Auguest 7, 2012
by Julianna Davies
Astia Guest Blogger, Julianna Davies is a researcher and writer for the online MBA resource, http://www.mbaonline.com. She suggests that instead of looking to larger and more established corporations, recent MBA graduates set their sights on the startup community in order to find positions with growth potential and plenty of learning opportunities. Julianna picks up on a theme mentioned on Astia’s blog, namely that startups allow for more freedom for their founders to develop the skills they need to succeed.
Though the economic conditions in the United States and throughout the world seem to be slowly on the uptick, job security for new professionals remains quite uncertain. Students who flocked to Master of Business Administration programs years ago in hopes of landing a high paying corporate job are increasingly finding closed doors: even top-performing companies have largely clamped down on hiring, leaving many wondering how to pay off their student loans.
The answer, at least for some, may lie in startups. Startups are traditionally less secure than long-standing businesses, and the pay is often a lot lower to start. A growing body of evidence suggests that entrepreneurial ventures are the way of the future, however, which means that jumping on board now may actually be the smartest thing an MBA graduate can do.
According to a number of scholars, job growth is actually more secure in the somewhat unpredictable start-up environment than in traditional businesses and corporations. A 2010 report by the Kauffman Foundation, The Importance of Startups in Job Creation and Job Destruction, claimed that startups are some of the only opportunities for job growth in the modern United States. Larger corporations are hiring, of course. According to the report, they are not actually creating new jobs, though—they are maintaining their status quo by only hiring to match losses due to resignations or retirements. In many cases, the study found, many businesses are cutting jobs by only filling a percentage of their available slots.
“The study reveals that, both on average and for all but seven years between 1977 and 2005, existing firms are net job destroyers, losing 1 million jobs net combined per year. By contrast, in their first year, new firms add an average of 3 million jobs,” the Foundation said in its official summary of the findings.
Much of this job creation is owed to the ethos associated with most startups. A startup typically begins with an idea and a small group of dedicated entrepreneurs committed to bringing it to life. The company grows almost organically, expanding as needed to meet changing goals and to keep up with demand. The culture is usually profoundly different from larger, more established corporations.
“The larger and more successful the company, the more challenging it is to innovate, not only because of bureaucracy, but also because of a perceived fear of failure,” Gary Shapiro, CEO of the Consumer Electronics Association, a technology advocacy group, told Forbes. “Great innovation drives the most successful companies, from old-line companies that innovate their turnaround, such as Ford, to new generation companies that innovate to lead entirely new categories, such as Google,” Shapiro said.
The focus on innovation and creativity is attracting a whole new crop of graduates, many from the top schools. Organizations like Harvard University host start-up career fairs, where students can network and learn about career opportunities in a variety of small business settings. Internships are also exploding in popularity, enabling students to get a taste of life in the startup world while still in school.
While job security is important, most MBAs and other recent graduates flock to startups not for the paycheck, but rather to be a part of something bigger. “I feel like I’m a problem solver,” Daniel Shani, a 2012 MBA graduate from the University of Chicago Booth School, told the Chicago Sun-Times. “Entrepreneurs first and foremost are looking to solve a problem. They’re much less drawn to the dream of glory and fame. It’s really not about the money. I really would like to make a difference in the world,” he said.
Shani was one of several Chicago graduates to forego high-paying corporate work in favor of following their dreams—or just keeping more control of their careers. There is traditionally much more space to share ideas and be creative in entrepreneurial settings, and the work environment is often much more casual and laid-back.
There are trade-offs, however. “You need to be OK with rapid change, not having a clear road map, not having a management program,” Scott LaChapelle, assistant director of technology platforms and new employer development at Harvard University's Office of Career Services, said of startup opportunities. “You need to be OK with the fact that your job description, if there even is one, may change as well.”
Not everyone is well-suited for life in the world of startups. For those with business savvy who appreciate innovation, creativity, and positive change, however, there might be nothing better than trading in a suit for a slot on a small team of driven workers. The opportunities in this sector are only slated to grow, and job security—though never guaranteed—seems increasingly more promising for people with ideas to share with the world.