Thursday, December 01, 2016 at 10am

Top 4 Benefits of Joining a Startup Immediately After an MBA

Worried about whether or not to you’d want to jump straight from an MBA into a career with a startup?

While the first year of a two-year MBA at business school is often about acquainting yourself with the program, getting to know your classmates, forging new relationships, and exploring new industries and opportunities, the second year is usually seen as the time to get down to business. When my class reunited in Boston after our internships, it was go-time – people weren’t there, after all, just for two years of education and networking. They wanted jobs! And recruiters from all the big consulting, tech, and finance firms were there as well, hungry to fill out their incoming class with MBA graduates.

While many of my classmates had expressed a desire to start or work at a startup post-graduation, once interviews and internships were complete and offers started rolling in, the salaries and benefits of large corporations often proved too much to turn down. Although many of those classmates are happy with their decisions, I’ve also seen a very high percentage of those that did ignore the large-company siren song find high levels of fulfillment and enjoyment in their work. Salary and benefits aren’t all you should gauge when choosing a company – there are several benefits small companies and startups can offer that are unique to their size.

1) More autonomy

One thing that a lot of highly ambitious MBA graduates love about small companies is that they get to set their own parameters for success and choose how to execute on them. At smaller companies, there’s often very little process established, and that means go-getters can operate without a ceiling and make as much of an impact as they are able. That said, you’ll want to be sure that the person you report to at a small company appreciates that kind of mindset – the last thing you want is to have no process but to be simultaneously micromanaged. 

2) Bigger upside

While large companies often offer stock compensation as well as salary and bonus, it’s important to recognize that those options really bear very little resemblance to startup stock. For one thing, large company stock (if public) is so liquid that you might as well factor it into your cash comp. On the other hand, small company stock is highly illiquid (you may or may not ever get to exit), but it’s also very likely to be subject to high growth. So, while the monetary values of compensation through options may be similar regardless of a company’s stage, small companies, if they do well (which you can directly affect!), can turn those options into big returns much more easily.

3) Broad and fast learning

There’s no better way to learn, as an MBA graduate, than experience. In a small company, you’ll have a huge variety of experiences that can’t be replicated in the specialized environment of a large company. At any small, fast-growing company you’ll almost certainly play the role, at some point or another, of product manager, salesperson, growth hacker, manager, consultant, and more. You’ll be able to see the inner workings of a company across departments, giving you greater empathy and understanding when the company grows or if you then work in management at a larger company. And, you’ll learn incredibly quickly – in a startup, there’s often no other way!

4) Navigating uncharted territory

Don’t underestimate the excitement of working on something totally new each and every day. While in a large company, the path you’re taking is probably well-worn (on both the individual and company levels) at a startup or small company, the opposite is true. Every day you’re facing new challenges as an individual and as a company, which can be incredibly exhilarating. While some people may crave stability and consistency day after day, my classmates who have chosen to work at startups have, by-and-large, found a huge sense of fulfillment and accomplishment by working on something that literally no one and no company has ever done before.

An MBA graduate from a great school has a fantastic ‘floor’ for a career. If working at early-stage companies interests you, remember that you will most likely still be able to find gainful employment should all else fail. Establishing that floor means you can have incredible opportunity because the risk you take working at a small company has limited downside, but potentially unlimited upside.

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Jaren Nichols is a Harvard MBA who supports MBA grads pursuing careers at smaller companies where they can put more of their skills to use and benefit both themselves and their companies. Jaren currently works at ZipBooks, an accounting software startup that also provides paid bookkeeping services, but his previous experience includes Nest, Inside-Sales.com, Accenture and Google, where he launched a first generation Incentive Compensation Management product.