Corporate vs startup mindset: which is better?

What is a mindset in business?

A mindset is a set of beliefs that are grown and shaped by your experiences as a person. It then dictates how you make sense of what's going on around you, the choices you make and how you make them. Mindsets in business are a way of thinking that enables you to see problems as opportunities and use those opportunities to grow.

As different as the corporate world is to the startup environment, individuals coming from these backgrounds will also bring with them two different mindsets. It is hotly contested as to which of the two is better for startups. The answer isn’t all that obvious, but the best place to start is to understand the benefits and challenges that come from both of these mindsets.

Corporate mindset: benefits and challenges

Benefits

A corporate mindset can bring structure and process to the startup environment. As Erin Living’s co-founders, Anthony Mazzei and Thomas Walkley, stated, “If the personality is right, what they learn in a corporate environment is good for the startup space.” 

As well as an internal understanding of best practices, individuals with a corporate mindset often come with exceptional stakeholder management skills. They can also be empathetic with corporate clients. As Ben Smit from Teamgage summed it up nicely, “We like to have people with corporate backgrounds. We’re selling to corporations, so they provide insight into what corporate frustration exists.” 

The consensus from founders is that when the personality is the right fit, a corporate mindset brings to the table a level of experience and knowledge that is invaluable to the growth of a startup.

Challenges

On the flip side, Robin Sands at Link4 pointed out that corporate employees often “expect that everything is set up, that the company will be able to afford the actions they want to implement financially, and their sense of urgency is often less than that of their startup counterparts.” 

Typically, the corporate mindset also brings with it a high level of risk aversion and resistance to change. While this is not a negative thing in itself, it can have an adverse impact on a startup as the fast pace and dynamic nature of such an environment requires agility and adaptability.

Startup mindset: benefits and challenges

Benefits

The ability of those with a startup mindset to recognise and understand the nature of the business they are in is a major benefit. Founders such as Matt Mills from Boulevard recognised that those with existing startup experience have a greater ability to take initiative and cope with ambiguity. He stated that team member’s “exposure to previous startups is a plus as they already know what they’re getting into”.

As one's mindset evolves from the culmination of their experiences, the startup mentality spawns from the challenges and opportunities presented by its fast-paced, ambiguous environment. Those who have worked in a startup before are seen as “doing a better job at rolling with the punches and integrating into the culture”. It is believed that they’re an embodiment of open-mindedness, often transitioning more easily into another startup, regardless of the industry.

Challenges

While prior experience working at a startup has its benefits, those with a startup mindset are often too willing to throw caution to the wind in an attempt to get the job done. While taking calculated risks is important to a startup, so too is knowing when due diligence is necessary. The experience and knowledge required to tread that fine line may be an arrow missing from the quiver of a startup-minded individual.

Corporate vs startup mindset: which is best? 

At the end of the day, neither a corporate nor a startup mindset alone will help create a sustainable, successful business. A well-balanced team should come from a mix of backgrounds. This will bring a diversity of thought young businesses so often need to break through. Jaco Veldsman, co-founder of Paytron, said, “You need to have a good mix to get the balance right.” The aim of every founder should be to hire team members who can complement one another. Those with corporate experience can help their startup counterparts recognise the value of structure, processes and calculated risks; while those from a startup background can ensure the startup retains the level of agility and adaptability it needs to survive in the early days.

Many founders believe that mindsets can change over time, as long as the team’s mutual goal is growth. It was flagged, however, that one of the biggest challenges most founders face is implementing an effective onboarding process. Statistically speaking, 20% of turnover happens within the first 45 days, which, no matter the mindset of your employees, is bound to have a negative effect on the success of your team and your business.

How to help corporate-minded employees adapt

Having recognised the importance of a diverse team, founders should have a process in place to help those coming from a corporate background transition faster and more easily.

You can start by acknowledging the challenges they face, such as:

• lack of process and role definition
• resource constraints
• continual change and repositioning
• no onboarding process.

Then communicate and highlight the opportunities presented to them through working at a startup, such as:

• the excitement that comes with challenging the status quo
• the fulfilment of making a difference
• opportunities to learn new skills
• a flat structure that allows them to work autonomously and take accountability for their own work.