Feedback is more important in startups than in big companies.

It’s easy to underestimate feedback in startups. Everyone is so busy, already spends lots of time together, and good feedback is hard. It often gets deprioritised.

I work with teams in Singapore, the US, and the UK, which have vastly different feedback cultures, and my success hinges on lots of people with varying experience and seniority. This has forced me to appreciate feedback.

Feedback is, purely selfishly, disproportionately important for people in startups. Here’s why.

Startups

In startups, the success of everyone involved is usually highly correlated.

For people with high opportunity cost, startups often aren’t worth doing if they don’t work. It’s worth finding out if you can build something yourself but, if you find out you can’t, your returns diminish fast. More often than not, you’ll make more money, have more impact, and learn more by getting a good job.

This is especially true for non founder employees, whose relatively small equity stakes, reduced accountability, and lower levels of visibility don’t justify sticking it out in all but the best cases. Interning at a startup that dies looks much worse than starting one.

On the other hand, if it works well, a startup can be extraordinarily worth it. Founders can get wealthy and create the future they want to exist. Employees can make decent money, have amazing experiences, and leapfrog normal careers. The success of a startup develops everyone involved.

For investors, things are more complicated: what is good for the founders might not be good for them. But, in general, if the investors are happy, the founders and team will be.

This is why, in startups, the success of the company, investors, and employees are usually well correlated. Each individual in a startup is broadly dependent on the startup’s success to make it a success for themselves. You win or lose together.

How well your colleagues perform, and whether they succeed at their jobs, should be really important to you. Usually, the best strategy to improve your own outcome is to do things that improve everyone else’s.

Big companies

This isn’t true in big companies. In big companies, the success of everyone involved is often uncorrelated.

Compare answers to ‘what makes an employee succeed?’ with ‘what makes the company succeed?’ in big companies. The bigger the company, the less likely they are to be the same. Success for big companies is often too complex to have a clear, practical connection to their employees’ jobs.

Instead, you have your own specific trajectory within the company. To succeed, most likely, there is some amount of competency you have to publicly display, politics you have to invest in, and time that has to pass. If you’re ambitious, you’ll focus on these things, and they’ll make you succeed. But they won’t make the company succeed. If these are your priorities in a startup, your startup will soon be dead.

Nevermind the company, though. Scarily, your colleagues’ success could even affect you negatively. It’s not a corporate ladder, it’s a pyramid. High performing colleagues create less opportunities for you to climb. The better they perform, the harder it is for you to reach the top. Alarmingly, your incentive is often for your colleagues to fail.

Unlike in startups, your success doesn’t imply company success, and the success of your colleagues doesn’t imply yours.

Growth

Startups get around these problems by growing.

In startups, the company succeeding is a prerequisite for your success. If you can’t be successful without the company succeeding, and right now it’s not successful, you need to make it successful. To make the company successful, usually you need to make it grow.

Growth is good: it creates space for you to move into that didn’t exist before. A startup that’s growing fast feels like bubblegum that’s being stretched. To stop it bursting you need to fill the gaps in every direction.

But for the company to grow you need your peers to succeed – by definition growth means you can’t do it alone. You can stretch, but sooner or later you need more gum to blow bigger bubbles. In startups, the best strategy to make yourself succeed is to make sure your peers succeed.

It’s impossible for big companies to use growth this way. It’s harder to get bigger the bigger you get: you need bigger and bigger absolute numbers to maintain the same growth rate.

Soon, you have shift from focusing on growing through increasing sales, to growing through increasing margins on the sales you have. The first creates space for people, the second takes it away.

Do it

Real feedback doesn’t pay in almost any other field, so it feels strange at first. You’re used to being uncorrelated, but now you’re not. Now, you must do it.

Feedback shows your team how to get better. Good feedback acknowledges no one wants to do a bad job; is ruthlessly honest anyway; and inspires change in the receiver.

In startups, your team’s success is your success and you win or lose together. This makes feedback an obligation, not a choice. It’s not just for the person you give it to. It’s for you.

At Entrepreneur First, one of our company values is ‘push each other to greatness’. Feedback is how you push.

Thanks to the EF team for reading drafts of this. If you want to be pushed to greatness, start here.