What are the differences between Enterprise and Startups?

Having moved between these two types of company, I wanted to capture my thoughts on the differences between enterprise and startups. Why would you work for one over the other? Is one option the clear winner?

Firstly, when I talk about enterprise and startups, what do I actually mean? For the context of this post, I’m talking about tech-enabled companies rather than tech-led. These are companies whose main source of revenue is not from the sale of tech per se, but is enhanced by it. Think banks or insurance companies rather than FAANG.

Surely the answer is Startups

Given all the media coverage and hype around startups, the answer is simply to work for one right? Well, there are definitely a lot of reasons people love them and these are some of mine.

Move fast and break things: the classic Silicon Valley mantra and one that definitely holds. I found the pace of decisions and action refreshing. It’s common practice to make a technical decision, say provisioning a 3rd party supplier, and having them signed up on the same day. Contrast this to enterprise and we’re talking months to get through the various budget and procurement hurdles.

Adapting to change: startups change fast and I had to constantly adjust to this. Be it the role, my responsibilities or team organisation. Because the business is smaller, you also implicitly touch more of it and need to learn how to interact with each area. Developers in enterprise can easily bury their head in the tech but in a startup, you need to know how the business operates and who your customers are to add real value.

Skin in the game: a common package at a startup will involve you receiving equity. I like to think of this as having skin in the game, if you frame it as your potential earnings over time. There is a large incentive to see the company succeed. Because of this, I found I was more engaged with how the company performed and would be more vocal about how it was run. The corollary of this is that the expectation burden placed upon you is also a lot higher. I found the intensity and hours worked a lot higher in startup land.

Exceptional people: now this is not to say there are no great, talented people within enterprise. There are of course, but I find they are diluted by a larger pool of less exceptional people. As startups need to squeeze every bit of juice out of their resources, you’ll find you are working with a small,  concentrated group of exceptional people.

There are positives in Enterprise too

Ok, so they’re the main reasons I enjoy working with startups. But what about enterprise? There must be reasons people work there too. Let’s get stuck into mine.

Strong and stable: clearly one of the biggest reasons to work in enterprise is job security. These companies are typically well established, have strong revenue and clear growth. You could enjoy a career spanning multiple decades if you wished. Startups on the hand are like riding a roller-coaster, with high scale periods followed by rounds of redundancies. This is a personal preference and circumstance will dictate which appeals more.

Large resource base: because of the previous point, getting hold of resources is generally very easy within enterprise. This can affect little things such as paying for some tooling or hardware, all the way through to hiring whole new divisions. I have worked in places where travelling 1st class was the norm, whereas startups encourage walking or hacking free alternatives. In enterprise, I rarely needed to consider the price of something.

Structured growth: if you want to have a clear growth plan, enterprise tend to do this very well. They will have clearly defined level and role definitions and scores of resources on how to achieve these. You’ll get good management and HR support and generally be supported in growth. Startups tend to be more scattergun with growth and frameworks (if any), and also suffer from faster staff churn meaning your manager might not be there to support you through the process he began. The upside however, is that progress tends to be faster.

Leverage: enterprise companies often have a lot of leverage within the industry. This can be useful when negotiating contracts for your favourite cloud provider, through to getting timely support when fires are burning. On the sales side, it also means winning customers can be easier simply by virtue of brand recognition or networks of clients throughout the enterprise.

What about myself?

So having said all this, do I have a preference? My journey has taken me from enterprise into startups and I’m currently enjoying this scene. This is based on my personal circumstance, but I’m happy to have a higher risk/reward profile at this point in my life. I left a stable enterprise job in search of learning and growth, and found exactly that. My learning taught me a lot, both about running a business, a tech team and myself. I have also built an incredible network of people which would have taken much longer in enterprise.

When making your decision, I would stress you need to understand what your circumstances and personal goals demand. Hopefully these insights on the differences between enterprise and startups will add some clarity once you know this.