First published in the Financial Times on 6th November 2012.
I have never regretted leaving the phoney safety of a steady job
There is no formula to follow when you decide to become your own boss: every entrepreneur’s journey is different.
For example, Bernie Marcus and Arthur Blank, founders of Home Depot, were fuelled by their sense of injustice. They had run a DIY chain called Handy Dan, but were summarily fired by their boss, Sandford Sigoloff – who resented their success as retailers. Both were in their late 40s, neither had much saved and suddenly they were unemployed.
They determined that they were not going to work for anyone else again. They used their desire for revenge to create a business model that would crush their old company. And thus Handy Dan disappeared – while today Home Depot enjoys revenues of $70bn.
I moonlighted with various modest ventures for a number of years in my early 20s while holding down full-time jobs before I took the plunge. When the stockbroking firm where I worked sent round a memo saying staff had to resign all outside directorships, I knew it was make or break time.
Once I left I felt a huge sense of relief. I never understand why more people don’t do it. As entrepreneur Daniel Gulati says: “The real barrier for most of us is not external. It’s our own psychology: we overthink decisions, fear eventual failure, and prioritise near-term, visible rewards over long-range success.”
Trying ideas part-time during weekends, holidays and evenings by moonlighting can be an excellent rehearsal. Moreover, in the digital age it is much easier to test prototypes while retaining a full-time salaried position. But investors, staff, suppliers and customers will all want full commitment – and it is only when you have everything to lose that the crucial reserves of energy and persistence start to flow.
The crossover moment at which you make your move into self-employment is hard to predict. It may be when you have accumulated enough savings to sustain yourself for a while without an income. It could be the moment you secure a real customer for your new offering. Perhaps your employer turns down a concept that you know could be a hit, and you leave to pursue it. It might be that the right business partner promises to take the leap too. Or possibly you have become so bored in your day job, and so excited by your private venture, that you can no longer live with yourself unless you give it a go.
Certain lucky managers have the opportunity to buy their business thrust upon them. I always encourage anyone in that position to stretch every sinew to seize the chance. Often these companies are the unloved subsidiaries of large groups, which can be bought relatively cheaply and improved with focus and passion. Usually the management will be offered generous equity in the buyout. It is remarkable how ownership and freedom from corporate hierarchy can unleash strong performance in an operation. Such transactions are really the genesis of the modern private equity industry.
As with most vital decisions, no one should wait for the perfect moment to launch their entrepreneurial career. That is simply an excuse for procrastination. Instead, do as much preparation as possible, follow your instincts – and when you walk out, don’t look back.
Despite all my many mistakes and flops, I have never regretted leaving the phoney safety of a steady job. God forbid decades later one should still endure the same daily commute, taking orders from grey nonentities, a semi-helpless victim of office politics and stifling bureaucracy. Better by far the perils and rewards of an independent life, free to win or lose through one’s own striving.
My sense is that the present cohort of graduates and twentysomethings is far braver than I was. The entrepreneurial culture has never been more lively, and I am confident that in the coming years there will be hundreds of brilliant new enterprises led by this generation of risk-takers, who opt to control their own destiny. Some may be starting a company because they have little choice, since the alternatives are bleak. But such a step could well prove providential.
I leave the final words on the subject to the poet W.H. Auden:
We would rather be ruined than changed,
We would rather die in our dread,
Than climb the cross of the moment,
And let our illusions die.