In a previous post, I listed my major hesitations that I often share with founders these days who ask me about starting businesses.
Ultimately, I really believe that founding a business isn’t for everyone. It probably is a good fit for many at some point in their careers, but not necessarily immediately.
So, the question then is, what is a smart thing to do other that starting a company if you think that an entrepreneurial career path is in your future?
It’s pretty simple – I think you should join a startup. And on balance, the earlier you are in your career, the more you should prioritize joining a screaming winner. I mean this at the expense of finding the ideal role, ideal seniority, and ideal stage. Join the winningest company you can find in a sector you care about with people you like.
Some points / counterpoint:
1. Don’t you learn more from being a founder than joining someone else’s company?
There are some things you do learn from being a founder that you will have a hard time learning anywhere else. But I’m not convinced you will learn more, especially if you are relatively early in your career. Again, 99% of startups fail, and I don’t think you necessarily learn more from being the leader of a failed company vs. being a part of a winning company. I totally agree with what Joe Kraus wrote a week ago: “you may develop more character from your failures, but you learn more from your successes by far.”
2. Don’t real entrepreneurs just take the leap and do it?
This is a myth that is propagated by popular press. It’s a very romantic notion that the great entrepreneurs are people just just “take the plunge”. But the reality, most entrepreneurs manage and stage their risk very well. Entrepreneurs DO have a strong bias towards action to create the evidence to test their hypothesis about their opportunity. But they rarely go “all in” without doing a reasonable amount of work to figure out if a particular venture if going to be worth years of time, energy, and capital. Furthermore, even many first time, young founders of monster companies, still started out by getting exposure to the playbook of success at larger companies. THink about many of the folks in the Paypal mafia, for example, including guys like Jeremy Stoppelman. Jeremy had engineering roles at Excite and Paypal before starting Yelp. Andrew Mason worked for Eric Lefkofsky and Brad Keywell before coming up with thePoint (which eventually became Groupon). This is why we actually like the profile of “Tom Brady” founders, who may be still early in their careers, but found a way to learn the playbook of success from excellent entrepreneurs or strong entrepreneurial organization before founding their companies.
3. Doesn’t the equity of joining anything vs. being a founder not make any sense?
This is true. It’s also short sighted thinking. Just talk to the guys at Facebook who are now millionaires even though they were just teeny equity owners. Aside from the pure economics, there are lots of non-monetary, long term benefits to joining a screaming winner. One that is often overlooked is the remarkable network one builds by being part of a fast growing, outstanding company. Big winners have bigger teams, more alumni, more people with more specific skill sets, etc. No matter what you do later, you will benefit from that network of people, whether it’s in hiring, partnerships, etc. I joined Ebay over 10 years ago when it was already a public company. I was there for a relatively short time, but in many ways, the relationships I formed then have had a huge impact on the rest of my career (and it only seems to grow stronger over time).
Finally, I think there is just the inherent satisfaction of being a part of a company that is making a big dent in the world. We’d all like to be the person who started that company, but there is a huge amount of pride to be had in being a contributor, even if you aren’t a leader. Also, scale and success give companies the right to do something meaningful. I often hear founders of failed companies lament “I realized that I just wasn’t that excited about X, Y, or Z market.” Well, the truth is, most people probably aren’t that excited about about helping merchants process credit cards (until Square) or the apartment rental industry (until Air BnB) or local advertising (until FourSquare), or the private car industry (until Uber) etc etc. Being part of a successful company that is shaping the future of an industry is usually inherently interesting and motivating, and it’s a great way to spend a few years of your life until the time is right for you to start a company that will do the same.