Kids, don’t believe the startup hype: Why you should join a big company first

“Should I join Microsoft or a startup?”

As the co-founder of a profitable startup and a former Microsoftie, I hear this question a lot, especially from college students ready to start their careers.

In tech cities like Seattle and San Francisco, we’re quick to jump on the pro-startup bandwagon. Robert Scoble advises: “Join a startup. You will learn more there and have a bigger impact. Later, when you have a family and a mortgage, you can take the safe route.”

But this advice ignores the advantages—like knowledge, confidence, and money—to working for a Microsoft, Google, or Amazon first. Here’s why you should consider the big company over the startup:

You learn how (and how not) to run your own business—on someone else’s dime.

At Microsoft and my next employer, I ran my own teams. I managed people and large budgets and worked closely with sales, marketing, consulting, and support for my products.

I considered my managers my VCs and:

  • Used their “funding” to work on the cool stuff I wanted to learn.
  • Learned how to manage people (and fail at managing people) without having to pay them myself.
  • Traveled and attended conferences to learn about other industries and companies.
  • Made connections I would have never made going cold into the startup space.
  • Shipped big, ambitious software that’s used by millions.
  • Learned how to interview and hire employees, bring on contractors for short term projects, and work with international teams to build and support software.
  • Met amazing mentors with big company and startup experience who continue to provide me with great advice today. I even met my co-founder.

You save money to buy your own equity.

When I went the startup route, I didn’t want to be employee #X with a small share of the company. I wanted to do it right and be in control, which requires funding.

Josh Ledgard

First, I needed to raise enough money to “seed round” my own venture without risking the future of my family. While still employed, I maxed out 401K matching, invested in employee stock purchase programs, and saved my annual bonus checks. And then my wife and I paid off our house so we wouldn’t have a lingering mortgage or other debt.

Working at big companies gave my co-founder and me the financial freedom to own 100 percent of the equity in our company and decide how and when to grow our business.

You can earn a paycheck while starting your own business.

Working for another company doesn’t mean putting your dream on hold. Many companies have moonlighting clauses that allow you to explore side businesses, as long as it’s not competitive and you’re still doing your day job. And I also know people who’ve gotten their initial development funded by Microsoft before spinning out on their own.

You can live your life—now and later.

If you want to eat Ramen noodles while slaving away at a startup and hoping for a big payday, go for it. But if you plan and do it right, you don’t have to put your life on hold to work at a startup.

In my 20s, I wanted more flexibility. I joined Microsoft, worked hard, took vacations, and bought things I didn’t need. I also got married and made many lifelong friends. In my early 30s, I was ready to start a family, and corporate employment gave me the nest egg to do it. Now, in my mid-30s, I’m a proud member of the Founder Dads club and get to see my startup succeed, while spending time with my wife and two kids.

My co-founder and I built our company the boring, methodical, and analytical way using the values each of us learned at larger, more established companies. We’re more mature, and we’ve avoided many classic startup mistakes.

Some people may be naturally gifted at raising money and have an innate understanding of everything that goes into running a business. For everyone else, there’s continuing education available at any number of large companies. Don’t short change it.

Josh Ledgard is the co-founder of KickoffLabs, subscription software for landing pages, online forms, and email marketing, and the author of My Toddler Perfects Your Sales Pitch and Landing Pages 107.  Follow Josh on Twitter @joshaledgard.

  • Guest

    I could so bust your chops on why you are wrong but I love you guys too much so I let you go!

  • K3

    Josh, you make some great points. Having done a few gigs at big companies and at small startups, I have to say the walls start closing in pretty fast when funding starts to run low. At a big company there’s so much more opportunity on the table if you find a entrepreneurial team and have the guts to push the limits.

    Of course, pushing the limits at a big corp often leads to seeking new challenges – and you’re much better prepared for having the diversity of experience that comes from pushing creative visions at a multi-billion dollar company.

    • http://www.kickofflabs.com/ Josh Ledgard

      Thanks!

      Yup – the “walls closing in” happens a lot more at smaller startups than the media covers.

  • BeenThere

    Most Microsoft disciplines below GM are too narrow to have any practical value outside of Microsoft. Possible exception for devs, but not much as so few people are actually developing using Microsoft technology. I can’t tell you how many times I’ve heard “we don’t even consider Microsoft people”.

    While I definitely buy the argument about funding at a start up drying up, I would warn anyone to think twice about entrepreneurial teams at big companies — they’re mostly a myth and when they do make an appearance they’re usually swallowed up before they can make real progress. Sure, exceptions exist, but you’d be better off playing the lottery.

    • http://www.kickofflabs.com/ Josh Ledgard

      To clarify. I didn’t work for an entrepreneurial team. I worked on Visual Studio in Developer Division. But:

      1. I pitched and got to manage successful projects tangentially related to my job that got me a much broader experience. I think the issue is that most people don’t try act like an entrepreneur inside a big company.
      2. The core skills in a Microsoft development team (Test, PM, Dev, Design, etc) are ALL valuable outside of Microsoft… assuming you’re going to be working on software.
      3. I had good managers… and when I had a manager that didn’t let me choose my work… I found another team that would.

  • ChetCrunch

    I feel like we’re missing one perspective here, which is to work for a well funded startup run by guys like, well you. I’m 25 and am living this as we speak. I’ve been tempted to try out for the big guys here in Seattle several times, but this startup thing is just too much fun. I am still “using their funding to work on the cool stuff I want to learn,” meeting tons of smart and awesome people, getting paid a, if I do say so myself, decent salary, etc. AND I’m encouraged, more like forced, to wear as many hats as my neck can support. I don’t necessarily disagree with your article, as I think there are certainly great learning opportunities to be had at the big companies, but I think it’s important that we see this from all angles. Right now, I’m kinda liking my angle… :)

    • http://www.kickofflabs.com/ Josh Ledgard

      I think a small company or funded startup can also be a good learning experience as long as you are clear what you want to get out of it.

      The company I worked at after Microsoft had 64 employees when I started. I went there to get a broader perspective on what it takes to run a company like that and get a view beyond product development.

      It paid OK, but not as well as Microsoft. I took the cut in pay only because of the learning opportunity… not because I was under any illusion they were going to be the next Facebook.

  • RealsiticGuest

    The other side of the table is that big company could destroy your startup based on the previous contracts you signed. How can you NOT compete against Microsoft or Amazon? They do everything! Don’t forget those IP clauses, copyright transfers, first rights to ideas, NON COMPETE AGREEMENTS, and various other things that could make your future startup life miserable. Sure, you could be lucky and break out but your basing that entirely on luck and how far their legal council is from you. Look how often Microsoft and Amazon used those non-compete agreements to stop people from doing what they want (see Kai-Fu Lee).

    Tread this area very carefully. Be especially wary if your product will disrupt one of their products.

    • http://www.kickofflabs.com/ Josh Ledgard

      The reality is that Microsoft has zero interest in going after anyone legally for building a startup. Unless you walk off with the code to Office or Windows (or were a Senior VP) the harsh reality is that they would view your company as insignificant.

      I know two successful startups that even got Microsoft to open source the code they used as the foundation for their businesses. Then they sold the software BACK to Microsoft for profit afterwards because Microsoft needed the solutions they provided.

      But neither of those were seen as billion dollar businesses… so they were left alone. I’m not saying you should sneak around and not ask for some legal advice, but in reality… a small company or a startup is MUCH more likely to try and enforce a non-compete against you.

  • firdy

    Gates, Zuckerburg, Page, … are probably pretty happy that they went the startup route first

    • http://www.kickofflabs.com/ Josh Ledgard

      Yup. Those are the lottery winners. Everyone else is still buying scratch tickets.

      • Adam

        ^ Exactly.

  • guest

    The marketing skills at Microsoft are almost worthless. 90% of your energy is spent in working with other groups (i.e. wrestling with the bureaucracy, defending your budget (or your team), and getting “leverage” out of something that Microsoft has already done or a market position they already have. Lots of those behaviors and instincts are cancerous in a smaller company. Also, in lots of cases, you’ll find that in life outside of Redmond, Microsoft experience is a negative mark that you need to explain away rather than something that increases your reputation. I get that it’s stable, and sometimes there’s a time for that, but outside of engineering, I’d be very careful about thinking it’ll help your career more broadly. It’s a much bigger negative than people in Redmond like to think.

    • http://www.kickofflabs.com/ Josh Ledgard

      If a company would choose not to hire somebody based on where they worked (as opposed to what they’ve accomplished/potential) that’s not a place I’d like to work anyway.

      Good startups also spend a TON of energy trying to collaborate with other startups, forming partnerships, or scoring deals with larger companies… so maybe some practice with bureaucracy (and understanding how big companies think) can pay off as well.

  • bruinsensei

    I think quips citing Gates, Zuckerberg, and Page are easy to make but don’t really highlight that they’re the NBA All Star team of start ups. It’s like telling people, “Hey Michael Jordan made it… So can you!”. If you’re gonna do it I have to believe that you have less to risk in your 20s than later…. But you’re more likely to not have the experience to be as successful as you would later in life. But that’s pretty much the point: There’s no free lunch & it depends on your skills, goals, and the opportunities in front of you.

    • http://www.kickofflabs.com/ Josh Ledgard

      Exactly. It depends on your goals. The point is to be clear about them before you make any career choices. My choices were all made to reduce later risk along the way.

      Although you have less immediate risk you could also be risking your chance to be a founder at a startup in the future. Or at least the founder of a company you own more than 50% of.

  • Been There

    Sorry but I don’t agree- with two important exceptions. 1, if you go to a big company with the intention of learning how to manage people, money, etc. then yes it can be a great help and 2, the single most important reason to be at a big company is the connections. These are the most valuable asset you can accumulate for a startup. You will need them and they need to be actively cultivated i.e. you have to show value or you are just another business card.
    In terms though of just being at a big company and then deciding after a certain amount of time that you’re ready to do a startup, no, that’s probably not going to work.

    • http://www.kickofflabs.com/ Josh Ledgard

      Then it seems like you agree completely. I specifically say what I sought out to learn and that I made great connections… which was the point. :)

      • Been There

        My point was/is that if you don’t go to a big company with those two goals in mind then you will leave no closer to being an entrepreneur then when you started. In other words big company experience is nice to have but by no means is it automatically helpful or even required.

        • http://www.kickofflabs.com/ Josh Ledgard

          Every opportunity is what you make of it. If you go to a startup expecting to get rich quick and never get outside your comfort zone you’ll probably fail there as well.

  • http://twitter.com/alwaysbshipping Tom Leung

    Great post Josh — love the founder dad club reference!

    I’m a big fan of what I’ll call the “surf and turf” model where you get some initial experience at a big company and then jump into some funded startups before founding your own venture.

    Perhaps even more important than the size of the company is probably its culture, your manager, and whether you are passionate about its mission.

    • http://www.kickofflabs.com/ Josh Ledgard

      I hadn’t heard “Surf and Turf”, but I’m obviously a fan of the model.

      I also agree that the culture and management has a LOT to do with what you get out of any career experience. That’s why I’ve always tried to stay with good managers and leave the bad ones quickly.

  • http://twitter.com/nparekh00 Nikesh Parekh

    This a great post, Josh. At start-up, you can end up dealing with a lot of the mundane tasks of running a business – HR, insurance, accounting, real estate, etc. Depending on where you are in your career, that may not be the best use of your time.

    • http://www.kickofflabs.com/ Josh Ledgard

      Thanks!

  • RunTheNumbers

    There are advantages and disadvantages to nearly every situation. Extracting value from those situations and making them applicable going forward is what I’ve always strived to shoot for throughout my own career.

    I’ve found measuring the learned technical value between a startup vs. big-co in terms of going broad vs. going deep. A startup will have you wearing many hats, and forcing you to be competent in many of them. A big-co lets you dive deep into particular areas, perhaps learning and uncovering things you wouldn’t have the bandwidth for in a startup.

    I’ve not found a good correlation between managing resources at a startup vs. big-co. I’ve met many who have left their big-co job for startup pastures, then struggled because they simply weren’t prepared for the guerilla-level strategies of thriftiness and resourceful-ness necessary to survive. Conversely, I’ve also seen startups acquired by big-co that, once in the fold, weren’t prepared to take advantage of many of the resources available and failed once in that environment.

    • http://www.kickofflabs.com/ Josh Ledgard

      Agreed. I once hired someone at a smaller company who’s first question was “Where is the spec template directory?”. I knew, right then, I could have hired better. :)

  • Haf-N-Haf

    Downsides of a startup: no supply room full of yellow pads and pens, no fridge refilled daily with Talking Rain and milk.

  • http://www.facebook.com/corey.hansenfounder Corey Hansen-Founder

    Good points Josh. My mentor, John Huntsman Sr., said go to work for someone else first and let them pay for all your mistakes, and then go out on your own. I’ve often wished I followed his advice. School of hard knocks is often the most expensive way to go and can be the longest route. Cheers!

    • http://www.kickofflabs.com/ Josh Ledgard

      Thanks Corey!

  • chris livermore

    Great article that highlights an important item that is overlooked by many a startup entrepreneurs, how much money you have in the bank determines how crazy you can be with your startup.

    If you quit your dayjob to throw yourself into the exciting roller coaster of emotions that is a startup AND you have a mortgage, car payment, living expenses AND you are going to bootstrap, you are heading for failure. How does you startup success have anything to do with your personal financials you ask? Simple, when you quit your day job to work on your brilliant billion dollar startup idea, that idea now becomes your paycheck. In order to make your idea support the startup AND support your life you change your focus to making (or raising) money anyway possible instead of focusing on the customer who you were building the idea for.

    My suggestion is to not necessary wait until you have your house paid off and 10 years in at said big corporation, just keep the startup for your second shift. There are a good 6 hours available after you leave the corporate office and head home. That gives you the freedom to be batshit crazy and build that next billion dollar startup while letting corporate money pay for those important living expenses like food & shelter.

    • http://www.kickofflabs.com/ Josh Ledgard

      RE “Second shift” – I agree. That’s another way to go.

  • TP

    Not every one is as lucky as you to land a job at a big company and manage his own team and budgets right after the school. It will take long time for a person to reach that level in big company. Also in big company the work flow and business management is not very transparent.

    I agree that working in big company will give you knowledge and contacts about a successful organization that will be helpful in running your own company. But it takes long time to acquire that. Now a days young people are not patient enough.

    I will say work on couple of start ups at first and then move to big company or start with mid-size company which have both the benefits.

    • http://www.kickofflabs.com/ Josh Ledgard

      To clarify: I didn’t manage budgets and teams right after school. I worked hard, put in the time required to earn trust, and was rewarded with more opportunity choice over time. I think the same could be said of just about any job offer.

      The difference is, that at a new (small) startup, the opportunities are more limited by necessity out of the immediate needs. The larger a company… the more roles, needs, and opportunities they can offer you to earn new skills.

  • http://www.facebook.com/jmacduff Jeff MacDuff

    Great post :)

    Working at a big company building product is a great way to learn how to build software. There are lots of basic skills you learn by churning out software in a structured environment that directly map to what all software startups need to do.

    Some people can go straight to startups (without big company experience) and be super successful , while others need that training a big software company can offer.

    If you think of the big company as a “software school” it makes allot of sense, and gives you good benefits and a pay check while your learning.

    This isn’t about right or wrong, it’s about finding the right environment that matches your skill set and learning pattern.

    • http://www.kickofflabs.com/ Josh Ledgard

      I agree completely with your last two statements. :)

  • Vishesh

    Hi Josh. Good write up!

    I have seen your website. Some nice concept there.

    Don’t mind me asking. But how did you actually execute this idea. I mean how did you plan this entire concept and how do you become aware of what features to be added to your services.

    And then who designs the fantastic pages, the themes, color, logo’s and icons. Where to place what on the pages. And then who works on the content write ups. Who tells you what latest can be added to the website.

    Do you have the dedicated teams for this purpose or do you contract it or outsource it?

    While recruiting people, and how do you how many people are required, and determining right qualifications & experience required?

    Many people may have great ideas. They may have funds too!
    But how do we execute is what really intrigues me.

    • http://www.kickofflabs.com/ Josh Ledgard

      There is a much longer answer, but the short one is:

      1. My co-founder and I are both technical so we were able to build the initial platform.
      2. We outsource a lot of design work to contractors.
      3. We started really small. Our MVP was literally only 5 page themes and no color, font, icon, image choices. The only thing you could do was edit the copy.
      4. We expanded based on listening to what paying customers wanted.
      5. We validated what they wanted, frequently, by offering to give them a custom solution for a price. If someone was willing to pay the price for a custom solution… we knew there were probably more people interested in the feature… especially if we got the request multiple times.

      Part 5 also gave us extra revenue in the early days.

      Thanks,
      Josh

  • _Hater_

    If you want to end up as a co-owner of a 2 person company doing landing pages, follow this piece of advice?

    • http://www.kickofflabs.com/ Josh Ledgard

      The number of founders does not equal the number of people that work on the product or jobs we’ve helped create. Full time employees do not equal success. Nor does it infer revenue numbers. Hate if you want. I love running a business that solves real problems for people… and getting paid for it. :)

  • Michael Beversdorf

    I just left a big company after 16 years and recently started working for a startup, and I have to say that this goes the other way around as well – people at big companies would benefit from working for a startup, which teaches you end-to-end responsibility, the real importance of customer relationships and a clear link between value for the customer vs. focus for product development work.

    You had the insight (from where?) to treat your big company job as startup training, not all of us have that.

    • http://www.kickofflabs.com/ Josh Ledgard

      The insights came from:

      1. The leadership in my first teams that encouraged ownership and taking on “side projects” outside what would have been the scope of my job if I just read my goal sheet.
      2. My own desire to do something better. I didn’t always know what I wanted to do… but I knew it wasn’t to be a cog a large factory that could be automated away… which was ironic since my first job was writing test automation… that took jobs away from manual software testers. :)

  • http://twitter.com/over6ft O.as.in.Omar

    ” You learn how (and how not) to run your own business—on someone else’s dime.”… that caught me

    • http://www.kickofflabs.com/ Josh Ledgard

      That was my favorite part. Learned lots of lessons I didn’t have to pay for.

  • http://twitter.com/jameskkaiser James

    I agree with some of your points John. As a recent college graduate who has dreamed of being a player in the start up game for some time now I see it extremely difficult to break that first barrier of funding. Even with a seed fund that only keeps my business going for a few months before I have to turn to secondary investors to raise enough money to keep going for the rest of the year. Each time they are taking away a bigger chunk of my company and my team’s portion keeps growing smaller.

    Important to note though – I did not come from a top tier school, and my degree is in a less than desirable field. This leaves me with an issue you did not address. I am not making enough to set aside side business money so what am I to do? One option really – outside funding.

    • http://www.kickofflabs.com/ Josh Ledgard

      That’s a situation where I might agree that you might be best using a smaller company or a startup to further your education. Those companies are typically more willing to take risks on people. I know I would.

      Then you can work yourself into a more desirable skill set for funding or working at a larger company that pays more.

  • Marko Markovic

    I kinda agree with this article, but assuming that you can just waltz in a big company and get a job like a kid walks in a candy store is wrong. Not everyone has the luxury of working in a big company.

    • http://www.kickofflabs.com/ Josh Ledgard

      Agreed. But what’s important is that you know your end goal. Then you can choose to take jobs at smaller companies that pay you back in education… that you can turn around into a higher salary somewhere or into a skill set that you could use to start your own business.

      I guess my point is that I view it as a long game. There are no overnight successes… but you can shorten it with some planning towards your goal.

  • jon

    What a load of total tosh. Always go with your own firm. Big firms hate entrepreneurs or innovators who want to do things differently. By the time you have done your tour of duty all that flair and drive will have disappeared along with your hair.

    • http://www.kickofflabs.com/ Josh Ledgard

      Yup. It’s never worked for anyone. Not even me… except that it has. If you big firm or manager doesn’t like an innovator… I agree. It’s time to switch teams or firms. Most managers I’ve had were always supportive as long as I made a good case why my education was good for them.

  • scott_mcleod

    I disagree – Sounds like a Microsoft recruitment pitch to me. Reasons I feel that choosing startups first is best for young professionals

    1) Big corporations will mold you into their way of thinking and bureaucracy, making it much harder to break if and when you go back to starting your own gig.

    2) Startups force you to learn things quickly and be agile to quick changes – this is a skill set and way of thinking that cascades into lots of situations.

    3) Joining a startup allows you to build a more useful network than in a big company. You work closely with their investors, advisors, accelerator program etc. All which are tremendously useful when you want to start your own gig.

    4) You see less failures in a big company – the “walls closing in” is fine because if you are competent you could probably back track the issues that got the company in the corner. Maybe it was the second pivot or expanding to iOS and Android too soon and wasting resources, maybe the founders disagreed too often or one was not technical enough etc.

    4) If you’re young you have enthusiasm and curiosity you don’t want to waste that at a place where your contributions are so minor they go unnoticed outside of your direct manager.

    Besides all this aside – You don’t see startups trying to implement practices to “be more like a big company” you see corporations hiring and building programs to “be more like a startup”