One of the benefits of going to business school is that a lot of very successful people come to campus and speak about their careers and the real estate business in general. They also offer career advice if you get a one-on-one opportunity to ask them for it. I was lucky in that I listened to and met with many of these CRE stars, and I always took notes furiously to make sure that I wouldn’t forget the lessons and pearls of wisdom being offered.
I unearthed my notes the other day and thought that it would make a great series in the blog, which we are calling Wise Words. To protect the innocent, I will not identify the source of the wisdom/advice.
Note: Not everything is earth-shatteringly brilliant or insightful, but everything is informed by decades of experience, and there is significant value in that alone.
Here goes with the first installment: Career Advice: Joining A Small Company When Coming Out of Graduate School
Risks of joining a small company:
- not enough deal flow
- will you get along with them? The success of working in a small company depends on getting along with the people, especially the principal
- if it blows up, where does that leave you? (vs. having a big brand firm name on your resume)
Benefits of joining a small company:
- you will learn a lot about a lot of facets of the business, and you can make a noticeable impact right away
- typically more exciting than working for a company with hundreds or thousands of employees
- fewer competitors internally for eventually being granted equity in deals.
Thoughts? Additions?
Hey Bruce, I love the idea of the ‘Wise Words’ series. This first topic is something that I often think about. I’ve always been a fan of working for a small company for many of the reasons you mentioned above; especially the ability to learn about all facets of the business. I think the experience you get from a small company is great for aspiring entrepreneurs such as myself.
However, if you want to climb the corporate ladder, there is definitely a lot of value in getting institutional-quality experience.
There’s a lot of trade-offs, but I think it boils down to what you aspire to.
Hi Joe, thanks for the feedback. I am excited to offer these insights to everyone — at the end of the day, everyone wants to be in a great job that is challenging and intellectually stimulating, and everyone wants to avoid whatever mistakes possible. I hope that the future installments help folks think through things, whether on the career or investment front, with a little more perspective.
I’ve worked for mostly small companies the 5 years I’ve been out of school, and have been lucky to get valuable experience. The advantage has been getting a broad range of experience – with small companies you usually get a lot more exposure to financing, asset management and operations (prop mgmt) that really does come in handy when analyzing an investment beyond what the spreadsheet says.
With that said, directly out of college if you can get any type of “front office” work for a large investor, TAKE IT. Just the amount of deal flow and modeling/analysis experience is worth staying 2-3 years. Having worked on 2B in closed acquisitions is great on a resume. You usually get paid more too.
I think ultimately it boils down to the job description. Would you rather acquire and develop for a smaller company or be a loan processor for Prudential?
Hi, thank you very much for your feedback! It’s such a tough decision, but it reminds me of a funny story. A young soon-to-be college grad once called me asking for job advice. It was during the depths of this past recession and he had not one but TWO great job offers. The nature of the work was slightly different — different enough to warrant some gnashing of teeth.
He asked me which one he should take, and I asked him, well, what’s the most important thing you want to get out of the job? He replied, “Exit opportunities” — I broke out into laughter. Here he is, 21 years old, and hasn’t even graduated from college yet, let alone spent a day on the job, and he’s already giving himself his NEXT job. Hilarious.
Here is a response I got over email. Some great points made here.
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Enjoy these installments….this one prompted me to respond.
I almost always encourage young job seekers in the development world to focus on larger companies. First, big companies tend to be more willing/interested in hiring entry level employees, mostly because they simply hire more people, but also because smaller companies tend to be more risk averse about hiring inexperienced talent. Some larger development companies often hire entire “classes” of young employees with the hopes that a few will work out for them. I like those odds.
Second, larger companies tend to have a more disciplined approach to development, meaning that they have instituted systems to ensure that everyone is working toward the same ends. Having worked for a large publicly traded development company early in my career, I am very glad to have had this exposure to a disciplined approach to development. While it certainly stifled innovation and creativity, it did help insulate the company from risk. When I worked for smaller companies later in my career, it was very helpful to have that sense of discipline even when we were working on new and innovative projects, as it really helped to assess relative risk.
Third, I think there is sometimes a danger with a small company that the owner(s) will decide to take a step back and go into a status quo management approach and not pursue new deals. Nothing wrong with this from a business perspective, but it doesn’t provide a lot of opportunity for learning. This never happened to me, fortunately, but I know people who kind of got stuck at a place that wasn’t doing anything new or exciting.
Those are my thoughts, for whatever they’re worth!
This is so very true. I did an internship with a small firm which was an excellent experience with learning and actually all three of the benefit points above being present.
Though when it was over, I went against my gut decision to leave, and instead accepted a position with the firm.
The reality set in that there was very little to do (I wasn’t there on a daily basis as an intern) as well as very little compensation and I grew frustrated there as its very important for me to see my contribution to the total effort.
I did after two months and after more frustration and straining relationships with some actual great folks (the principals are very good guys). I am now pursuing a position with a big firm, and am taking that lesson with me. I’m sticking with my gut moving forward.
It has been more than 25 years since I worked for The Irvine Company (developer of master planned communities on the once 93,000-acre Irvine Ranch in Southern California.) Even after all these years, people continue to introduce me saying that I once worked for this firm. So, I think that speaks to the power of being associated with a well-know and well-regarded firm–as long as you enjoy what you are doing and get the right work exposure while there.
Hi Pike, thank you very much for the comment. I agree with you, having a platinum brand on your resume (and the knowledge and experience that you gain from working there) is invaluable. But there’s always the temptation to join who you think will be the next “Irvine Company” while they are still small. That’s what makes this such a tough decision for many.