Sept 16, 2018/by Matt Wanderer
Living in the Miami tropics sometimes feels like it may as well be another planet. A number of my old friends in CA with whom I have kept in touch over the years, online and some who have recently told me they have had enough with their boring (stable and good) jobs and are going rogue as entrepreneurs to follow business dreams that have been thus far Garageband ambition.
The tricky part about this for me is being the “Debbie Downer” who in good conscience has to revisit the vast delta between my actual life experience as an entrepreneur and the sunny public perception that my friends back home have seen over the years. You know what I’m talking about, while a company will usually post a big win, an award, a contest, an innovation, it almost never publicizes the pain, struggle and constant little fails that in reality make up most days for every entrepreneur I know. With this in mind, I wanted to write something up, not to talk anyone out of quitting their job, but just maybe a little cautionary piece to note how you might avoid or at least minimize some of the significant risk’s that await your life without a boss.
We all know the tendency to post the high points online, from birthdays to weddings and vacations, when’s the last time you saw a press release about someone losing a contract/bid/contest? Never going to happen. That said, most of those who have been close to me over the years and through some fantastic wins have also watched me suffer through some crushing fails. Generally speaking, it seems like people’s memories naturally gravitate to the wins, probably a good thing all around, we humans seem to prefer to talk about and think about the wins. But before you quit your job and leave your safe place to swing for the fence, I want to note at least a way we can minimize risk along the way.
I always try to remind my friends that the vast majority of what I have done in life has not worked out. Truth be told I’m probably 5 for 40 in business success v. failure, nothing to brag about, the losses are awful, they cost real people jobs, sometimes your best friends, they can cost you both your credit and your credibility. I’ve watched people lose their houses, their spouses; you name it… if you really love your idea enough, you can blow through your kid’s college fund in a couple of quarters no problem. A real fail will make you cry.
Once you have earned your first failure, to stand up and try again, even to get out of bed, can feel utterly impossible for some period. For those who manage to rally that second wind, they will from that morning forward, wake up each morning knowing damn well that whatever professional privilege and self-dignity they have managed to earn or regain can disappear again with a few bad decisions, any given Wednesday. I don’t know anyone serious in business who when being honest doesn’t describe a sense of profound vulnerability.
The purpose of this letter is to note that if you are at some level an entrepreneur who IS going into business for yourself, you must be intentional about what LEVEL of risk/reward you need. Struggles and challenges are a part of life like books often note, the bigger the ambition, the bigger the exposure. If you’re committed to starting a business you have the opportunity to put your plan into one of maybe three generic “risk buckets”, you can:
1) Bet it all on the next Billion-dollar disruption (my unfortunate disposition)
2) Find an existing business or system, think franchise or business opportunity that takes most of the innovation/systems/planning and infrastructure risk off your shoulders, or
3) Move into a strong sales job where you can make a fortune, have flexibility in work scheduling and literally not risk a dime. (great salespeople really do have their cake and eat it too)
At the end of the day, we are all salespeople. Some of us sell our ideas to our teams, some of us sell our artwork to the local connoisseur, and some of us carry the actual title of “Sales” and if at the top of our game make more than our bosses.
If you fall into bucket 2 or 3, congrats, you’re going to be just fine!
If you are like me and were born into the high-risk / rebel-change bucket, you’ve got a really tough choice in front of you. You can suck it up and find a way to survive a day job; that will never fully satisfy you (but will keep you safe and dry). Or you get ready for the fight of your life and prepare to go “all-in” for a long period of time, a couple years of which usually can’t afford to pay you a dime.
When a friend tells me they are good with bucket 1 and can’t live without chasing down that monster vision, the next set of questions come into focus easily. The statistics for new business success speak for themselves, a vast majority of ventures will fail in the first year, even more in the second year, and only about 1% will make it to month 36 where you start to appreciate the business you are now actually in.
At age 33, when I went back to business school, in large part to lick my wounds (after losing 140 Million Dollars in the 2008 financial crisis) I was forced to digest a mountain of biographies and business data that generally suggest that the success of a committed and serious entrepreneur how well they get back on their feet following inevitable failures. Before you go all-in, really ask yourself, as deeply and seriously as you are able… Can you survive a loss or two to get to the glory??