When to jump to entrepreneurship
Pretty straightforward post here.
For context, I work in food and bev LBO at a small shop on the west coast.
However, my mind is always day dreaming about grand ideas that I want to execute and are too big to do on the side. I’ve always been an entrepreneur by nature, and frankly I get tired of doing analyses all day and being anxious about granular details that barely matter.
How do I approach working toward an eventual exit to entrepreneurship? How will I know when is the right time? Is it stupid to entertain these thoughts in my early 20’s?
It's not stupid to entertain these ideas. One thing I've learned through the years is many people say things like. " I want to become an entrepreneur ...;" In reality, it's not something you become. You either are or you aren't. You certainly gain skills to improve your company along the way, but entrepreneurship is really an attitude / mindset. At a basic level, it's about taking existing resources and reorganizing them to provide value. Meaning you find a hole in a market (product or service), and through ingenuity, creativity, talent, and moxcy, you create a new offering that's better which provides value. It could solve a problem. It could be cheaper. Whatever. But the key is, you need to have a burning desire to do that. Doesn't matter what the product or service is. Elon Musk is an example. There were cars. There was lithium. There were alternative energy sources. There was a desire to go green. All of this existed. He took all those "resources" and rearranged them to create the EV as we know it today. Then he applied scale. Same thing happens all over the country every day from large organizations to corner stores who find a way to get local customers to buy from them instead of the big boys.
If you have it in you, you'll know when it's time. It will probably look and feel more like, "I can't do this other stuff anymore. I need to break out on my own and create, build, etc." That happened to me a long time ago and it's the common theme I see in my entrepreneur peers.
That’s how I’ve felt my entire life. Always trying to find holes in markets or creative ways to shift a market.
I have a quasi mentality of someone like Elon Musk, however my brain power is about 5% of his so my ceiling is way lower of course.
Elon is more akin to Edison than Tesla imo. Super impressive nonetheless, so was Edison, but he knows how to hire the right people.
Regardless, do it. See if you can slowly build up traction while being employed (if possible, depending on your idea and employer). If you YouTube search “YCombinator” you’ll hear lots of great content as well. For legal setup stuff, I have read about many who have used Clerky. The rest is yours for the taking.
If you’ve got tech questions feel free to ask me too. I’m not the guy who knows every answer, but I am a software engineer and can usually at least point people in the right direction even if I don’t know it myself.
No one right path for sure. Just my experience though that you need the desire and ability to be head cheerleader, fundraiser, banner waiver. Having an organized approach is great and very necessary to scale but you really need that ability to immediately run 100 mph and get things done, get clients on board, get things moving. It's a lot more about doing than getting ready to do. See what works, what doesn't, but get checks! The checks will prove concept and underwrite growth, systems, scale, etc. Hardest thing to do is get that first check. Second hardest thing to do is get the next check. Then you're on your way and you decide what type of organization you want to be.
Highly recommend reading "The E Myth: Why Most Small Companies Fail and What you Can Do About It" by Gerber. Great fast read on differentiates the technician, manager, and entrepreneur and gives a practical framework for how to build / grow a company. Love the idea of putting together an org chart of all the traditional roles. Will have your name in all or most of the boxes initially. Then as you build / grow, you replace yourself with others and you continue to refine your role to revenue, ideation, communicating the mission, networking, business development and ultimately selling the business and starting your next entrepreneurial venture. Entrepreneurs don't sit still. We get pretty bored easily and like sharks, need to keep moving.
Sometimes I feel like guys like Elon, although brilliant and hard working, had a good amount of luck along the way. He came at the perfect time - right before the dot com crash when VC’s were throwing money at basically every internet start-up.
I mean if you hear his initial endeavors, he actually didn’t write good code and his brother was in charge of all the business. He was literally ousted out of zip2 but he did good job capitalizing on the money he earned from zip2’s sale to compaq rather than merely resting on his laurels.
It’s obviously much tougher these days to secure funding, not to mention that it sometimes feel like room for innovation is totally gone, and now people are just iterating on what’s already been created.
I would personally only take a risk on a startup of my own after a couple years of solid experience, with at least a couple hundred grand in the bank account, ideally 1M+ NW.
I rather earn a steady check and live life than to do something risky and maybe give up my livelihood. To each their own.
2020 and 2021 were amazing because any idiot with a worthless deck could raise preseed at a ridiculous valuation and be cashing secondary by Series A - which also didn't require much in the way of traction.
Now that valuations are back to normal, the game is crushing the tourists.
My advice would be to start ASAP, but dont quit your job. Keep cash coming in and work on your company as much as possible in the remaining hours you have. Or find something more relaxed while you work on your startup.
Once you have traction/enough CF coming in, decide if you want to raise or not :)
Highly recommend joining a seed/early stage company (maybe less than 20-30 employees) in key role. A well funded one should be able to pay you six figures still.
You'll learn a ton, plus reduce your risk. Start-ups are also hard work and NOT glamorous, so this job experience will give you a taste of reality to see if you still want to pursue it.
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