As a young professional starting your career you might have a black and white view on entrepreneurship from a career perspective. This means you'll think that the only way to learn entrepreneurship is to become a founder. The reality is much more nuanced. Most successful entrepreneurs are serial entrepreneurs who failed in several businesses before their success. Many also go back and forth between consulting, starting businesses and being employed in startups. In the beginning of your professional career you're faced with the choice of whether to start your own company or work for someone else. In this post I'll discuss the tradeoffs.
Founder or early employee?
From career perspective, one could argue that when being a founder, you’ll learn a lot more than while being an early employee and thus it pays off to start your own company even with a sub-optimal idea. This is probably true, but it is also very dependent on the mind-set you’re having. As a co-founder you have to learn certain things and grow to the role. As an early employee your growth is more dependent on how good you’re in controlling your personal growth and learning. In both positions you can learn a lot, but different things. As an employee you’ll learn to be a better entrepreneurial professional, be it a designer, marketer, programmer or product manager. As a founder you will be forced to learn leadership and the core entrepreneurial attributes, but that might come with a cost to your professional learning. However, over and over again when hiring and working with professionals I've seen how the leadership and business skills are very hard to come by for non ex-entrepreneurs.
The pros of starting as a founder
- You'll learn about leadership and business
- You can really maximize your personal productivity
- You have full control over your learning
- You prove that you're an entrepreneurial self-starter, which is a requirement for many entrepreneurial professional jobs
The cons of starting as a founder
- You are likely to experience great stress levels and it's easy to experience a burn out
- You might not have more experienced people to learn from around you
- You will probably need to take a cut in your financial compensation
- You might end up without producing anything valuable
- Having to do a little bit of everything, you won't necessarily develop yourself in your chosen profession as much as elsewhere
As a founder you're in the driver's seat without any training wheels. This usually means you're also learning a lot about yourself. Starting as a founder is definitely not for everyone, but the learnings about leadership might pay off big time later in your career. Also many positions have entrepreneurial experience as a pre-requisite. Therefore, having started your own company you will tick a box and be eligible to positions you otherwise wouldn't have the seniority for. This means your entrepreneurial experience might serve as a shortcut making your progress to your dream job quicker.
On the otherside it will get very stressful. To succeed and to motivate others you have to believe in what you do 100%. When things start to get difficult, the downwards part of the entrepreneurial roller coaster will demand a lot from you. Getting back up again requires money and time.
Starting as an early employee?
Starting as an early employee wields a lot of benefits. In case you choose your company well, you might be progressing in your career several times faster than you would in a regular company. I've seen people start as interns and 3 years later be at a VP level.
As an early employee picking your company is crucial. You should choose a company which:
- is growing super fast
- is executing on a brilliant opportunity (as discussed in my previous post)
- has an experienced team you can learn from
- has a culture you want to embrace
The cons are about limiting your learning. In case the company doesn't grow quickly enough, your tasks can easily become repetitive and boring. Also you might get trapped into growing to a role you're not qualified for. This might be nasty as it is seldom good to take a step back or choose to work for a bad company.
When starting your own startup
Even if doing your own thing is risky, it can wield much faster learning and pay off in the long run. As discussed in the previous posts having an excellent idea matching your skill-set is important. There are also a couple of other things to consider that help you mitigate the risks involved:
- Do something tangible and valuable (e.g. web service) that will stay in the internet forever even if the company fails.
- Don't quit your dayjob before you've gotten your first investment or revenue to sustain your living costs.
- In case of co-founding the company without paying salaries to yourself, agree on the timeline for investment and how you valuate the time put in upfront.
- Do something you would enjoy doing for free.
- Fail fast. One or two years investment of time can be justified, but as time go your learning curve is not so steep anymore.
Freelancing - The third option
The third option is to focus on learning the execution skills to make you a better entrepreneur by building a lesser ambition company. You could become a lifestyle entrepreneur. Lifestyle entrepreneurs have a bit of bad reputation as slackers. People think about surf-shops and lifestyle bloggers. However becoming a lifestyle entrepreneur can be a powerful vessel for becoming an high-growth entrepreneur. Being a freelancer gives you freedom and a great platform for developing your skills. As a freelancer you can:
- Learn more about high-growth entrepreneurship, technology and business with your increased freetime.
- Develop faster with more freedom in choosing demanding and relevant projects.
- Earn more and get the required capital for building and testing those ideas you want to execute.
- Understand your value and skills better. As you'll be constantly evaluating the value your professional services have.
- Execute and experiment with build small companies (“cash cows”, “muses”) that can support your pursue for a billion dollar company. This experiments might also be a good way to test the potential of a new big idea.
Many business graduates, might notice that they don’t actually have the skills required for going freelance (at least with this degree of freedom). I’d argue that most likely in this case they don’t have the skills required to start a high-growth business either.
In summary a good way to approach the entrepreneurial career dilemma is to first to ask yourself are you so passionate and stubborn about changing something that you're willing to take huge risks and put in 5 years of effort for trying it out. If yes, then start a startup. If not then evaluate the options you have from a career perspective. Maybe learning the ropes and skills required might serve as a good first step for eventually starting your own startup.