Tech Startup vs. Established Organization: What Type of Company is Right for Me?

Professionals seeking jobs in software engineering, data science, AI, product development, and other tech fields have traditionally had a more seamless job search experience than those looking for positions in other industries. Why? Because the tech industry just keeps growing. In 2022 alone, companies across sectors opened up nearly 300,000 new tech roles, creating countless opportunities for tech professionals to capitalize on the demand.

While some tech-based job seekers consider this growing demand for their skills exciting, many find multiple possible paths forward less than ideal. This is because, when faced with too many options, many professionals freeze under the pressure of making the right decision, and end up making rash or uneducated choices rather than figuring out what they really want.

To combat this, top career experts suggest exploring different paths a career in your field might take before beginning the job hunt.

For most tech professionals, this means deciding what kind of industry you ultimately want to work in, which includes determining if you’re going to work in a tech role within a tech company or apply your tech skills to another field like healthcare, manufacturing, or insurance. It’s also important to consider the size and maturity of the company you want to work for, which would include deciding between taking a role at a small and scrappy tech startup or an established, well-funded organization.

In this article, we uncover the key factors that define typical startups and established organizations to help you determine which might be the best fit for you.

Six Key Differences Between a Tech Startup and an Established Organization

According to experts, a company that has been in business for no more than three to five years falls into the category of a startup. As such, all other companies are grouped into the established organizations bucket.

Traditionally, startups have a reputation for being trendy. They often occupy modern office spaces, offer employees an array of perks like on-tap cold brew and ping pong tables in conference rooms, and tend to attract youthful workers looking to gain a variety of different experiences that can help kickstart their careers.

Generalizing the typical work experience at an established organization is more challenging because these companies range drastically in a variety of defining aspects, including number of employees, years of operation, and overall type of work. However, certain aspects of working for an established organization—like career stability, growth opportunities, and general employee support—consistently draw talented job seekers to these roles.

If you’re having a hard time deciding which path is right for you, read on to explore the six most significant differences between working for a tech startup and an established organization.

Difference #1: Company Size

Data from the last five years shows that the typical startup company has an average of four employees, whereas established organizations can range from under 100 employees to over 2,000.

Differences in size create very distinct work environments, which appeal to different job seekers depending on their preferences.

For example, a small number of startup employees means employees will often share responsibilities across functions. In one startup, a tech professional might work on a variety of different tech-related projects. At another, they may be asked to dabble in tasks outside of the tech sphere entirely, such as sales, client training, contract negotiations, and customer service.

For professionals just starting their careers and looking to gain a variety of experiences, a setup like this might be an ideal fit. However, being asked to work on projects outside of their typical scope might be less appealing for those who have already specialized in their field.

Company size can also impact the amount and type of support you receive as an employee. Established organizations are more likely to have a clear-cut company structure that includes entire departments designed to support their work and employee experiences. From in-house stakeholder experts to whole teams dedicated to Human Resources, established companies understand the value of investing time and resources in internal support.

For Example: Central’s HR team consistently works to improve the employee experience. Over the past year, this team developed and rolled out an industry-leading paid leave package that’s more generous than 75% of top tech companies. They also launched a program that provides company-sponsored access to mental health support for employees. Smaller companies without a trained, dedicated team like this may be unable to make such large and consistent investments in these critical employee benefits.

Difference #2: Access to Resources

Tech startups are known for staying on top of trends and aspiring to provide a modern employee work experience. Though many manage to fulfill this promise, it’s important for tech professionals considering their options to remember a startup budget doesn’t always allow for consistent upgrades or the latest solutions.

At the core, tech startups are still new small businesses and must prioritize spending money on products and tools to keep the company functioning.

Tech professionals looking to get their hands on the most cutting-edge equipment might instead turn to more established organizations with dedicated budgets for these resources.

For Example: Central goes above and beyond to invest in the people, space, and tools our tech teams need to excel. We’re building a modern workspace in Dublin, Ohio, that features a unique layout and the equipment our current tech teams need to thrive in their roles. The new office also includes enough space to house the 60+ tech employees we plan to add to our team by the end of 2026.

Difference #3: Mentorship & Growth Opportunities

Today, more employees value an investment in their growth and development than ever before. 87% of millennials say it is very important that their employers invest in mentorship.

Unfortunately, many tech startups don’t have the luxury of investing in such efforts. These organizations—which boast agile teams and fast-paced work environments—often have to prioritize other goals in the early stages of their business launch, leaving little time and resources for mentorship.

If mentorship and career nurturing are important to you, consider taking a role at a larger, more established organization instead. These corporations typically have well-designed mentorship programs dedicated to helping employees garner the skills to grow within their roles and fields.

Did You Know: As of 2022, an average of 63.5% of organizations use mentoring to help meet their talent goals, and 92% of Fortune 500 companies included a formal mentorship program as part of their employee benefits package.

Difference #4: Opportunities for Innovation

Tech startups are often considered hubs of innovation. Products and services that come out of these companies can be some of the most cutting-edge and often end up revolutionizing industries. If you are a creative, out-of-the-box thinker with an array of tech skills, you may thrive in a startup culture that values new ideas and focuses on staying ahead of the curve.

At established organizations, opportunities for innovation may be harder to find. Often these companies have a tech stack that works for them and hire experts with the skills to maintain or iterate upon existing structures. This is not to say that these companies never need work done for a product upgrade or redesign, but historically, opportunities to lead innovation have been less frequent in established organizations than in tech startups.

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With nearly every industry focused on modernization, this is rapidly changing. Companies across all industries are dedicated to meeting the evolving needs of their customers. In response, they are building tech teams that can overhaul their existing products or help develop new ones from scratch.

This is the case at Central Insurance. Our tech teams function like a startup. They are constantly developing new ideas, iterating on existing tech, and implementing cutting-edge approaches to take our in-house tech stack to the next level. Having a team with the agile abilities of a startup combined with the backing of an almost 150-year-old organization provides our tech professionals with the funding and overall support they would rarely find elsewhere.

Difference #5: Opportunities for Ownership

The chance to have a significant, personal impact on the product or system you’re working on is known as “ownership” within the tech space. Many tech professionals are drawn to roles that allow them to make these significant contributions by having a voice in the room and a stake in the success of their work.

Much of the success startups experience can be credited to the ownership mindset of their employees. When employees feel they directly impact the business, they share a vested interest in the outcomes. For tech startups specifically—where employees in the most technical positions can make perhaps the most substantial impact on the work—that feeling of ownership becomes even more prevalent.

On the other hand, huge tech companies like Google, Microsoft, Amazon, or Meta employ so many tech experts across so many divisions it’s less common for an individual to feel that same level of ownership in their work.

Between startups and “big tech” companies are those like Central. While larger in scale, Central consciously chooses to empower employees at every level through ownership.

“If you’re looking for a job where someone will tell you what to do and how to do it, Central probably isn’t the place for you. But if you feel energized by the opportunity to take something from inspiration to ideation to implementation, you’ll thrive as part of our IT team.” – Central Insurance

Difference #6: Stability

There’s no denying the make-or-break excitement of working for a tech startup. Knowing your work contributes to whether the company survives to see the next fiscal year can be empowering, and is often enough to draw talented tech professionals to these roles.

Though you may not experience that same thrill working in an established organization, you will enjoy a stronger sense of career stability. Unfortunately, more startups fail than succeed, with tech startups more likely to close their doors within the first five years than startups in other industries.

For that reason, tech professionals who value job security may find a role at a more established organization to be a better fit.

The Unique Job Market in 2023: What to Take Into Account When Choosing A Role

Until this year, choosing to work for an established tech company rather than a startup has been considered the “safer” choice in terms of job security. Yet drastic inflation rates and a looming recession have led even “big tech” companies to cut costs to remain profitable. As a result, there have been over 150,000 layoffs across these companies since January 2023, leading to general vulnerability and unease for tech professionals at all levels and stages of their careers.

Since these previously in-demand professionals can no longer rely on consistent job opportunities at large organizations, they are beginning to evaluate their options—and finding companies like Central to be the ideal solution.

The Draw of Tech Jobs at Established, Non-Tech Companies

Working in a tech role within a non-tech industry is one of the safest choices a tech professional can make in today’s job market. With tech now an essential component of work in almost every field, there are many meaningful and exciting job opportunities for tech professionals within these organizations.

Consider This: Healthcare, transportation, education, retail, entertainment, financial services, and insurance companies all need technical support from experienced professionals, making them key industries to target when looking for a tech job at a non-tech company.

Tech roles at non-tech companies offer more than job security, however. In many cases, they provide the exact combination of the factors most tech professionals seek.

At Central, our tech team is big enough to allow tech experts to specialize in their preferred areas of expertise and lean on a solid company structure for support and mentorship. We’re also small enough for employees to truly own their work. Central values innovation and is constantly working to modernize our products like a startup, with the budget and profit model required to invest in the people, resources, and spaces to do it right. Landing a role in an industry like insurance—in which success isn’t dependent on the ups and downs of the economy—helps ensure the stability of your employment even in the most uncertain times.

Making an Informed Career Move

Despite the current unstable economy and layoffs at big tech companies, 2023 is still a very exciting time for tech professionals looking to make a career move. Companies across industries are hiring. Now that you have the information you need to make an informed decision about your career, you can leverage the job market effectively to find what you want in a role.

Remember, some of the most rewarding opportunities out there today fall outside the typical tech startups and big tech companies.

Still not sure whether a role at a tech startup or an established organization is right for you? Download our free, seven-question quiz to help guide your decision-making.