Recently, at a business school entrepreneurship event, a student said she was planning to drop out of the placement cycle and instead seek opportunities in a start-up. She asked me how different it is working for a start-up as compared to a traditional corporate firm. The first thing that struck me was how normal it has become for young people to join risky start-ups instead of opting for the security of a large company. Here are some key differences between working for start-ups and large firms.
Corporations have good infrastructure and facilities backed by well-manned support functions like human resources, administration and finance, which help employees focus on their direct tasks.
When I moved from a corporate life to my first start-up in 1999, I had to travel to Mumbai and realised I had to buy my tickets and book my hotel and local transport on my own as there was no admin department. Of course, such things are convenient today, thanks to travel portals and ride-hailing apps, but the point is still valid. I also had to fix appointments with senior people in an industry where I had no connections. Earlier, folks would be open to meeting me as I was a professional manager in Wipro and the brand opened doors. Now, I had to hustle, plead and network just to get people for a few minutes on the phone.
Large companies have a multi-layered organisation with direct and dotted line reporting relationships, and stakeholders across departments get involved on all important matters. This leads to delays in decision making and reduces the agility of the companies. On the other hand, early-stage start-ups recruit employees based on their bias for action. Start-ups focus on taking quick decisions, with the sole goal of moving forward. This approach increases the chances of decisions going wrong but founders learn from errors, make rapid course-corrections and move on. Delayed action in a start-up spells death.
Unlike in start-ups, where employees should be open to doing anything, corporations define narrow roles in specific functions. Each person can do only so much on their own, beyond which they need their manager’s approval. I remember the first employee we hired in 1999 for our start-up. All the six co-founders were busy running around and we needed someone to manage the office. We hired an assistant who was part of my team at Wipro. On her first day, she asked me what she was supposed to do, and I replied, “Everything”. After the initial confusion, she took to the new role like fish to water and, before long, established herself as someone whom all the co-founders could depend on. Most experienced professionals struggle to adapt like this when they join start-ups.
We will discuss some more differences in the next column.
(The writer is a serial entrepreneur and best-selling author of the book ‘Failing to Succeed’; posts on X @vaitheek)
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Published on July 21, 2025