Startup vs Consulting. What is the best career for you?
Where do you imagine yourself? The image on the left — Looking sharp wearing a suit at a consulting firm or the image on the right — working with a social team & collaborating on building something amazing that makes a difference in the world.
“Should I just get a job after my MBA or should I join a startup?”
I have heard this question multiple times. Mostly from my friends who’re MBAs. And most often than not, the answer is — get a job.
The reason boils down to one key personality trait important to deciding your path ahead. This deciding factor will decide your future & your career — risk.
Are you capable of taking risk?
Don’t get me wrong here. I am biased toward entrepreneurship, and I would love for you to join or found a startup. But, IT HAS TO BE YOUR DECISION.
For comparison, I will consider the best possible job scenario after your MBA which would be getting into a consulting firm, it could be McKinsey, Bain, BCG, Deloitte, PwC or other big firms. At the same time, I would ask you to be realistic with your career, not every MBA gets into these big firms. And not every startup is successful, in fact only 10% of startups are.
Having travelled the startup journey twice in India and the US, been a part of the Techstars startup accelerator, and having explored the MBA route; I can assure you that the two paths are polar opposites. I’ll explain by comparing the two across a few common domains.
Consulting vs Startup
Colleagues
Consulting: Large consulting firms, arguably, have the best hiring process and as a result they hire the best of the best. You can surely meet talented smart individuals, such as yourselves, at these firms.
Startups: When you’re joining or starting a startup, I’d ask you to be very careful and choose ‘who’ you work with before you decide on ‘what’ you want to work on. If you decide on joining a startup, you’ll soon know if the founder is ‘awesome’ (trust me, you’ll know if the founder is awesome)and would again suggest you to stay ONLY if the founder is awesome. If they’re not awesome, they’re bad. There is no in between. But, there’s a good chance they’re awesome.
Investors know this, the first three things they look at before investing are Team. Team, and TEAM!
Learning Curve
Consulting: Since their hiring policies and strategies are the best, you’ll naturally surround yourself with the best individuals. The cream of the crop. And thus, you will be learning from the best. You’ll also go to training schools and you can rest assured, they have the best training facilities.
Startups: Startups are hard! They are fast paced too. The founders will do their best to educate you but, they are busy people and so the learning will come in bits and pieces. You will learn to jump off a building and assemble a plane on the way down. This hard earned education will be engraved & etched into your brain forever!
Risk Factor
Consulting: The risk in joining a consulting firm or most jobs is very low. Usually, most of you who are inclined towards joining a consulting firm do not like taking risks. (But, since you’re reading this and are confused, I feel you have the will to survive).
On the contrary, at a consulting firm, you’d get paid millions to avoid taking risks and for diminishing the risks of your clients. You’ll be advising large corporates and govt. bodies if you reach the partner level status.
Startups: Risky, very risky! I think the word startup is synonymous with the word risk. At a startup, you will have to make a lot of decisions everyday and this will help you learn critical thinking & quick decision making.
Salary
Consulting: At a consulting firm, you’ll earn a great salary. And the benefits that come along will also probably be the best in class.
Startups: Either it is going to go boom or no boom. Your salary & financials will either reach an explosive growth or no growth at all. It’s pretty binary if you ask me. Starting salary at startups is difficult to analyze, some startups (funded ones) pay huge amount while some pay no salary (but pay equity). Salary insights on startup would be a whole new book. All in all I’d like you to understand that you do not join a startup for money, you join it to make an impact, to make a difference, and to make your dent on the world, ultimately making the world a better place.
Work-life balance
Consulting: Pretty much non-existent in the early years. Your organization will demand a lot more work than you can imagine. Your seniors & the organization will constantly pressurize you to work more and more. You will still survive but you won’t know who or what you worked this much for. This is for backend consultant.
If you’re frontend (client facing), you’ll be travelling a lot (imagine yourself in the hangover movie, except the drug is replaced with overdose of stress). You will be tired physically and that will show up on your physique.
Either way the organization will have a lot of expectations from you. You’ll either move up the ladder or move out!
Startups: Definitely harder than consulting. But it will be like a roller coaster ride. At times you’ll feel like you are taking 2x stress than your consultant buddies and at other times you’ll feel light like a feather.
The best part about this stress would be that you know who & what you’re working for. You’ll be pressurized and still have expectations — your own!
Career growth
Consulting: Positional growth in a large consulting firm is pretty much well charted. You’ll rise in ranks from Assistant Consultant to Associate, Junior, Senior, Partner, Senior Partner, to Director of the company. The growth years will also be fixed with rise in hierarchy. All plotted well.
Startups: Positional advancement in startups is almost non-existent. You’ll stay in the same Head of Dept. position if you’re good at your work or else somebody better will be hired above you. No positional growth does not mean no increment in salary. If you and the company perform well your salary will skyrocket and you’ll earn much more than you could have imagined at a consulting firm.
Next Job
Consulting: Depending on the company you join you can go almost anywhere next. You’ll be able to fill in a lot of shoes except that of a startup founder. A startup would not be an ideal job for you since you’re risk-averse. Consulting job will open a lot of doors for you and you can jump between companies. Example a developer jumping from twitter to facebook to microsoft to google and so on. I’m sure you get the idea. But a startup is a big no for you; at least at the initial stages of a startup.
Startups: If (and that’s a big if!), if the startup is successful, you can literally go anywhere. Beyond consultancy. Working at a startup can prepare you to do just about anything at any company. Really. Think about it, what if Jeff Bezos wanted to switch after Amazon’s IPO? What role do you think he would fit in after Amazon.
If the startup is not successful, you can go back to consulting or any other MBA profile job. You don’t lose much except time. No one will care if the startup did not succeed.
Conclusion
In the end it comes down to two deciding factors.
- Whether you can take risks.
It won’t just be your personal risk. You’ll be risking a couple of years to the startup should you choose to pursue the route. You’ll have to risk analyze the s*** out of the situation. How much financial, familial, and personal liabilities can you handle. Think about opportunity cost, how much are you willing to lose to pursue your dream of making a difference.
At a consulting firm there’ll be almost zero risk. Rather you’ll be earning a heavy amount. - How much does your dream matter? (Passion)
No really, even though I am biased towards you joining or founding a startup, I would like you to think of the ‘Why’ first. Why do you want to start the startup? If the answer is to make heck lot of money, sure, you can join or start a startup. There’s no shame in wanting to make more money or desiring to be a billionaire. Its ambitious! But, the real reason to ask yourself the ‘why’ question is to make you realize & understand how passionate you’re in solving that problem or making that much money. Lot of startups fail because they don’t have a clear reason & passion.
At a consulting firm, even though they say they care, nobody cares what your passion is except if it is entertains them. At a consulting firm, you’ll be paid to pursue someone else’s passion, even if you don’t care about it. You don’t get a say in the matter.
If you’re thinking you can join or start a startup after a couple of years of job exp. in the MBA field, you can’t be more wrong! You can ofcourse join a startup but you won’t be able to sustain there. A startup will be very unorganized for your ‘organized’ consultant brain. It’ll be too chaotic!
I do not wish to discourage you from either joining a consulting firm after your MBA or joining/founding a startup. I only wish to present hard facts from my experience to you. And I want you to know that, OPINIONS CAN BE FORCED, DECISIONS CAN’T!
Both experiences will take you places that many would only dream about. And experience always counts. I want you to understand that, I support your decision and I’m happy to help you in any way I can.
