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What makes a startup, statistically?

Reuters/Shannon Stapleton
Which startup stereotypes hold true?
By Max Nisen
Published Last updated This article is more than 2 years old.

The word “startup” evokes an image of a bunch of highly-paid twenty-somethings, long on technology skills, and short on loyalty.

But how true is the stereotype of the startup?

Using an dataset of more than 20,000 employee profiles compiled by data scientists at Namely, a global HR and payroll platform for growing companies, we now have a closer look on a statistical level at the key differences between startups and older companies—who works for them, what they get paid, and how long they stick around.

The data distinguishes a startup as a company that is venture funded and less than 10 years old. Of the total, 37% are from startups, 63% aren’t. The majority are in the US—particularly in New York, where Namely is based—though 41% are outside the US.

The pay question

Yes, folks working at startups make more. This may reflect the extremely high concentration of startups in competitive labor markets in the Bay Area and New York City. But the gap with tech is huge, across several job types.

The tech side sees the largest gap, probably because a tech employee at a startup is much more likely to be a software developer than to work in IT support.

Salaries are substantially higher across the board, but perhaps the more surprising thing is how much more people in sales make. It might be that startup sales, getting people to adopt a product form a tiny new company is a particularly specialized skill with a limited number of practitioners in high demand.

The age gap

Startups tend to have a more people in their early- and mid-20s. More than half of startup employees are below 30, compared to 42% at non-startups.

There’s a much longer tail of ages at non-startups as well: 22.1% of their employees are over 40, compared to 15.8% at startups.

Job hopping

The data is skewed a bit by the fact that many of the companies categorized as startups are just a few years old, but the average employee at a startup has been there for a very short time.

On average, more than half of the employees of a startup have been there for less than a year. The average tenure at a startup is 10.8 months, versus almost a year and a half (17.5 months) at a non-startup.

Who does what?

Unsurprisingly, there are dramatically more tech employees at startups, and a higher proportion of sales employees as well.

The “other” section is so large because it includes profiles of people who have been recently hired, or haven’t had their profiles completely filled out for another reason. Other employees who defy easy categorizations, interns for example, might end up in that group as well.

The outsize number of “creative” employees in the non-startup bucket might have something to do with the particular composition of this dataset: since a disproportionate number of Namely’s clients are in New York, there’s some over-representation of advertising, design, and other firms that do a lot of creative work.

The gender divide

The technology industry has a gender problem. The numbers released by big companies like Google, Apple, and Facebook show that men have a substantial majority in leadership and technical jobs. It would appear the same is true for startups.

The greater technology intensity of startups shows up in the gender breakdown–there are substantially more men than women in both cases, but particularly for startups.

A further breakdown shows a huge divide at startups. More than 80% of technology employees are men, by far the biggest differential:

Non-startups also have a gap in technology, but it’s substantially smaller. Beyond that, the gender split is pretty similar between the two types of company.

Namely’s data confirms a lot of the assumptions we make about startups. But it raises a number of questions. What are the consequences of employing lots of young employees who seem primed to jump to the next opportunity? Why are startups paying so much more for finance and sales employees? And perhaps most worrying: why does the gender gap remain so acute?

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