To Corporate or to Entrepreneur is That the Question?

As many of us graduate a new world emerges where the lure of Wall Street does not shine as bright. X-Bankers roll up their sleeves and start their own companies. We begin to question if taking the pre-paved corporate path is the way to go? The adventure, uncertainty, vibe and the promises to “be somebody” and “do something” makes us teary eyed and ready to take the plunge almost instantly without doing our own due diligence.

Risk averse by nature, financially burdened by school loans, but further overwhelmed by the gloom of reality that “most entrepreneurial companies fail”, and of those that do not “most fail at the growth stage” I want to explore with you some facets to consider in deciding what is right for you.

1.) YOU
Forget about deciding a path right now and focus on you and what you want. A teacher and friend Professor Freeman has a framework I FORESAW IT
,used in negotiations I find it useful in figuring out your “I”nterests. What is it that you want? The rest helps you figure out how to get it, including figuring out options and tradeoffs you can make to get the best package for you.


It is important to understand what is critical to you and what you can make concessions on. Do you need to have a minimum salary or can you be happy living outside of the city but pursue a career that engages you? Do you need to stay in the same geographical location or are you open to flying to Idaho for a conference on … ? Understanding what you are after will put you in a position to both ask the right questions and negotiate.


Understand your risk profile and come up with back up plans. You will never be able to predict what will happen as life has an interesting way of surprising you, but at the same time never puts in front of you what you can’t handle. However, that does not mean you should do nothing. Understanding your risk profile and what you can handle will help you best take a calculated risk and cushion your fall, and fall you will.


In the case that this does not work out what is your option B and what do you need to get there? Do you have some sort of safety net - financial, family, friends, self confidence to pick up and keep at it?

Your personality is also something to consider. The Entrepreneurial world is turbulent and does not wait around. There are often no instructions or safety nets and you are expected to think on your feet and act with little to no guidance. “Can you only code in Java? Well too bad today we need ten presentations sent out to our investors or we may not survive until tomorrow.” As a player in the entrepreneurial world you must be, or learn to be, comfortable with chaos and thrive in it, otherwise a more structure later stage company may be right for you.

2.) Entrepreneurial Company
Did I mention that most fail? This needs to be an understood risk but one that can be loosely quantified to understand if the “investment” of your effort and time is worth it for the PV(return) – Opportunity Cost – Sunk Cost.


The Company
What is the company? What is its Business Model? What is the product? How do they generate revenue? If it does not generate revenue who are the investors and what is the projections to revenue generation? How does the market look for this product/service in a given time horizon? Who is the competition?
The answers to these questions and more should be described in a business plan. A well written one will show you that the management/founder has thought about some of these things and is a good sign. The lack of one, and or inability to answer some of these fundamental questions may be a warning flag of structural issues and blind spots that may be deadly to a young company.

The other aspect is the strategic direction of the company and how realistic it is. What are the key milestones the business needs to do in order to
1) get additional finance,
2) get additional customers.
How realistic and what are the risks?

What is the client face? Checkout their website. Does it look like a shampoo commercial but is supposed to be a revolutionary wind energy company? It may be a sign that the founders were too busy on designing the product, or it may be a sign that the marketing needs serious work.

The People
Talk to those working in the company today. Unlike a big corporation where you can avoid Mc.Smelly from the 23rd floor by taking a different route to the coffee machine you will be working with these people very closely. Is it a personality, work ethic, management style match? What are the concerns people express about working for the company? How do they feel about the growth prospects? Are they excited and want to bring you in? Are there pedigrees aligning to the roles they are taking on? This last point is not always a perfect match as a startup has a hard time recruiting the best talent and thus the limited resources need to take on different roles, but if you see someone shy and soft spoken as the main marketing person this may be cause for concern.

The Financials
Unless you are interested in doing charity work and nothing more it is imperative that the company you join understands that it is a business. A Business must generate money and grow and have an unfair competitive advantage in order to defend its reason for living.

What is the secret sauce and can it be quantified? Can the product be scaled? What is the revenue model? How is the Cash? In a small business unless the founder is sitting on an inexhaustible pile of cash, “cash is king” and if it runs out at a critical moment that will mean the end. Thus what is their Monthly Cash Burn? What is their Cash Reach? Etc.


The Risk
A startup is inherently more risky than a large proven company (well except in times of financial crisis when massive amounts of people get laid of, oh wait that just happened). By asking the right questions both quantitative and qualitative you will be able to better understand the nature of the risks.


The Compromise
In some cases a circumstance or need, be it financial or personal, will not allow you to commit full time. Explore your options. It may be possible to do what you want while fulfilling you needs by volunteering, working part time, moonlighting or other creative ways of exploring an area of interest without committing fully until you either can commit or understand that it is right for you.


In Conclusion
I have tried to alert you to some of the things to consider before taking the plunge and making a decision that is right for you but in some cases you just got to take a chance and do what feels right, and if it doesn’t feel right and you end up eating macaroni and cheese for a couple of months or moving in with your parents to carry you over the rough patch it may just be worth the infinite amount of growth and personal reward you will get from pursing what you love and discovering who you are.

In the words of Seth Godinto the question “How can you do it?”, he explains that for some of us its not a choice.
“ The voice in our heads won't shut up until we discover if we're right, if we can do it, if we can make something happen. This is an art, our art, and to leave it bottled up is a crime.”