I received an email from Auren Hoffman posing the question: Is it more risky to join a start-up in todays economy, or a big corporation? Read his blog then come back and read my thoughts on this important subject.

Auren's Blog: Summation will make you think

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Well readers, what do you think? Please add your comments to this entry. What follows is a lengthy (sorry) reply, my thoughts on this subject.  

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Auren, this is such an important subject in today's economy. When my dad went to work for Exxon (Standard Oil, Esso back then); it was considered a job for life. He worked there for over 30 years. When I graduated from Grad school (1981  ouch looong ago and many lifetimes ago); the aspiration of most of my fellow students was to land a job at a major corporation and ride the escalator up. I landed at Nabisco during the "Barbarian at the Gates era"). Big Corp was big, secure and fun.  At the time, I probably couldn't name a single small company or start-up. I eventually moved on the ADP, where I rode the escalator up very well, till I fell off (we'll get back to this in a moment).

While I was gainfully employed at ADP, the internet was at full boil. I watched many an executive jump to exciting internet jobs, with money to burn and no clear business model. And then they got burned when the internet bubble exploded.

But something funny happened; the entrepreneurial experience these "risk taking" folks gained at these VERY RISKY start-ups' was valued in BIG Corp. It was also widely believed that after they were properly chastised for leaving the BIG Corp nest; they would be dedicated to their Cubicle jobs forever.

Yes, I was tempted to try this crazy market. I recall meeting with some fantastic wide-eyed entrepreneurs mostly in Silicon Alley (NYC). What chutzpah these guys had. I remember one such meeting, a well funded ICG start-up. His quote to me; "Stephen, it will be a bloody war for two years as we beat back our competitors and then we'll sell out and live in beach homes on Cape Cod!  Beachfront!!" 

WOW! Sign me up; I am ready to take that hill! This exciting statement was delivered by a middle-aged executive whose venture was also partially funded by a well established Brick. This wasn't some pimply teenager.  Ah but reality struck. I had a child and a mortgage; responsibilities.

My point; my financial situation made it compelling for me to dream of the bloody war and beach front homes; but to stay with Big Corp for safety and benefits and steady paycheck and my 3% raises. If I was without responsibilities, I would have signed up on the spot - no doubt!

Fast forward; I decided to stay with ADP, the Big Corporation. I felt safe. The company then sent me to Atlanta, paid my way, put walking around dollars in my pocket; helped me get a big ole southern McMansion and life was good. A few months later, oops the escalator stopped and I was downsized!  Big Corp restructured me out the door. Wow, didn't see that coming.

But this was in 2000; the job market was terrible! Thousands of people, some great, some deadwood, were being released. What happened to the safety of Big Corp? Yes it is true, I did feel betrayed.

I was out of work a year; and learned to business network and began to meet a whole new generation of entrepreneurs. And for some; their ventures really weren't any more risky than what Big Corporations offered. I began to actually look at my exodus from ADP as a good thing - a positive thing! Thank goodness that I was downsized?!

>>>--- Readers, there will be a point coming up soon, hang with me.

Auren, I would have disagreed with you in 1998 and even in May 2001; that taking a risky start-up could be more favorable than the safety of Big Corp. However today I am in FULL agreement with your premise. Heck, no job is permanent.

Someone recently asked me if I was seeking a consulting or permanent position; I said: "what's the difference?" 1099 or W2? Paid medical or Cobra - but in the end - what is the difference?

I interviewed with large and small companies, and turned down a Big Corp to experience a small and growing interactive online marketing agency, which was founded by a mentor from my ADP days. The founder of this start-up left Big Corp on his own, exiting his escalator while still moving up.

I was employee 21 and learned how to do everything and I loved the energy and passion. I used to say that when we kicked the ball at Big Corp; even with a solid wind-up, success was measured in inches. At this marketing agency; success was measure in miles. And once someone kicked the ball, everyone ran after it at top speed to kick it again!

So long story... well long: Auren, I do agree with you 100%. Each person needs to do a lil soul searching before they make such a decision. However, in today's economy - you are correct - Big Corp is just as risky; maybe more so; with less upside than a smaller company or start-up. The experience I have gained from DigitalGrit (which I left recently) has opened incredible doors for me.

In speaking with other start-up's and small agencies, I was told they specifically were seeking people that with risky start-up experience, rather than a Big Corp lifer.

So in conclusion, in today's economy a start-up that is paying a reasonable wage and offering benefits is no more or less risky than joining a Fortune 1000. And the experience at these smaller operations is well worth the risk.

These are my thoughts and I am sticking with it. However, besides telling me how long this blog entry is - please let me know your thoughts on Auren's blog entry. Go for it!