I hear many executives and professionals in large corporations talking about their dream of jumping ship, and starting their own company. What they don't realize is that the longer they wait, the more big-company habits they are acquiring, which will make their eventual decision harder and entrepreneurial efforts less and less likely to succeed.
Certainly, the longer they wait, the greater the variety of excuses they will find for why now is not the time. Common examples include; need to work on my resume, broaden my experience, enhance my skills, save my income, and maintain a stable family life until my children are gone. Most will then NEVER make the step, and remain unsatisfied through much of their career.
The reasons for waiting have merit, but they need to be balanced against the non-entrepreneurial habits that every professional picks up in a large corporation. These include:
- Managers delegate real work. Executives in an enterprise usually don't write their own memos, contracts and certainly don't schedule their own meetings. It's easy to grow accustomed to having your staff do the "real work" (my assistant will call your assistant to work out the details). In a startup, that luxury isn't possible, so the work suffers.
- Executives have perks. By the time many big-company executives are ready to go out on their own as an entrepreneur, they have forgotten what it's like to fly in coach class, buy their own health insurance or have to deal with running out of money. The result is a startup with an exorbitant burn rate, and a very unhappy entrepreneur.
- Manage a team rather than work with a team. There is a difference. In a startup you have to be an integral contributor to your small team, taking your share of the workload and leading by example. That's a whole different mindset and skill set from your experience and training in an enterprise.
- Highly specialized focus. In a big company, you get used to having an IT team around to configure your computer, a personnel specialist for hiring and firing, and a marketing team for strategy. You forget or even disdain any ability to be that jack-of-all-trades a new startup requires.
- Training courses are required. Before stepping into a new role, you count on the company providing you with in-house or contracted training courses for the basics, like project management or people management. In a startup, these don't exist, and you have forgotten about how to self-learn, and there are no in-house experts to lean on.
- Count on getting paid for your efforts. Big-company professionals get in the habit of expecting near-term remuneration for today's work. The average startup founder takes no salary for the first couple of years, with a high risk of never getting any return. After too many years, that's an unfathomable step down for most people.
So when is the best time to make the leap from a big corporation to a startup? My scan of the literature and talking to investors would indicate a few years of experience in a large organization (zero to 5 years) is a good thing, while 20 or more years before founding your own venture will stack the cards against you.
Unless you are really young at heart, if you haven't made the leap by the time you are in your early 40s, those habits you have picked up with your experience in a big company will be evident to your team and to investors. Not to mention the fact that if you are accustomed to a big-company culture and lifestyle, you will likely not be happy or satisfied with the startup lifestyle.
So if you really want to be an entrepreneur, there is no time like the present. Old habits die hard, so the longer you wait, the harder it will be to make the jump, and your odds of success go down. Going the other way is a lot easier.
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(7) YOU DON'T KNOW WHAT "BEING IN BUSINESS" IS LIKE.
When you are unhappy, and you are standing next to a fence, then the grass obviously looks greener. But the only way that you're going to eat from that green pasture is if you are a Farmer, and then only if you are experienced at knowing how to Be In The Business Of, say, farming. If you "make the jump" just to be out of where you ARE, and you have not very carefully calculated what you are jumping INTO, then you have created an opportunity for high-risk failure. And, if you actually have what it takes to succeed in business, it follows that you must know not to do that. ("No, I thought YOU brought the parachute!")
Sometimes, what you really want is ... meaningful change. And there are many ways to do that, including of course "starting your own business" but also many others. Maybe you want to join forces with another, existing firm. Maybe you want to apply what you know in doing a different thing. Bottom line is, "it is very dangerous to be 'merely discontented.' "
http://www.investors.com/NewsAndAnalysis/Article/578920/201107201835/Marcus-Home-Truths-On-Jobs.aspx
Since liberals rarely open links, I'll summarize a couple of key points from the interview.
Marcus says Home Depot would have never succeeded if launched today due to onerous regulations.
His reply to the question "what's the single biggest impediment to job growth today?" Answer: "The U.S. Government"
Now; open the link. Read the IRS figures about how the rich pay a much higher tax rate and the vast majority of taxes in this country.
Now; look at the comments from liberals again bashing the rich and saying they don't pay taxes in this country.
Saying it's "nonsense" to claim liberals don't open links is well, nonsense.
There are so few government regulations in the US on most businesses it is ridiculous.
It can be especially "amusing" when executive try to "rethink" their businss as a startup. Cutting up the corporate "crack" card and scaling back of the luxury expenses like unnecessary air travel, high-end hotels, gourmet dinners, and expensive wine (as well as trips to the local "entertainment") can be especailly difficult to give up;)
I own a small business.
And, I used to be in senior management at big companies.
It is easy to underestimate the advantages of the corporate environment - and the power of their marketing.
A good friend of mine for 25 years who is a very successful HR VP and Recruiter advised me early on to get out of the really big companies because of the issues you describe. The advice was that once you hit about five years with a really big company - it is hard to go back to a small company. So, move every three or four years.
I took the advise and bounced between small companies of less than 300 employees (until they grew to 2000 or so) and the big companies.
Most people don't have the ability or discipline to save to make the transition to startup. Nor do they have the tolerance for the perceived risk.
On the other hand, I took Tom Peter's classic advise of building my personal brand. Building a network and a personal reputation separate from the company can help.
The perception of safety in a big corporation is an illusion. Even the best performers get laid off when they sell the division - or close that business.
The big advantage of developing as an small business owner is that you're always employed. You may lose some of your business - but that's better than losing all of it, which is what happens when you're laid
"Starting your own business" is a dream ... not a business plan ... and, "blindly jumping from the ship into the water" because you don't like how the cook fixed the steak last night ... is a recipe for disaster. That's what concerns me most about the many folks I've talked to who seem to have stars in their eyes about following my personal trail. They DO "have stars in their eyes."
Sometimes I make sure to catch their eyes and say to them, very calmly, "did you know that on Tuesdays you can sometimes get TWO chicken biscuits for four dollars?" I look at them, as expressionless as I can, until "it sinks in."
Argh - now working on a project to extract one of your star gazers. How vulnerable he was when someone (now he can't even remember who) told him that the only way to go was open a Sub-chapter S corporation. This guy was so naive that the didn't even bother to find out the special reporting requirements and complexities involved. He thought he could operate without legal or accounting advice. Now we're in a mad race to correct his mistakes and try and limit his tax liability and so best position him for negotiation and settlement with the IRS and state. And that's just one problem. Sometimes when I'm watching him I try and remember a time when I couldn't recite all the pay roll tax, income tax, sales tax, employee benefit plan and various other returns that have to be filed continuously. Insurance - Worker's Comp and other risk management - and all the other little agonies one endures when operating a business. I went through a painful process in the service of other companies but came out with a very clear idea that running a business is not just about making money. You have to come prepared to preserve as much of that money as you can, by good practice, before you can turn to the activities that you enjoy. I watch as the peril of his position dawns on him. It makes me feel old.
The ones that took their very lucrative serverance and bought into franchises did quite well.
The rest, scaled back a little and never had to work another day.
My advice to those middle managers and people not on the fast track or that don't have a pedigry or golden parachute, get going and get out as fast as you can. You'll be 40 or 50 before you know it, with a big bulls eye on your back.
-AJB