When I hear executives and professionals in larger businesses talking about their dream of going out on their own to start a new company, I always cringe. I have been there and done that. They and I never realized how hard it is to break the big-company habits and conventions. If you are going to do it, don’t wait too long. The longer you wait, the more traumatic the decision will be.
First, the list of excuses for waiting gets longer and longer over time – need to work on my resume, broaden my experience, enhance my skills, save a larger nest egg, and maintain a stable income until the children are gone. Second, the list of non-entrepreneurial habits that you pick up in a large corporation gets bigger and harder to break. These include the following:
- Executives rely on staff to do the real work.Leaders in an enterprise soon forget how to write contracts, manage cash flow, or even how to schedule their own time and events. It’s easy to grow accustomed to saying “My staff will contact yours to work out the details.” In a new business, that luxury isn’t affordable, so key things may never get done.
- Professionals get dependent on big company perks.They assume that every business role comes with health insurance, a subsidized retirement plan, and maybe a company car or first-class travel. The longer you wait to start your own business, the higher the default burn rate, and the less happy you will be to take a financial step down.
- Expect to manage the team rather than be a part of it.In a new business, you are an integral part of every team, and the only member of many. Managing is not considered part of your workload. That’s a whole different mindset and skill set from the one you learned in a big enterprise. Small businesses require collaboration and walking the talk.
- Relish being the expert within a limited vertical domain.Entrepreneurs need to enjoy being a generalist, rather than a specialist. In a new business, there will not be an IT team to configure your computer, a procurement department for supplies and contracts, or even a personnel specialist for hiring and firing. You must be all of these and more.
- Rely on training courses and coaching for new roles.In a startup, you can’t afford to spend the time or the money for out-house training, so self-learning from the Internet and unpaid advisors is the norm. There are no in-house experts or training organizations to rely on. Thus big-company executives tend to under-estimate learning costs in a startup.
- Ability to attract top talent and offer near-term compensation.Entrepreneurs find it much harder to attract equity partners, compared to offering a premium salary to industry experts and people with highly relevant experience. Betting on the future is never as attractive to most professionals as an existing successful company and real cash today.
- Measure their worth by the size of their office and salary. Even the best new business owners often take no salary for the first couple of years, and use a cluttered back room for their office, if they have one at all. After too many years in a big company, that’s an unacceptable step backwards for many. Self-worth and self-confidence suffer.
- Social status becomes tied to recognized brand or role.Once you work for a prestige brand or carry a big title, it’s hard to be associated with a tiny business. Your extended family and social friends may still expect you at the country club, or ask you to join them on international vacations. Even your spouse won’t understand the new social norms.
So when is the best time to make the leap from a big corporation to a new business? My scan of the literature and talking to investors would indicate a few years of experience in a large organization (two to five years) is a good thing, while twenty or more years before founding your own venture will stack the cards against you.
Unless you are really young at heart, if you haven’t made the leap by the time you are in your early 40s, those habits you have picked up with your experience in a big company will be evident to you, your team, and to investors. Not to mention the fact that if you are accustomed to a big-company culture and lifestyle, you will likely not be happy or never risk the step to a startup.
So if you really want to start your own business, don’t wait too long. Old habits die hard, so the longer you wait, the harder it will be to make the jump, and your odds of success go down. In addition, if you change your mind, going the other way is always a lot easier.