When the dot com bubble expanded, so did the number of jobs created by start up companies. Riding a tide of venture capital and the successes of companies that turned idealistic young programmers into millionaires overnight, start up companies that were less than one year old created more that 66 million jobs between 1994-2010, according to a 2012 report from the Bureau of Labor Statistics.
At its height in 1999, these businesses created 4.7 million jobs in a single year, many of them high paying. Then the dot com bubble burst followed fairly closely by the Great Recession and the number of jobs created by start up companies took a nose dive. In 2010, this sector created 2.4 million jobs.
While some might look at these numbers and say the start up is dead, smart career builders should look at the reduction in jobs at start ups as an opportunity.
Opportunity in Loss
When everyone and their brother could find jobs with start up companies, the cache that came with working for a successful start up lost some cache. It’s where bright, innovative college graduates went for internships and to start their careers.
Everyone was doing it. This presented two problems. First, working for a start up didn’t stand out on resumes anymore as an exceptional experience, one larger, more established companies might value.
Secondly, it made finding a job with a promising start up harder. The applicant pool was greater and so these new businesses could afford to be more picky in the people they chose to interview, bring on as interns, or hire.
Now, however, start ups are no longer seen as they next big thing, the job that will launch a thousand opportunities. Many people got caught in the dot com burst, and saw their fortunes and future disappear along with the jobs. Taking a position with a start up now constitutes a bit of a risk.
With this change, though, the two problems associated with working for a start up during the dot com bubble no longer exist. Not everyone is doing it anymore and the applicant pool for start ups has shrunk.
Benefits of a Start Up
Working for a start up company, especially those in their first year of business, still constitutes a risk but the reward can still be great, especially for young people just entering the workforce.
First, young workers might have an easier time breaking in to new companies versus established companies. Established businesses often promote from within and have a very specific profile for the ideal worker. Recent graduates flock to these companies because of their stability and so those companies can afford to be selective.
Joining a start up can present several exciting opportunities, too. They tend to have less hierarchical structures instead promoting flat leadership models and open office plans. This gives young interns or new workers the chance to interact with people with more experience to share.
Another benefit start ups have over more traditional companies is there risk-taking nature. That often extends into hiring decisions with start up owners looking past resumes to the person and an individual’s ability to learn and grow within a company.
It’s true that the numbers of jobs created by start up companies declined in the last decade. The dot com burst and the Great Recession saw to that. However, start up companies still hold great potential for the young workers looking to break in at the ground level and do exciting, innovative work, engaging at the forefront of the business world.