discussion disagree and believe that startups are not only a useful step for development, but also quite lucrative. They say that in terms of salaries, some startups can give cool corporations a run for their money.
“It may seem that startups have smaller budgets, but this is not always the case. Many of them attract funding at the initial stage, which they actively use. In my experience, the statement that startups pay less is not entirely true. Those that I know of often have funds for a year and a half in advance. This is enough to test a business model, gain experience and, possibly, release a product. Moreover, the experience of working in a startup, even if the project is not successful, can become a valuable asset when subsequently employed in other startups or corporations. This is a completely different level of responsibility, which is highly valued in the labor market. Therefore, I categorically disagree with the opinion that startups cannot afford to hire highly qualified specialists. They have money, these funds are just limited to a certain period,” ― believes Katerina Popova, Head of HR Gett.
“You can come to work for a bagel at a startup and leave with a million”
Unlike corporations, where all assets have long been divided between shareholders and owners, startups have a chance to make easy money. Experts say that you can come to work for a pittance, and when selling a successful business, get millions of dollars. And there are many examples of this.
“Let’s not limit ourselves to the idea of selling a startup for millions of dollars. We are talking about a product that can take off and generate profit on its own. There are various agreements, for example, in the form of options that can be bought out. Selling a startup is not the only path to success. It can very well develop on the initial investments of founders or early investors. The story with IPOs and similar things is more about the Western market, although we have this too. A much more interesting scenario is when you come to a company, start developing a product, it successfully enters the market, and yesterday you were a startup, and today you are already a corporation. Such situations also happen, and this is a normal path of development that is worth paying attention to. Of course, there are risks, but here it is important to rely on your own judgment and carefully evaluate where you are going to work,” says Nikita Zhuravlev, Director of Development, Planetra.
It is noteworthy that there are specialists on the market who do not even consider working in large companies, relying on startups and the opportunity to earn much more than over years of work in the corporate segment. This is evidenced by Pavel Sizov, Head of Recruitment at ZeBrains.
“The statement that many people are ready to tolerate inconveniences in large companies is balanced by the fact that there are no fewer people who do not want this. Most people face many problems at the stage of employment in a corporation. There are many candidates who categorically do not consider large companies. The reasons are different: a complex hiring process, internal features of the work, which they have heard about from friends and acquaintances. These people are an excellent target audience for startups. It is well known that there is a whole category of candidates who, in principle, do not consider working in large companies. I will not name specific names, but I think everyone understands who I am talking about,” he says.
“Russian corporations support the startup spirit”
Speaking about the Russian IT market, experts point out that not all corporations are the classic version of large companies, in which each employee has a limited role and opportunities. Allegedly, many corporations still retain the spirit of a startup and thus remain attractive in the labor market for developers who are looking for technological projects with the possibility of rapid growth and stable earnings.
“Today, Sber is already an entire ecosystem. You can separate Sber’s fintech products and services, that is, the banking part, where security requirements are much higher due to the scale of the system. Of course, it is more difficult with innovations and the spirit of a startup, but there are many other companies within the ecosystem. For example, our HR platform Pulse, on which more than 500 people work. It is not related to fintech, so the security requirements are lower. We have a simpler development process, less bureaucracy. Developers spend more time directly writing code, it is easier to make changes. There are projects where only one or two teams work on an entire product. For example, SberSport. The specialists functioned as an autonomous unit, practically without integrating with the rest of the Sber ecosystem, essentially working as a startup. There are also teams engaged in scientific non-product activities. There, developers are more focused on implementing specific tasks, there is less bureaucracy. “As a result, in corporations a lot depends on the specific project and the direction in which you work,” he said. Pavel Kulikovsky, Head of Department, Sber.
But at the same time, corporations are not always ready to hire specialists from startups.
“From my experience, corporations are not ready to consider candidates from startups. It is difficult for such specialists to adapt to the bureaucratic system. Moreover, participation in a startup is often perceived as a kind of black mark for a specialist. One of my colleagues talked about the value of experience in 5-10 startups. But let's think about what a resume would look like that lists 5-10 unsuccessful startups? Such a candidate will most likely simply not be hired. Even if a person worked in one startup for a year, this can still be perceived as a bad experience, which will negatively affect employment prospects,” notes Valentina Zimmer, HRD Outlines Tech.
The illusion of choice: startup or corporation?
In this discussion, we tried to solve the eternal dilemma of the IT world, but is it still relevant today? Perhaps the very formulation of the question “Startup or corporation?” is a trap for the mind, distracting us from more important things? What if the real choice lies in a completely different plane? For example, between creating value and chasing status, between development and stagnation, between courage and fear of risk?
These questions may seem uncomfortable, but they are the ones that make us grow. We recommend watching Full discussion recording on YouTubewhere you'll find insights that might make you rethink your career path. Share in the comments whether you agree with the experts or have your own views on choosing a place to work.
