This article has the right idea, but is obsessed with money. Money is not the fundamental motivator for all entrepreneurs. There are plenty of people who would rather work for themselves and barely be able to pay rent for the rest of their lives rather than work for a large company simply because they will be more happy doing what they love and barely managing to feed themselves than they will doing something they ha…
Why Entrepreneurs Hate Working at Big Companies
31–40 of 50 posts
Re: Why Entrepreneurs Hate Working at Big Companies
#32>Corporate politics and bureaucracy are just another obstacle that can be learned and overcome
You can learn to navigate politics and bureaucracy, but you can't overcome them without becoming management - in which case your hands are generally bound to the same metrics that your previous bosses were as well.
If it takes 4 levels of review just to see if my project can be begun or to build a team to begin even MVP development, I don't want to be near that. It's too slow, access to resources, if available, are so tightly scrutinized that if there is any failure you can kiss future chances goodbye, attaching new hardware or software is a nightmare because the systems need to all be compatible on this network etc.. etc.. all make the large corporately integrated system terrible for the fast paced error>revise>error>revise cycle that entrepreneurs want.
This is why the Valve model of flat organization is so appealing to many and spoken about in terms like "future of the workplace."
Re: Why Entrepreneurs Hate Working at Big Companies
#33Earlier quoted context omitted.
Is it really an "inability to understand", or just an "unwillingness to tolerate"?
"tolerate" makes it sound like it's a negative system. My experience is that corporations contain systems which startup founders would absolutely love to utilise given the chance. I have built technology within organisations that within months is in use by multiple clients who have $1B+ market caps. I've seen projects funded with higher risk profiles than most VC's would tolerate because those funding it truly believ…
There are, simply put, structural reasons that truly big companies tend to be deeply dysfunctional and annoying to work with that have nothing to knowing how to play the game in an efficient manner (I mean, yes, maybe you can sometimes bring about change with enough hustle, but often the red tape or extra baggage imposed by the big corporation is so large that it makes it impossible to efficiently pursue most opportunities).
As a simple empirical matter big companies are rarely dynamic in that sense. They rarely change and when they change it tends to be knee-jerk, late responses (e.g., acquiring some startup at a large premium late in the game after they've proven it works). No doubt big companies succeed and small companies succeed (since we're over-generalizing), but they tend to succeed for very different reasons and in very different ways....*
Big companies often "succeed" largely because of inertia, stable cash flows, and pools of capital that they can readily tap. They generally do OK at hanging onto their key product/service areas for a few decades, but very few manage to leap into new areas successfully on net. Big companies rarely take that sort of risk-- or at least not until someone or something has effectively forced the issue.
Big companies are kind of like a big cargo ships where it can take miles to stop and even turning ability is very limited due to inertia. Even the best captains only have very limited ability change the trajectory in the short run and it's very hard for outsiders to tell how effectively the captain is doing his job by simply looking at where the ship is and its current trajectory.
To generalize, this situation means that the feedback loop for senior management tends to be much delayed such that they are often not held accountable on a timely basis (and when they are it's often in an erratic fashion--to find a scape goat, to send a signal to markets, etc). Likewise, this high inertia arrangement tends to greatly amplify principal-agent problems that exist in all organizations (small companies have it to some degree to, but they can't afford much of it). A senior manager may well privately agree that some risky plan demonstrates a great IRR for the shareholders/company, but rationally avoid this knowing that the culture of their organization is such that the personal rewards for taking such a risk are much smaller than the career risk attached to the project if it fails.
There are also, quite frankly, a lot of diseased big company cultures that look down upon key employees since they lack a certain pedigree or aren't in an area that's perceived as being sufficiently valuable by people (though part of this is often lack of ability to understand what's important and why). Conversely, many of these same organizations tend to fast-track certain people that they believe are high potential -- but even if the individual really does have the potential to truly contribute they are often unknowingly denied the opportunity to get the depth of exposure necessary in any area of the company as they're moved around from area to area (many of these people are truly dangerous since they're often very naive about key issues and don't know how little they truly know)
On a related note, these entrepreneurial concerns are particularly true if you work in an area that's not really part of the big company's business line. If you work in sales and marketing or if you're working in a key product area you can do pretty well for yourself at many large companies providing you're willing and able to play the right games, but if you work in, say, IT or some other cost center in a company that's not really in the IT business... you'll typically do much better for yourself and for the world in a company that's actually effectively competing in that area where your contributions have much more of a direct and visible impact on the bottom line.
* NOTE
There are some well functioning large companies (especially certain divisions within them) and some terribly managed small companies, but as a general rule--to compare, say, the Fortune 500 to your typical high growth startup or small-to-medium sized well capitalized business-- this holds pretty well.
Re: Why Entrepreneurs Hate Working at Big Companies
#34Working at any company always starts out well. I have so many ideas, thoughts, and energy I want to put into my position. For me, it always fades after about 6 months.
The politics, managers, ridiculous ideas that I'm forced develop, long hours that could have easily been prevented with better practices usually ruin it for me.
Re: Why Entrepreneurs Hate Working at Big Companies
#35This article has the right idea, but is obsessed with money. Money is not the fundamental motivator for all entrepreneurs. There are plenty of people who would rather work for themselves and barely be able to pay rent for the rest of their lives rather than work for a large company simply because they will be more happy doing what they love and barely managing to feed themselves than they will doing something they ha…
both an engineer and an entrepreneur are compelled to solve a problem, it seems though that difference is the entrepreneur is also compelled to profit financially from the solution.
I'd say the main difference is that an entrepreneur "shifts resources from areas of low productivity to high productivity", while an engineer comes up with the most viable technical solution to a problem. In other words, an entrepreneur's job description includes opportunity costs, while an engineer's job description leaves that for an executive or product manager to worry about. Profit is a natural consequence of that, since if you are successfully shifting resources from areas of low productivity to high productivity, the difference can be captured as profit.
Re: Why Entrepreneurs Hate Working at Big Companies
#36Earlier quoted context omitted.
Is it really an "inability to understand", or just an "unwillingness to tolerate"?
"tolerate" makes it sound like it's a negative system. My experience is that corporations contain systems which startup founders would absolutely love to utilise given the chance. I have built technology within organisations that within months is in use by multiple clients who have $1B+ market caps. I've seen projects funded with higher risk profiles than most VC's would tolerate because those funding it truly believ…
I absolutely believe that we need big companies and that small companies are not always better than big. Big company scale and maturity is often necessary to efficiently deliver products and services. Even where both are possible, the inherent loss of agility or individual responsiveness that comes with this scale can often be an a socially optimal tradeoff (for some things, in some areas, etc).
Likewise, I believe there is such a thing as too much "entrepreneurship" or simply mal-investment (e.g., too many me-too companies or people mindlessly an area that's doomed to fail).
But this really don't change the fact that large organizational scale is strongly associated with a certain type of dysfunction to a typically much greater degree than smaller organizations that make startups an utterly crucial part of our economic development or that certain individuals can simply be much more socially productive in smaller more entrepreneurial organizations (I think you kind of acknowledge it when you allude to knowing how to traverse the system-- this effort is definitely non-zero and takes real time and attention away from dealing with issues that can often be dealt with much more efficiently in other organizations)
Re: Why Entrepreneurs Hate Working at Big Companies
#37>The answer is compensation. Not that big companies don’t compensate them enough, but that the compensation structure is not aligned with an entrepreneur’s world view. As far as I can tell the dominating decision factor for everyone I know who runs their own company seems to be "freedom from management". That's why people work for years at an expected value of a below-market wage. That's why people leave a year into…
that's what a lot of people say, but I think it's more of an excuse/laziness around explaining the actual problem. any entrepreneur who raises a series A will be managed by his investors. if he is not the CEO he will be managed by the CEO and the investors/board.
Re: Why Entrepreneurs Hate Working at Big Companies
#38Working at a big company makes sense if you can get allocated to a great project, and it's hard to tell from outside what the good projects are. Otherwise, you have to deal with red tape and approvals and resource requests and headcount issues that will eat your soul and turn you just as lazy as the middle managers who create such processes (who do so because they've become demoralized and lazy and realize that dysfunctional bureaucracy, like undocumented code, provides job security).
Re: Why Entrepreneurs Hate Working at Big Companies
#39This article has the right idea, but is obsessed with money. Money is not the fundamental motivator for all entrepreneurs. There are plenty of people who would rather work for themselves and barely be able to pay rent for the rest of their lives rather than work for a large company simply because they will be more happy doing what they love and barely managing to feed themselves than they will doing something they ha…
I didn't intend it to be about money. I also said that entrepreneurs want a 1% shot at ruling the world (king vs. rich). It's really about perception of control and perception of fairness around hard work.
A 75% shot at never having to take goddamn orders, on the other hand, is something I'd do things I can't put in print for. That's what I'm aiming for. I don't want to be some despot or extortionist telling others what to do, nor do I want to be told what to do. I want to have the opportunity to lead, if others will follow, without entitled and artificially empowered jackasses (i.e. typical corporate management) getting in the way of that.
Re: Why Entrepreneurs Hate Working at Big Companies
#40Way off the mark. It's not about compensation (if you succeed, VCs will tear you to shreds via multiple liquidation preferences and horrible terms). It's about autonomy and career development. Working at a big company makes sense if you can get allocated to a great project, and it's hard to tell from outside what the good projects are. Otherwise, you have to deal with red tape and approvals and resource requests and…
Sorry, it is about the money. It has always been about the money.
As I get older, I realize nothing apart from money even matters.