Disclaimer: This article was written few years ago and may no longer be relevant as software engineering has changed a lot in the last few years. This is what may be more relevant now: Future of Software Engineering - Gaurav ChandakDeciding which company to join might be a difficult decision. When you join a company, you are making a big commitment and it is an important life decision. The decision becomes more crucial when one of the companies that you are passionate about is a startup.
I have written this article to list down all the factors that you may want to consider before deciding. I have taken a few scenarios as well to help you figure out the one that is closest to yours.
If you are not sure what FAANG means or what are the different types of startups, consider reading the 'Product-Based Companies' section of this article.
Factors to consider while deciding which company to work for
There are different factors that you might want to consider before making a decision. The major factors are:
- Salary (Cash Component)
- Long-Term Wealth Prospects (Stocks/ESOPs)
- Learning and Growth
- Ownership, Decision-Making, and Impact
- Work-Life Balance (WLB) and Job Stability
- Smart/Hard-working Peers and Network
- Brand and Status
- Moving Abroad
Note: I have added "My recommendation" while talking about most of the factors. The recommendations are based on my opinions and might not resonate with many people. You may want to consider multiple opinions and then decide based on the ones that resonate the most with you.
Salary (Cash Component)
One of the biggest factors because of which we work is money. By doing a job, we get a fixed amount of salary every month subject to annual or bi-annual increments. Let's look at how this factor varies across different types of companies:
- Most Top Tech Companies pay extremely high salary
- Most Unicorns pay at par with top tech companies
- Smaller startups generally pay lesser salaries than top tech companies
Most people make decisions based on the salary component only. Salary is the most important factor but should not be the only one.
Long-Term Wealth Prospects (Stocks/ESOPs)
Company stocks/RSUs/ESOPs can help you become extremely wealthy if the company grows a lot. Many startup employees in India have become millionaires solely based on ESOPs. It might seem like a no-brainer to work for a startup but there is a risk involved as most startups fail.
Stocks or ESOPs are high-risk, high-reward components. If the company grows and does an exit (IPO/Acquisition) or makes a stock buyback then you can become extremely wealthy compared to working in a big tech company. If the company fails or does not grow as expected then you get nothing from the ESOPs.
Let's look at how this factor varies across different types of companies:
- Most Top Tech Companies provide a very good amount of stocks but the growth potential is not as high as compared to a fast-growing startup.
- Most Unicorns provide stocks almost at par with big tech companies and the growth potential is also higher than top tech companies but it is much riskier than big tech stocks.
- Most Smaller Startups provide a very small amount of ESOPs but that amount generally denotes a big percentage of the company. If the company grows a lot then that percentage can make you much wealthier than the above two. The chances of the startup reaching that stage is very low (high-risk, high-reward).
My recommendation: Many people ignore the stock component of the salary. In the case of public companies, you can sell your vested stocks anytime you want. So they should not be ignored, for sure. In the case of startups, you should consider stocks as an important part of your compensation if you believe in the mission and growth prospects of the company.
Learning and Growth
Investing in your learning and growth in the early stages of your career can be the best thing that you can do for long-term success and wealth. Starting your career with a comfortable job where there is limited learning and growth potential can set you back in the long term.
Let's look at how this factor varies across different types of companies:
- The learning and growth potential at early-stage startups is very high. You get to learn the breadth of software engineering along with product, business, sales, and marketing insights. The problem here is that most startups don't follow engineering best practices and do not work at scale so you might miss those learnings.
- The learning and growth potential at big tech companies would be comparatively lower. You would mostly be working on a very abstracted and small piece of the huge product. The iteration would also be very slow. The unique learning aspects here would be getting to work on high-scale products along with learning engineering best practices.
- You would get the best of both worlds and the worst of both worlds in the case of unicorns or other late-stage startups. Medium speed of iteration, more breadth than big tech but lesser than an early-stage startup, a decent amount of best practices and scale, etc.
My recommendation: Considering only this factor, it is better to start your career at a startup (early-stage or late-stage) based on your risk appetite. After that, if you want to switch then you can move to a late-stage startup or a big tech company in a mid-senior role (2+ years).
Ownership, Decision-Making, and Impact
Having ownership over the products or features, having a say in the decision-making, and creating an impact on people and businesses through your work can help you a lot in your career. These things will help you stay motivated and will keep the work interesting. You would also become an essential part of the growth of the company.
Let's look at how this factor varies across different types of companies:
- Ownership and Decision-Making would be very high at an early-stage startup. You will be a part of a very small team and will own a very huge chunk of the entire product. The impact for the startup might be high. Impact for the users and clients depends on the product. The long-term impact could be very high.
- Ownership and Decision-Making at big tech companies would be much lower compared to a startup but much higher compared to a service-based company. Even small changes could impact millions of lives. The impact for the company might not be very high.
- Ownership, Decision-Making, and Impact at late-stage startups would generally be between what you would get at an early-stage startup and a big tech company. It might also vary a lot from company to company.
My recommendation: Considering only this factor, if you are looking for high ownership and want to be a part of decision-making, join a startup. If you want to impact millions of lives in the near future then a late-stage startup or a big tech company might be a better choice.
Work-Life Balance (WLB) and Job Stability
Work-Life Balance involves working for 8-9 hours/day and not having to put in any extra time. This helps create a separation between your work and your personal life.
Most big tech companies across the world provide an amazing work-life balance. Most early-stage startups across the world have very little work-life balance as they need to work hard and move fast. Microsoft and Google are some of the best companies when it comes to WLB.
Job Stability is when you do not need to care about getting fired because of some issues in the company.
Let's look at how these factors vary across different types of companies:
- Work-Life Balance and Job Stability are very high at the top tech companies.
- Work-Life Balance is pretty low in early-stage startups. Job Stability is decent.
- Both of them are in the middle ground at late-stage startups.
My recommendation: It is better to optimize for learning and growth in the early stages of your career instead of WLB or job stability. WLB can be optimized for after 3-5 years of employment.
Software Engineering is a highly skilled role with a lot of demand. If you are skilled then you do not need to worry about staying unemployed.
Smart/Hard-working Peers and Network
If you are looking to work with smart and hard-working peers, most big tech companies would provide you with such an environment. Though things have changed with the startup boom in India. Most startups are founded by smart and hard-working people. They try to make sure that they hire smart and hard-working people.
You can figure out the same by looking at the profiles and work of the employees on LinkedIn.
Brand and Status
Brand and Status are important to many people that have led to the FAANG obsession in India. Brand and status are important if that is going to help you achieve your long-term goals. Otherwise, you should optimize for the above factors instead of brand and status.
Moving Abroad
Most big tech US companies like Amazon, Microsoft, Google, etc have an option to move abroad after a few years of working at the Indian subsidiary. If you have a long-term goal of moving abroad then joining a big tech company might be a good idea.
So how do I decide which company to join?
In general, you should try to figure out your long-term goals and short-term goals. All your decisions must be based on moving closer to both these goals. If you've to choose between a long-term goal and a short-term goal, prioritize the long-term goal.
There might be certain scenarios when you will have to prioritize short-term goals at the expense of long-term goals. Example: If there is a financial crisis then it might not be a good idea to depend on ESOPs for long-term wealth and lose out on a higher salary.
Let's look at a few examples of what your long-term goals might be and what I would have chosen if I had been at your place.
Note: In the below examples, startups include both early-stage and late-stage. Choosing among them would be very specific to your scenario.
- Comfortable Life without much hassle: Choose Big-Tech (High Salary, WLB, Job Stability)
- Moving abroad (in 2-4 years): Go to big tech.
- Moving abroad (in 5-7 years): Might start a career at a startup (growth and learning). Need to join big tech at least a couple of years before you wish to move abroad.
- Entrepreneurship (after 4+ years): Start your career at a startup (learn) then move to big tech (money, brand, WLB while experimenting)
- Entrepreneurship (in <4 years, no financial obligation): Work at a startup (learn and network).
- Entrepreneurship (in <4 years, financial obligation): Work at big tech (money, brand).
- Side-hustle (tech): Choose Startup (Learnings) and then move to Big Tech (WLB).
- Side-hustle (non-tech: YT, teaching, etc): Choose Big Tech (WLB and Brand).
These are based on what I would have done in these general scenarios. Your situation might be very different and specific. You can use the above as a guide.
If you need any specific advice then you can reach out to me on Whatsapp clearly mentioning your scenario and what I can help you with.
