6 Lessons Learned After Leaving Finance For Entrepreneurship
I’ve met countless folks in finance who are unhappy with where they are in life, but never do anything about it. Whether they are clients, colleagues, or competitors - the script is pretty much the same:
“I’ll just work another X years, collect Y bonus, and then I’m out of here.”
Bonus season comes, everyone complains a bit, and it’s the same thing all over again.
I was guilty of it myself for the longest time.
I said I would leave in 2011. Nope.
I said I would leave in 2012. Nope.
Well in September 2013, I finally did - after five years at UBS on their Asia Equities S&T desk.
Now that I’ve had a few months to reflect on what’s happened, here are some of my thoughts for those suffering an existential crisis as a Bloomberg monkey.
1. Keep Bridges Intact, If possible.
One of the biggest lessons I learned in finance is the importance of relationships.
When I first joined in late 2008, a co-worker said that your reputation and relationships are the most important asset in this industry - whether that’s with clients, colleagues, or competitors.
He called this the 3C Principle.
In cash equities, people will switch between the sell-side and buy-side at some point in their career.
Because of that, you never know if your colleague today may become your boss tomorrow or a competitor. Likewise, a client you showered with VIP treatment may become your MD one day or pass a great recommendation to a friend that needs someone just like you.
While a dramatic Office Space exit would be awesome - it’s also incredibly short sighted.
When you go down the path of entrepreneurship, you have the freedom and responsibility to control your own destiny. Besides breaking free from corporate shackles and standard life scripts, this also involves proactively engineering serendipitous situations in your favour.
Burning bridges deprives you of this even if you plan to be in a different industry. You never know if an old colleague will introduce you to a potential customer down the line or help you avoid a costly mistake, so think longball here.
I gave notice to my MD in March 2013, but did not officially leave until September 2013. I understand it's a very rare scenario, but I stayed on to make sure my replacement was on board and 100% functional before I left. (Sidenote: This also depends highly on the corporate culture of your bank.)
The last thing an MD wants is disrupted business and things to go wrong with clients. Because both of us were on the same page until the day I left, we still keep in touch today as they ask me to keep an eye out for potential interns that are a good match.
You’ve done it the right when your MDs, clients, and colleagues are genuinely happy to see you leave.
2. Save as much $$$ as possible.
If you decide to go down this path, start building financial runway NOW. Things will always take twice as long, cost twice as much, and require 2x effort to happen. Sell your stuff, don’t buy stupid things, and downgrade your lifestyle expenses.
If you are not willing to do this - you don’t want it bad enough.
If there isn’t a revenue stream yet, this is even more critical.
Learning how to add value as an entrepreneur is a new beast outside of the corporate environment.
Unless you plan to stay within the finance world (i.e.: coaching, products, and consulting like WSO), technical skillsets like Bloomberg and Excel are virtually worthless when starting your own business.
You can read P&L statements and financials all day, but money needs to find its way to the funnel first. If it isn’t coming in, then it’s a race against time. Again, keep expenses low.
If your business revenues take off within the first month, congratulations. However, it’s a huge gamble to just quit and not have your financials in order. The ultimate goal should be to get it right, make a clean break, and never look back.
In September 2011, I started planning my exit. I cancelled my cable TV, downgraded my mobile phone data, and got rid of everything I didn’t need. I also politely refused all dinners, social events, and just dropped off the face of the earth when people wanted to hang out. It sucked, but I went on blind faith that it would be worth it down the road.
Instead, I binged on audiobooks and blogs about marketing, entrepreneurship, and self-development while figuring out what I was going to do. Before I quit, I had saved up a year’s worth of runway (and no debt) to live in Southeast Asia (Vietnam) by keep costs low. I spent an average of $1,100 USD on all expenses which I’ve detailed here.
The secret sauce is knowing that you are trading this for a bigger payoff in the future - freedom that comes from having a business that gives you time, income, and mobility freedom.
3. Surround yourself with good people.
You are the average of the five people you spend the most time with. If you want to start your own business you need to STOP hanging out with finance folks.
If they really were entrepreneurial, they wouldn’t be sitting next to you anymore. Outside of fear, this is the #1 reason why most people who want to leave finance never do. Classic crab mentality in action:
A) “Who do you think you are to start a business?”
B) “What’s wrong with you? Don’t throw everything away!”
C) “Just stay and collect another bonus, then leave!"
Friends and family will think you are crazy - but wanting what’s safe is not necessarily the same thing as wanting what’s best for you.
To make this work (and I’m still figuring it out), you need to hang out with people who are doing the same things to bounce ideas, get feedback, and support each other. Your finance friends will not understand, instead asking why aren’t you joining them for dinner on the weekends.
You must maintain the eye of the tiger. And if you ever want to see real tigers, check out Tiger Kingdom in Chiang Mai (extra $10 to have a photographer follow you around too)
4. Embrace the fear.
Throwing away a finance career that most folks only dream about is a huge mental shift you must make - the fear of shame and failure are very real.
But take a look down the office at your MD’s room. Is that honestly who you want to be in 10-15 years?
Your MD has another MD to report to with his own set of problems, and chances are he/she hasn’t been ageing well due to the pressure and stress. Ask any MD that’s been in the business pre-2008 and they’ll say everyone is in for a long slog now.
Is that what you really want? Be honest here.
My friend Dan Andrews at TropicaMBA has a 1,000 day rule where it takes three years to replace your full-time income. Some folks in our circle have figured it out faster, some slower. But either way - this is a long ball game you’ll be playing and time is your most valuable asset.
If you want something you’ve never had, you must be willing to do something you’ve never done.
6. Leaving is just the beginning.
Most people never get to this stage.
And it’s funny because looking back six months later - it’s such an inconsequential event. I always thought leaving the industry would be some big moment, but turns out it’s just another day.
When it comes to entrepreneurship, things tend to take more time, money, and energy than you originally planned. Some things you thought would work out end up as a complete disaster, but you’ll never know if no action is taken.
Instead of worrying about news headlines, quarterly earnings, and market sentiment - finding customers, staff, and staying motivated becomes the real challenge.
You’ll constantly learn new things about business and yourself. Like the airplane that veers 1 degree off course, over time you will end up in a very different place than your peers.
5. Don’t worry about your idea.
If you think you need a brilliant idea to quit your job, stop.
You’re being an idiot.
Businesses is iterative and never follows a linear path.
It’s the ongoing process of talking to customer(s), finding out what problem you can solve, integrating that feedback, doing it better than the competition, and repeating.
It’s one thing to look at a P&L inside a cush office or MBA case study, and another to have your back against the wall trying to get orders in the door.
You can sit around all day hypothesising what may happen or how you will execute, but in the end it’s about putting your foot on the gas and figuring it out as you go.
“What problem do you solve, and how do you do it differently?”
That’s the ultimate question we are all trying to answer as entrepreneurs.
For those that are tinkering with the idea of entrepreneurship, I hope you found this post helpful.
I am still nowhere close to matching my employee salary, but it’s slowly getting there.
The biggest benefits are being able to work whenever you want and stick to your own schedule. Downside is there is plenty of work to do, and you never know if things will work out or not.
To be transparent, my focus has been on two projects in the E-Commerce space.
Build My Online Store: E-commerce blog and podcast dedicated to entrepreneurs running online stores. (www.buildmyonlinestore.com) I started this as a casual podcast/blog while still working at UBS on the weekend and evenings when I got home.
#BALLER Leather - Handmade Italian leather wallets designed to make your life more convenient and hassle free. Our wallets are thinner than 14 sheets of paper and weigh less than two slices of bread - no bulge, no bulk. (www.ballerleather.com). This was launched fairly recently, as there is a lot of synergy with having an e-commerce blog and your own online store.
If you're also looking for an exit in finance but haven't been serious about it, here are some podcasts/resources that will steer you in the right direction:
Cheers and thanks for reading.
Let me know if I missed anything in the comments.