Transitioning to Entrepreneurship
An Overview of Entrepreneurship as a Career
This email is Chapter 1 in my free 22-page guide on "Transitioning to Entrepreneurship", outlining how professionals discover startup opportunities and become full-time entrepreneurs. (If you want the full guide just hit reply and I’ll send it to you).
The most ambitious young professionals are leaving their jobs to search for (and find!) opportunities to launch their own startups.
In this chapter I give an overview of what you can expect from this exploration process - how long it typically lasts, what sort of work it entails, the types of startup opportunity you’re likely to find and what success looks like.
How long does it typically take to find a startup opportunity?
TL;DR everyone is different, but give yourself a year.
For some, their whole career has been building toward entrepreneurship. What they studied at university (if they studied), the jobs they chose: everything has been with one eye on finding a business opportunity and ultimately launching their own business. This was my path and is the path of many that I coach.
For others, and for the remainder of those that I coach, the entrepreneurial urge has grown over time. Often they have worked in a specific field and grown weary at the slow pace or lack of change. Perhaps they got a taste of entrepreneurship on a project or trying out a business idea. Their peers may have launched a business and inspired them to try for themselves. Or maybe they’ve just seen how the world is changing, with both increased opportunity for entrepreneurship (from creator type businesses in the passion economy, an ever growing number of online business models and possibilities to design your own job, through to record amounts of VC investment and support for early stage entrepreneurs) and increased risk of not pursuing entrepreneurship - with the world of work and traditional jobs in perennial flux.
Regardless of your particular origin story, at some point you have to enter the fray and go out on your own.
Some people have business ideas that work out from the get go. Or they don’t work out, but they bounce into something else.
For many others, that’s not the case. Maybe they had ideas, but they didn’t work out. Or they are just sick of waiting for inspiration. They want to be entrepreneurs and they believe that they can find an opportunity - they feel it in their bones.
For these deliberate entrepreneurs, most want to know how long they can expect to be hunting before they find a good idea?
Well, on this question, it all depends: what type of opportunity are you interested in, how skilled are you at discovering and assessing opportunities, how high are your standards, what conditions do you have and how lucky are you feeling… Some people find an opportunity in a couple of weeks (at Entrepreneur First (an idea stage accelerator program where I previously worked coaching founders), they consistently churn out VC-backed companies in a couple of months), for others it takes years. However, I don’t think that’s the right question!
I think a better question is: how long until I am able to work sustainably as an entrepreneur, getting paid as I test ideas?
It doesn’t really matter how long it takes to find the idea that “works” if you can keep trying ideas indefinitely (and this is really the best way to find ideas). So let’s explore this question.
Getting to sustainability: a 1 year entrepreneurship MBA
I believe that it is practically possible to work as an entrepreneur almost from day 1, but it takes a bit of time for you to realise and accept this.
One year seems to be the magic number.
I’m not saying it takes a year to learn how to work sustainably as an entrepreneur, but giving yourself a year creates the right conditions and mindset to do the needed experimentation. Give yourself permission to take a year “off” the career ladder.
One year also gives you enough time to experience both the highs and the lows of entrepreneurship. Only through this experience can you become confident that you both can and want to work sustainably as an entrepreneur.
On the flip side, exploring ideas is emotionally draining work. It's different to the work most professionals are used to, in that there are short periods of intense work followed by longer periods of low intensity work where it can feel like you're going nowhere fast. These periods are necessary to the exploration process, but that doesn't make them any less difficult to endure. There is a limit to how long one can do this type of work, and again one year seems about right for an upper bound.
You don’t necessarily need one year’s worth of savings (see Chapter 2 regarding financing your search) or to plan not to do any paid work for a year, but do plan to commit one year to this process.
Regardless of where you’re starting from, it’s important to manage your expectations.
10 years ago, I left BCG with 3 business ideas and dreams of entrepreneurship. I barely lasted several months before running back to the safety of a full-time job. It wasn’t until 2 (long and painful!) years later that I plucked up the courage to go out on my own again, giving myself a year “off” traditional work. That was 6 years ago, and I haven’t looked back since. I’ve discovered and tested 20+ business ideas, grown 3 from zero to $1m+ revenue and raised $4m+ in VC.
The difference between my failed and successful attempt at entrepreneurship can be summed up in one word: mindset. And at the core of mindset is realistic expectations.
You probably won’t find a billion dollar idea in week 1. You probably won’t even find an idea that you’re 100% excited about in year 1... But, you probably will find several ideas you’re curious to explore. You probably will find an idea that has enough potential to pursue further. You probably will have several opportunities to raise money. You probably will find a cofounder or people you enjoy working with. You probably will learn how to make money, be it as a freelancer, testing other people’s ideas, from investment or grants, or directly from your own business activities.
If you begin to view entrepreneurship as a long term career path rather than a short term dash, then you’re more likely to maintain the right perspective, stay in a positive frame of mind, make the right decisions and ultimately be successful.
The work of exploration
TL;DR test ideas and find new ideas to test
In Chapter 3 I discuss how people find ideas in more depth, but I think it’s important to give an overview of what people actually do when working as exploration stage entrepreneurs.
What do deliberate entrepreneurs actually do?
The two main activities of deliberate entrepreneurship are to test ideas and find new ideas to test.
However, this doesn’t happen in a vacuum. Generally, deliberate entrepreneurs face a balancing act of spending time testing their own idea or ideating with a cofounder, possibly in conjunction with freelancing, or spending some months full-time getting paid to test someone else’s idea.
The key considerations are how much time to devote to searching and testing (see Chapter 2 on whether you should explore opportunities as a side hustle, or make the leap to full-time search mode) and whether you want to work alone or with a potential cofounder (see Chapter 4 on finding and working with a cofounder).
If you were told to sit down and come up with business ideas, what would happen? Most likely, you’d come up with a bunch of ideas, all of them bad.
Good ideas tend to be spotted by and form in the subconscious, starting as little more than a sense of curiosity, and only with time and attention are they matured into something meaningful.
Finding new ideas entails maximizing the exposure of the subconscious to potential ideas (interesting problems & stimuli), and maximizing the quality & speed of idea incubation in the subconscious mind (through conscious exploration, ideation frameworks and cultivating an entrepreneurial mindset).
“Empirically, the way to have good startup ideas is to become the sort of person who has them” Paul Graham, Y-Combinator
Testing an idea
There are many frameworks for ideating and testing startup ideas, but Steve Blank’s Customer Development process is the most widely taught one. At a high level, this is a hypothesis driven, iterative process of understanding customer needs and validating these (often with a MVP) before investing further in a startup opportunity.
Customer Development entails:
Customer discovery: in-depth customer interviews, where you gain a thorough understanding of and validate their needs
Customer validation: validating the business model by launching an MVP. Try and build an MVP and see what happens as you try to build it, then try and launch the MVP in the market and see what happens as you try to sell it!
Most of your work will be spent on these two tasks - finding and speaking to potential customers, and building & testing MVPs.
When sh*t gets real: go/no go decisions
It’s one thing to find and test ideas - but what then? One of the most critical aspects of entrepreneurship is deciding which opportunities to pursue, and which to kill. Every opportunity entails risk: ultimately, a good entrepreneur is a good risk taker. What’s a good risk, what’s a bad one? No one else can make that decision for you. Getting comfortable with taking risks is a matter of experience - the sooner you start making these decisions, the sooner you start making good ones.
The goal of this section was to give an overview of what deliberate entrepreneurs do, but of course it can only paint a broad picture. Every business is different, every entrepreneur is different. A key determinant of the type of exploratory work you do will depend on the type of business opportunity you’re looking for.
What types of opportunity do deliberate entrepreneurs pursue?
TL;DR all sorts
When most people think of entrepreneurship these days they think of VCs and raising money from investors. It can sometimes feel like it’s easier to raise money than to make money. While there is a record amount of investor capital available for massive market, high growth businesses, there are many other types of opportunity out there too - from bootstrapped SaaS businesses to designing your own job or working online as a creator. I’ve tried most of these - freelancing, affiliate marketing, bootstrapping, VC-backed startups and now working as an independent coach in the passion economy.
There are many different types of business to choose from, and the Deliberate Entrepreneurship process works for all of them. Examples include:
Self-employed / services / freelance: ambitions to work independently
Solopreneur / creator: ambitions to own all aspects of the creative process
Bootstrapped: ambitions to build a successful business on your own terms
VC-backed: ambitions of becoming a $billion+ business
You don’t need to know with certainty upfront exactly what type of business you want to build (although there are strategic benefits if you do know), but it is important to realize that it's your choice, you get to decide this!
While not binary or mutually exclusive, whether you expect to earn your next money from a customer or from an investor will lead to different exploration strategies and mindset. If you can commit to only looking for a VC type idea, then you can begin to network with VCs, potentially accept “pre-idea” deals and access accelerator supports. On the flip side, if you know you’re not limited to VC ideas, then you suddenly have access to many more potential opportunities and can define your own criteria and constraints.
The process of deliberate entrepreneurship allows you the opportunity to try on multiple different types of business and see what’s the best fit and most exciting for you.
What does a successful deliberate entrepreneur look like?
TL;DR an entrepreneur
Success is personal, and everyone has different definitions of what they consider success. However, I think it’s useful to consider how the deliberate entrepreneurship process plays out for most people over the course of a year or so.
Some people successfully decide that entrepreneurship is not for them. They go back to their previous career (more confident in the knowledge that that is where they want to be) or get leadership roles in someone else’s startup.
Some find and commit to an opportunity. They work full-time building it, perhaps raising money. Whether or not the business succeeds, they learn what it takes to get a business off the ground, what it feels like to go all in and launch something. They begin to build credibility as entrepreneurs - both to themselves and others.
Others find and test multiple opportunities but do not find any idea worth committing to within the first year. Some ideas seem exciting but end up not being viable; others end up being viable but not exciting. Yet they still want to work as entrepreneurs. They’ve seen that entrepreneurship is a learning process: with each opportunity you explore, you get better at assessing and testing opportunities. You become more confident in your ability, more clear in what you’re looking for. You become an entrepreneurial leader.
In my mind, success as a deliberate entrepreneur is to be confidently and sustainably working as an entrepreneur, in whatever form that takes. Entrepreneurship is a lifelong career, sometimes you'll be deep in a brilliant idea with no time to stop and breathe, and other times you'll be scratching your head wondering what to do with yourself. I’d prefer to be confident in my ability to earn money without depending on a job, with the time and creative freedom to continue exploring opportunities, than to be tied to an idea I’m not excited about. Developing the capability to test ideas, realizing failure is OK (at an experiential level, not just intellectually) and gaining that inner confidence that you’re on the right path and that you’ll find something eventually: that can only come about by working as an entrepreneur.
At its core, success is the realization that you are doing it. No longer are you dreaming about what you know is possible. Now you’re actually out there, making it happen. Now you are an entrepreneur.