There’s no shortage of online content about our industry.
For obvious reasons, the internet is the first place you and many others look for information when learning about:
- The field
- How it works
- What other product development teams do
- And roles like engineering management
But there’s a problem: most content is written from the perspective of large companies with sprawling teams. So it’ll be little to no help to you or anyone else working in a smaller company.
There’s also an additional problem: defining the terms “large company” and “small company.”
What exactly is a “large” or “small” company?
Unfortunately, terms like “large company” and “small company” are deceiving. For example, a large company can have thousands of workers or less than a hundred. With such a wide range, how do you even begin to define a small one?
Thankfully, there is a better way to explain what to expect from a large company versus a small one, using the differences in how the two operate.
Essential questions to ask include:
- How involved in different parts of the company are some of the key staff members?
- How many revenue streams does the company have?
- How specialized are the projects and teams?
- And how much do they have figured out?
Do they have things figured out?
Larger companies often need to have more figured out.
They need to be more successful, make fewer mistakes, and have a more efficient infrastructure than smaller companies.
This doesn’t always mean they do, but they have some advantages, including:
- Having been around longer, meaning they’ve had time to learn from past mistakes and successes
- Likely more experience in general
- More access to bigger talent pools
- Larger budgets to invest in infrastructure
But smaller companies do have an advantage in at least one area.
How flexibly they react to change
Think about the recent AI boom. Companies scrambled to integrate AI-powered tech into their products and internal infrastructure.
This process usually goes faster in small companies. As soon as one person starts using AI to improve workflow, everyone is using the same tool in a week or so. This is facilitated by how much contact the team has with each other and their lack of administrative resistance to using new tools.
Generally speaking, smaller companies can afford to be less rigid. They’re still figuring out how they want to operate and navigate the field. Since they’re still growing, they’re more agile when designing new solutions to different problems.
Large companies often become harder to change as they scale. They may develop highly refined best practices, which can disincentivize trying something new.
Even when people want to use a new tool, the company may prevent them from doing so until policy gets updated. This likely won’t happen until the company sees a need for it, but even then, everything is slower. Unlike smaller companies, larger ones have entire teams dedicated to regulations and compliance, which is necessary to protect the company from risk.
This impacts other areas, too.
Think about how a company builds software products that interact with its end users. Smaller companies react more quickly to changing user needs and market conditions. Smaller team sizes allow them to make decisions faster and try out new strategies. Top management is also more involved in ground-level processes.
Larger companies do have one major advantage over smaller ones in this area, though. They can recruit new talent with the skills needed to navigate industry changes and provide them with more incentives to accept, such as job security and better pay. Doing this allows them to stay as flexible as smaller companies.
Available resources
It’s no secret larger companies have bigger budgets — smaller companies can’t compete with them there.
I’m not just talking about money, though. People are also a kind of resource, and large companies need more of both. But the more they have of either, the easier it is to get more of each.
This also means smaller companies risk having their top performers poached. Unless the person is invested, the aforementioned higher salaries and better benefits can draw them away. That’s not to mention the attraction of more challenging tasks and working on projects at larger scales.
Another benefit of having a bigger budget is the ability to absorb risk. Larger companies can invest in R&D, try out new tools at scale, and take on more ambitious projects. This keeps them competitive and helps mitigate the impact of more risk-averse behavior and slower policy changes.
Smaller companies can be more flexible when taking on a new project or tool, but they can’t take on too many new things at once. They need to be more selective in their choices and what risks they feel comfortable taking.
Mindset and company culture
Different-sized companies attract different kinds of people.
Larger companies often attract people looking for bigger salaries and career development. Smaller companies draw people with more creativity and entrepreneurial drive. This affects mindset and culture, but so does company structure.
Take leadership style and employees’ sense of independence, for example.
In smaller companies, top-level managers and founders tend to work more hands-on with engineers, building tighter relationships. They may also allow engineers more leeway to work independently.
Larger companies often have more positions overall, especially vertically. This leads to a bigger gap between engineers and top staff. Larger companies also often foster a more official learning culture. They can incentivize learning and development programs like internal courses or certifications.
Smaller companies don’t have the resources for this kind of thing. Instead, they may encourage workers to grow their skills independently. This leads to a more casual but no less driven mindset.
Responsibilities and knowledge
Large companies have more clearly separated roles and responsibilities. Small companies, out of necessity, usually do not.
As a result, employees in smaller companies often wear many hats because there are more roles than people to fill them. For example, CTOs in large companies focus on the big picture. This means taking part in developing long-term company business vision and strategy aligned with technical developments instead of helping with on-the-ground engineering issues.
In small companies, though, they may do both. On the one hand, these kinds of double duties can be stressful. On the other, they give people experience they wouldn’t have access to in a larger company. However, such a situation usually only lasts until the company scales enough to hire more people.
The short version: pick your poison
Large and small companies differ in lots of different ways:
- Their experience with complex processes and workflows
- How flexibly they react to change
- How they allocate resources
- Mindset and company culture
- How responsibilities are divided across teams
Knowing these differences helps you better adapt.
But there’s no right answer about whether working for a large or small company is better. It all depends on what you’re looking for and the experience you want to have at what time, not to mention what your possibilities are at the moment.
So, compare companies, ask around, and do your research. Doing so helps you better adapt to your company and role, whatever either one might be.
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Originally published on Medium.com