The start-up syndrome
Lots of people I know who’ve spent their entire career working for large, established companies are keen to either launch entrepreneurial ventures or join existing start-ups. The sense of independence, the desire to create something big from scratch, and earn big bucks in doing so, is no doubt alluring. And that’s prompting thousands of people to chuck relatively stable corporate jobs and take the plunge into entrepreneurship. The truth is that making the transition is anything but easy. Most people I’ve known struggle to adapt to the new environment, primarily because they find it hard to shed the baggage of the past. So what happens when you bring in a big company mindset to a start-up environment? Here are a few scenarios that I’ve noticed friends and colleagues encounter when they’ve attempted to cross-over.
1. Starting up can never be a defensive move: Corporate jobs are becoming a lot more unpredictable. Especially if you’ve been part of a multinational. Leadership changes at the HQ could often set off waves of restructuring that might creep up on you unexpectedly. I’ve known a few friends that have used this uncertainty as a trigger to consider starting up. Along the way, they may have picked up some experience of the entrepreneurial ecosystem, either as mentors or angel investors. But when you sit down to have a deep conversation with them, it seems as if they’re clutching at straws. Scratch the surface, and one finds that they seem to lack the conviction for the new journey. Because if it weren’t for the sudden turbulence in their comfortable, predictable corporate existence, they perhaps wouldn’t have signed up for the uncertainty and ambiguity that the transition brings.
So if you’re actively choosing between another big corporate job or taking the plunge into starting up, ask yourself if you’re ready to give up all the trappings of your corporate career. If you aren’t, there’s absolutely nothing wrong with that. Except that entrepreneurship demands extraordinary commitment and conviction. And it is better to face up to the fact that you may not be ready to make that transition, just yet.
2. The best of both worlds is a bit of misnomer: Consider this: What if you had an option to join an ambitious new business venture floated by an established company? A fat corporate salary, with ESOPs to boot, and the security of being part of a large set-up — it would seem like a great deal. And perhaps it is. Except that it may well be an illusion. Friends that I’ve known with years of big company experiences have typically struggled to adapt to such assignments. Because after they shifted to a new entrepreneurial venture, they continued to operate from memory. Watch out for the telltale signs: Large, fully-resourced teams, expansive Excel sheet formats to monitor progress, long product development cycles, big outlays on mass media, outsourcing consumer insights to external agencies, hiring leaders for credentials and pedigree, rather than for the fire in the belly, undue focus on annual salary hikes… the list is long. This is the only way most managers have functioned all their lives. And while they are excited about being a part of a start-up, they’ve never really experienced what that means.
The result? Very soon, the agility and the nimbleness that a growth business needs to succeed is killed in this painfully slow corporate bureaucracy. And it is hard for those trapped within this system to realise the bubble they’re in. Until they receive a jolt and are able to gradually shed skin — and learn to deal with the messy, chaotic world of entrepreneurship.
3. Surviving like a cockroach: The marquee new age tech ventures may have willy-nilly created another illusion: That it is possible to create enterprises with billion-dollar valuations in double quick time. The venture capital-fuelled get-rich-quick movement may actually have goaded an entire generation to take the plunge into starting up. Some of the irrational exuberance may have been tempered now.
But for a lot of senior corporate executives looking to take the plunge into entrepreneurship, just how much venture capital they’ve been able to garner, is still seen as a badge of success. There are many examples of CEOs who’ve stepped off large companies and found VCs to back them with lots of capital.
Except that none of this should stem from a false sense of entitlement. I’ve known one such person running an early stage venture, who even before he’d achieved a million dollars in revenues, was obsessed with snagging $100 million in funding — and a steep valuation to boot. All his focus was on funding — rather than working with small amounts of capital to learn how to build his business in the marketplace.
The reality is that most entrepreneurial ventures need time to bloom. And staying the course backed by a frugal mindset is par for the course. That’s not something that comes easy if you’ve been weaned on business class travel, five star hotels and fancy offices.
The writer is co-founder at Founding Fuel