Big Companies vs. Startups

Source: https://danluu.com/startup-tradeoffs/ Author: Dan Luu Date: 2024-07-04

Summary

Dan Luu’s empirical analysis of the big company vs. startup tradeoff. Argues the conventional wisdom (startups are more rewarding/impactful) is often wrong, especially for engineers without equity upside.

Key Claims

• Expected value: most startup equity is worth zero. Big company RSUs are near-certain value.
• Learning: big companies often have more specialized learning opportunities; startups have breadth but often less depth.
• Impact myth: individual engineers at large companies can have enormous impact; startups often have more organizational politics.
• The exceptions: founder equity at very early stage startups (before series A) has genuinely different risk/reward than employee equity.

Concepts

• Career/compensation essay; marginally relevant to decisions about working on AI at big labs vs. startups