THE GRIT AND THE GLAMOUR
A standard route for second and third generation wealth was to include a stint at an investment bank. What if start-up experience is actually better? Three entrepreneurs share their stories.
hat kind of preparation does it take to run a successful company? Countless books have been written on the subject. Wealthy businessmen and women, eager to have their children take up positions of responsibility in the family business, have fretted over it. For some, it is an MBA at a prestigious university, followed by an apprenticeship of sorts at the business, or perhaps a position at a leading bank.
But what about founding and running a start-up enterprise? Is this the way to train for an ever-changing future?
“You don’t really get full business experience most of the time if you’re working for a big company. It’s 20 years of doing the same thing, every damn day,” says Keith Rumjahn founder of Coachbase, a Hong Kong-based start-up that developed a digital playbook and tools for sports coaches. Rumjahn sees a holistic understanding of the business as key to running a solid business, and working in a start-up he says is a great way to learn how different parts of an organization works.
“You touch so many things,” he says. “Instead of having to wait for approval, you have to be a self-starter.” Rumjahn admits his own bias toward the start-up life. “I think to be good at anything you need practice – deliberate practice. So many people in business are so academic.”
There are numerous aspects of start-up work that Rumjahn thinks make the experience a better sort of business training. For starters, you meet a broader variety of people that someone plugging away in a corporation might never do. “The moment they know you’re the CEO, people want to talk to you,” he says. Another is building momentum: if you step into the top spot at a large company, you only need keep it running. With a small company, you need to pivot, motivate and maintain vision.
Another key point is the difference between founders, who have the
experience of being in crisis, and CEOS who step in. There is a lack of emotional attachment that Rumjahn thinks leads to a lack of fortitude. “A founder can handle a crisis. It takes a lot of emotional strength.”
He says this is also a pattern he sees with people who have a banking and finance background. When things get too tough, they know that they can go back into banking and finance and be making money more comfortably, though Rumjahn also admits that traditional education in business might have helped him avoid some of the mistakes he’s made in the past.
Ray Horan, CEO of Hong Kongbased Regtech firm Emotics, is a serial entrepreneur and trained accountant. As he started his own firms, he was already familiar with setting up a business and the language of corporations.
“You’re not so afraid of it … simple things like knowing how to incorporate a company, knowing how to set out a budget, how to forecast, what your burn rate is, how long you’ll last.”
The accounting professional was, by his telling, painful and not something he would have stuck with. Yet, he also says that going straight into founding a company was not the best choice either, he says in retrospect. “My time would have been better spent in a start-up that’s slightly more established, with founders who had done it before.”
At the other end of the spectrum is Carl Wu. With nearly 14 years of experience at the international bank UBS, and as a founding member of the Blackstone Group’s Asia operations, he had plenty of corporate training ahead of his current role as co-founder of New Frontier, a venture capital firm.
“Without the training I had at Blackstone, I wouldn’t have been able to do what we’re doing now,” he says, citing the ability to learn about new companies and industries quickly and to fundraise. “Sometime last year, I knew very little about healthcare, and now we have five healthcare companies across different sectors,” he says. The healthcare company he says went from zero employees to 1000 in the space of around a year.
For Wu, he has no regrets about jumping into the world of start-ups later on in his career.
“I think I’m the type that would be comfortable with more professional experience, but there are some people who are very natural in building companies from the ground up,” he said. “They probably don’t fit well into professional organisations and large organisations.”
Wu agrees with Rumjahn’s views that working within the parameters of an existing company with resources is substantially different to working in a start-up. “The actions and decisions you make have impact… Making too many mistakes tends to be fatal,” said Wu.
The verdict? There’s no one path or answer. Experience in a large company is helpful if the company allows you to get a chance to try your hand at a variety of roles, but a start-up will certainly test your mettle and ability to adapt and survive. It may depend on whether the start-up experience involves real bootstrapping – finding the cash to make a company work without any outside help.