Making the Switch from a Corporate Career to Entrepreneurship
Since my teenage years I wanted to build a business. The term “startup” is very new to me. I started my career as a freelancer. When I started my career in tech, stories about Google and Amazon were nothing short of an amazing dream. I was already organising sponsored school and college events before starting my career. I made the switch from a corporate grind to entrepreneurship because I’m a creator at heart. For me, this meant the intersection of two things I’m passionate about — food and technology.
You’ve heard stories of having to let go of certainty of a paycheck and learning to do things on your own. But this is the obvious stuff. It’s obvious because chances are you aren’t going to have the resources like you did in your corporate career. Even if your business plan (on paper) is well funded you’re still going to have to watch the cash burn rate like a hawk.
I’ll be discussing my personal experience in making the switch from a corporate career
In this game you only have 2 critical resources, time and money. Each is a finite resource for the goal you’ve set out to achieve. When I started my entrepreneurship journey I gave myself 6 months to prove the concept and make it work. That’s how long it used to take for new product launches in my corporate career. This was a major miscalculation on my part. No matter how long you think it will take, multiply it by a factor of 2x or 3x. I had read stories of how other companies had scaled fast to establish a market share. But in doing so I hadn’t quite worked out that the preparation period is seldom spoken of in popular media. For me, it was part optimism and part underestimation of how long it takes to go through the experiments. It takes a while before you have a full picture of what’s happening with your business.
That said, you’ve got to time your journey. Timing your journey implies ensuring you have skills, connections and resources. Spend the time in your corporate career to tick off these 3 boxes. Figure out how long a runway you have before you have to call it a day and come back to fight another day. I won’t mince words and try to glorify the path of an entrepreneur but it is brutal. You’ll have good days interspersed with bad days. The bad days aren’t like “you missed a sales target” bad. They’re bad in the way that things aren’t working and you don’t know why and you don’t know how to fix it. Yeah, it’s a pretty scary place to be.
I mentioned earlier that learning to do things on your own is important. But you’ll soon realise that there’s so much to do that you’ll need more brain and man power. It can be overwhelming because everything seems important all the time. And you’ll end up trying to stretch time till it snaps in half. Hence why you hear stories of people pulling 70–80 hour weeks. But you won’t last very long carrying on like this. You must learn to work “on” the business as much as you want to work “in” it. In the early days you’ll be doing both. You might wield the CEO title with pride but when the company valuation is lower than your last paycheck even a janitorial job can’t be beyond you. You have to approach it with humility and prepare to learn from failures along the way. having a growth and learning mindset is very important. Otherwise you’ll find yourself repeating the same mistakes again and again. Resourcefulness is another great skill to have.
Resourcefulness is your ability to convince others to invest their time and social capital. It doesn’t always translate to creating massive opportunities out of nothing. In my view, this does not happen because you do have to trade either time or money to make it happen.
Before leaving my last job I realised I lacked a network I could rely on for advice, contacts and general help. So I started meeting people who had a much better grasp of building businesses. Make sure you don’t end up building a hut in the woods. Surround yourself with people who see your viewpoint or will atleast help you refine it. Your corporate colleagues should be able to assist with specialised advice. Most likely they will not have gone through what you’re about to experience i.e. starting from zero. I find my ex-colleagues’ advice useful in areas they specialise in. But there will be times when their advice won’t translate and you need to decide whether it is right for you.
Some types of business will need specialist or domain/knowledge which you must have. There are so many variables to work with that if you try to learn everything on the job, progress will suffer. I understood supply chain management and some tech. I took a product management course at General Assembly. This proved very useful in product-feature decision making. Spend time learning while you still have the safety of a paycheck. Education rarely goes to waste.
I touched on seeking advice but you have to let go off the notion that you’re an expert. There will be a lot of things you don’t know and they can’t even be learnt from books, seminars and courses. in times like these it pays to have good advisors whose experience you can lean on. There is no shame in asking for help or saying “I don’t know”. Unless you acknowledge what you don’t know, you can’t learn. Your advisors are not opinion leaders. They’re people like you who some day went through the same journey you are on now. Most people are more than happy to share their knowledge and experience with you. Learn what you can from conversations and by posing scenario based questions. But, you also need to work out whether what you hear applies your business. The ability to interpret and put in place the knowledge you’ve gained will set you apart from others.
No two business are exactly the same. Even if the business model looks the same on paper, the people who run them are different. You need to remember this when you take advice onboard.
Spending time vs money
It’s tempting, when you bootstrap a business, to spend time instead of spending money. Money can be recovered, time can’t, so check the spend and the return you get for it. That said, spending money when you very well could have spent the time to do so isn’t going to help you either.
This is a tricky equation and what worked for me was to put a dollar value on my time. If the $/hr spend was lower than what my wages were at the previous job it’s a worthy candidate to farm out.
You need time to think and this should be uninterrupted time. In such situations it’s best to pay someone to do the tasks for you. For instance I’ve engaged agencies to do the work I couldn’t have learned in the time I had on hand.
A business partner or co-founder is not someone you bump into one day. It takes time to find the right person. You’re going to spend a lot of time in close proximity. You’d best vet them before committing to a long-term journey. You could do this by working on a probationary basis where if it works out you sign an agreement and if not you move on. You’re not going to know everything or have the time to do everything. So it’s best bring on someone who complements your skillset. If you’re a product person then bring on a marketer. If you’re tehnical then bring on a business development person. Convincing someone to come onboard can be a challenge in itself. Take small steps before asking them to “marry” you. Work on a small project before you turn it into a life-long relationship.
When it comes to splitting equity with a cofounder my initial view was to not dilute the equity as far as possible. But then you’ve got to think of the mission too. Do you win as Rambo or Seal Team 6? Do you want to win at all? Yet, equity split is a reflection on the amount of effort that’s put in. For instance, if you’re building a tech company, you’ll need a developer, a designer and a business development person. That’s already a 1/3 equity split assuming each one puts in as much effort as the others. 50/50 splits don’t work out too well. Unless the decision making and areas of responsibility are split accordingly. There needs to be a process for objective decision making in place. If you’re always at odds with your co-founder it’s unlikely things will sort themselves out.
Taking the plunge from a safe job is a very difficult decision. Don’t rush it and definitely don’t do it to appear cool. Take your time to line up your ducks in a row before taking the leap of faith. It’s not a race after all. I’m not sure what is harder, taking the first step as an entrepreneur or being petrified as you freefall towards the ground. I’ve been a thrill-seeker so I prefer the free-fall.
Wish you the very best for your transition and journey. Feel free to reach out if you want to chat about the experience.