Entrepreneurs make our world a better place, but this lifestyle isn’t for everyone
When you take a leap of faith, you might not like where you end up.
As an employee of a large, successful company, I was on a safe and secure path to achieving a seven-figure salary by the decade’s end. However, I felt as if I needed a change. So rather than stay on the corporate route, I decided to alter course and venture onto a new path of entrepreneurship. It was a bold choice that I look back on and wonder… was it the right one?
My life has been a roller-coaster ride ever since, and I can only imagine what it would have been like had I not made the switch from safe and secure to daring and daunting. This is my story about why I chose a new path, why I traded a set career for an entrepreneurial start, and why I wouldn’t do it again if I knew then what I know now.
So many people I know — friends and family — want to be entrepreneurs. If you’re thinking of becoming one as I did, I implore you to read this first before taking the leap of faith.
Many of my friends and family envy me for being an entrepreneur because they’re employed by a corporation and see me as a beacon of independence, my own boss — someone who is writing their own success story. They don’t realize how risky and even dangerous my journey was that got me to where I am today. And the sobering reality is that my journey isn’t over yet. So what kind of reality awaits you if you follow my example?
Consider the following:
In an interview on 60 Minutes, Elon Musk was asked about what he had to do to take Tesla, Inc., from an entity near bankruptcy to one of the most commercially successful companies today. When talking about his path to ensure his company would prosper, he said, almost in tears, “I would not wish this on anyone.” Clearly, his sacrifices paid off for him, but entrepreneurship does not always have such a glamorous turnaround.
Look at the stats. Compare the corporate ladder of whatever company you’re working at with your prospects for being an entrepreneur. Look at the number of businesses that actually go on to succeed and grow from a few employees to hundreds or even thousands. But, of course, that kind of success comes at a price, a level of perseverance you need to commit to when hardships come your way. And even then, success isn’t guaranteed.
After considering the success and failure rates among start-up businesses, look at the payoff. A lucky few entrepreneurs will see a return on their investment, but the payoff might not be as much as they hoped. Most of the entrepreneurs I know have found that they either break even on their investment or end up with less money than they would have earned had they stuck to their previous careers. And considering all the pain and the sacrifices they needed to make, they don’t think what they received in return was worth it. And this is the reality you face if being an entrepreneur pays off. The harder truth to swallow is that more than half the start-ups created to end up failing. One study found that first-time entrepreneurs have an 18% chance of succeeding, and entrepreneurs who have failed previously have a 20% chance of success the next time around.
I must add that not all entrepreneurial careers are created equal. Some individuals are more confident in themselves, some are more prone to taking greater leaps of faith, and some will take fewer risks when starting something new like this. There are different levels of entrepreneurship you can embark on. For example, leaving your career in corporate to start something from scratch, whether on your own or with partners, whether using your own savings or money borrowed from friends and family, is far riskier than joining a well-funded start-up. However, I consider this no different from a corporate job. The type of start-up may also be different — you could become a solopreneur and remain an independent contractor for life, which is not as risky as deciding you want to start something that could change the world, risking everything in the process. The payoff and risk in each case vary substantially.
That said, I personally define a true entrepreneurial lifestyle as the one I went through… and am still going through. I believe being a true, fully dedicated entrepreneur means risking everything and forging a secure lifestyle. You put your skin in the game to build something great in order to leave a legacy behind, no matter how big or small that may be. That was my driving motivation for becoming an entrepreneur, and it’s what drives a lot of other people as well.
My Personal Background
I grew up with very traditional parents who defined success as being part of the “rat race,” the endless pursuit of prestige and favor in the world. And a degree in medicine or engineering from one of the world’s most prolific colleges was as prestigious as you could get. As a child, I was heavily influenced by that mentality, and when the time came for me to seek higher education, I set my sights on an engineering degree. Biology was never my thing; however, I loved math and creative problem-solving more than anything else in school.
When I graduated with a BS from college, I decided to continue with a master’s degree since it was almost free if you had a teaching assistantship, plus it took less than two years to complete. I could improve my starting position at any company I wanted to apply to. Once I finished my master’s, I went on to interview with recruiters around Connecticut, where I lived. At this time, General Electric (GE) was one of the most reputable recruiters in the area, so when an offer came to me from this organization, I joined immediately.
Initial Corporate Career
Considering the corporate ladder within GE at the time, I could sense the room for growth awaiting me. However, our unit’s CEO’s salary was in the high six-figure range, and at that pace, I was looking at a possible decade or longer before ever reaching six figures. A couple of years into my career, I was losing ambition on this path, so I knew I had to do something to accelerate my timeline to success.
While in the waiting room of a doctor’s office, I happened to spot a magazine produced by the US News that had just published its list of the top schools in the country. In that edition, the magazine announced the top list of the top salaries of graduate schools. What I read surprised me — I never even knew careers existed out there that paid an average six-figure salary right after graduate school. The condition, of course, was that you needed to have an MBA from one of those schools.
This changed things. I couldn’t believe that I had never even considered getting an MBA to further my career prospects; all I had been thinking of up to that point was shaving off several years in my career plan to receive that six-figure salary from GE. For the next few months, I researched what it would take to get into a top MBA program and found out that the most important requirements included having a top GMAT score, a high GPA, and a couple of years of work experience. This would improve the chances of getting recruited post-MBA. This made sense as post-MBA salaries increased yearly; these top colleges needed to ensure their students had prospects post-graduation to keep their top status. I wanted to go somewhere not far from where I lived, and New York City was my first choice, which meant there was only one option for me: Columbia Business School. I focused all my attention on making it to that school, and soon I found an admittance letter waiting for me.
Move to Management Consulting
My MBA experience warrants an entire story on its own, but I’ll keep it short. I had a lot of fun in the program and made many friends. I also racked up over $100,000 in debt, but I felt the effort I put in would pay off in the end. At that time, three career options existed post-graduation: management consulting, finance, and technology (dot-com companies were hitting their stride). I didn’t think I could fit into the Wall Street culture waiting for me in finance, and the dot-com bubble seemed too risky to me, so I opted for consulting. For a short time, I was considering investment banking at Morgan Stanley. I wonder how different my life would have looked had I gone down that path instead.
I went into strategy consulting specifically. This is a very secretive industry, one in which you’re bound by confidentiality. So rarely did we talk about what we were working on to outsiders — or even insiders — of the trade. One big difference between my time in strategy consulting and my time with GE was the number of employees I managed. I managed more than 100 engineers and developers on GE’s corporate team, whereas in consulting, I maxed out at 15, even when I had multiple teams running. But the main difference was the clientele I saw — I dealt with high-profile leaders from the public and private sectors, ranging from CEOs to heads of state.
My path in management consulting had a greater upside once I’d stuck around long enough and survived the up-or-out process. I was looking at a seven-figure salary within less than a decade, much better than what I could have expected in corporate. I was also looking at a clearer and quicker path to a senior partnership with the company, something I couldn’t say when working in corporate America. I just needed to keep my team/unit growing and succeeding while building necessary relationships with clients that would benefit me and the company. In doing so, I would prove to be a valuable asset to the company, and my stock would rise.
While my career felt rewarding at first, things started to change — and not in a good way. I was exposed to multiple industries and companies in the early days, but I had to become increasingly specialized as I progressed. Workdays got longer, the atmosphere became too competitive for my liking, and the tasks assigned to me became far too overwhelming. Finally, in 2006, I decided that I’d had enough. I could no longer deal with the office politics, and the 4-day travel schedule was brutal. I found that many consultants felt this way at this stage of their career, and they would contemplate changing jobs, often deciding to go somewhere less demanding.
This is what I decided to do as well, and this is where my entrepreneurial story begins. I was not too fond of office politics, I didn’t want to be a slave to the corporate structure, and I was done with not being my own boss. So I quit and decided to go it alone and start my boutique consulting business.
I had a vision of building a new system to foster a better lifestyle both in and outside of work. I would recruit consultants who’d also had enough of the same 4-day travel schedules and long hours, charge clients less, and attract the brightest minds who wanted to leave their corporate lifestyles behind. I figured that since I had built-in relationships with previous clients, it wouldn’t be hard to start a new business. I was young and unmarried, and I had little to lose at the time; I felt it was now or never when it came to becoming an entrepreneur. So I took that first step, made that leap, and quit my job, vowing never to work for someone else again. And that was how the roller-coaster ride started.
The first ten years were crazy. While corporate life had its own pains, I was now experiencing new pains I’d never even imagined. I was racking up new bills to pay, which wiped out all my money. I had so much more overhead than I’d planned on, including paying accounting and legal fees, hiring staff and administration, renting an office, etc. The costs kept increasing as I hired new consultants, and some days I would come home and think to myself, What have I done?
Luckily, I had a good line of credit, which meant I could rack up debt to pay for staff and cover my overhead. Revenue covered the costs, and when we acquired new projects, I could finally pay off that debt and have a good period of relief… until projects dried up, and we had to pitch new ones. With large consulting firms, it’s easier to let people go when things go south and hire new ones when business thrives. But with a small boutique that had fewer than 20 consultants, a lack of business always meant you were at risk of going under. One of my managers once told me that in consulting and contracting, your business is as good as your contract. And if you didn’t have a contract, you didn’t have a business.
So, when business went bad, what were my options? At first, I still had the option of going back to my old career. The longer I stayed away, though, the harder it was for me to return; the window on that option closed more firmly with each passing second. While I was struggling in my business, my peers and trainees were becoming senior employees at their corporate companies, and… well, here I was. When business was slow, I felt stuck because I realized I didn’t have that many other options left.
The downsides will vary depending on what kind of business you’re starting up, but the experiences and feelings that come with it are always the same. You’re always going to fear failure, and you’re always going to feel anxiety due to the continued uncertainty of it all. Not to mention, you’re looking at an income that is not guaranteed, which is the hardest thing to overcome, and if you have a family that depends on you, then your business needs to be successful. There’s no option for failure there. In fact, a US bank study found that 82% of businesses that went under did so because of cash flow problems. This is why I caution you and recommend that if you want to try the entrepreneurial path, do so early in life. Take this risk when you don’t have a spouse or kids depending on you, or at least when you have a supportive spouse that is generating an income that will keep your family afloat.
I come home some nights not knowing how I would compensate employees and contractors or how I was going to pay for my upcoming household expenses. It’s hard to sleep during those nights.
What Should You Do?
I urge you to think seriously before jumping into entrepreneurship. We as humans are overly optimistic and self-biased, especially when it comes to our dreams and aspirations. Daniel Kahneman, Nobel Laureate behavioral psychologist and author of the best-selling book Thinking Fast and Slow, said, “People tend to be overly optimistic about their relative standing on any activity they do moderately well.” We believe we know more than we actually know, and because of that, we tend to be dangerously overconfident about our start-ups and ventures.
Is this a bad thing? Not entirely. Without this optimism, there would be no invention and no innovation. No entrepreneur would ever dare venture into something outside their comfort zone, and we’d never see what the greatest minds of the millennia have to offer. This entrepreneurial drive and risk-taking spirit have shaped our world today. But that optimism has to be accompanied by a strong sense of realism. You need to be aware of the ups and downs that this career choice brings before you decide to follow through. And the good news is that if you persevere and learn from your failures, you can increase your chances of success. The most successful entrepreneurs are those who failed several times before they succeeded. Will that be you? Only time will tell.
Take my experience in entrepreneurship as a cautionary tale. Be smart, and be safe about what you do with your life. And with luck, yours won’t be a cautionary tale for someone else!