This post originally appeared on LinkedIn. Follow Sallie Krawcheck on LinkedIn. This post is part of a series titled “Behind the Scenes” in which Influencers explain in detail one aspect of their work. LinkedIn Editor Isabelle Roughol also provides an overview of the 60+ Influencers that participated in the package.
I get it. You want to be an entrepreneur. Enough of the drab cubicle or undersized office. Enough of the super-long meetings with the formal agenda. Enough of the – ugh – corporate cafeteria. On to the exposed brick walls, casual wear and foosball tables. Oh, and eventually becoming a zillionaire.
I’ve made the switch from corporate executive to entrepreneur. Before you do it, it’s worth recognizing that it can be a very tough move, and being an entrepreneur can be a very tough undertaking. In fact, I tell anyone who asks that being an entrepreneur is tougher than running Merrill Lynch. That’s not to say it’s not an unbelievable experience… but it’s not for everyone. Here’s how to make the switch.
First, the practical. Do you have enough money to support yourself? As the founder of a start-up, it’s not about how much cash you can make, but how littleyou can make and for how long. Firstly, that cash can help the business to be successful; and, secondly, if you are going to be successful, the value of that dollar working in the start-up is worth massively more than in your bank account. So before you make the switch, do the math and shore up the bank account.
Then there’s the soul searching you need to do. Are you after the idealized portrait of a start-up? Or do you really want to build something and create something from nothing? Are you so passionate about the idea that you’re ready to go all-in? This takes being deeply honest with yourself about what motivates you and how you best operate. Do you live for the feedback in the formal year-end review? Forget it; the market is your review. Boss choosing work and setting deadlines for you? Nope. Procrastinator? Not good. Like to spend half the day at the water cooler complaining about your colleagues or comparing notes on last night’s game? You’re doomed.
That’s because you can make a number of wrong decisions or have a batch of “I’m in a coasting mood” days at large companies. If you’re not pulling as hard that day, someone else likely is. And if they’re not, that 15% profit margin on those billions of dollars of revenues absorbs some good number of mistakes. A cash burn-rate counted in months means you can’t make many mistakes that take months to correct.
And, at smaller, hyper-growth companies, everything matters. Again, at a large company, you never want Joe-the-talented-up-and-comer to quit. Ever. But if he does, it’s going to be some time for the loss of that one guy (out of 1,000 or 10,000 or more) to hurt the p&l. At a smaller, growth company, everything matters… and everything matters pretty quickly. I remember when I ran Bernstein: of our 18 research analysts, if one left, there was an immediate, direct and negative impact on the p&l.
Thus, it takes a certain mindset to be an entrepreneur. Someone who is a self-starter, passionate about a business, optimistic (some even to the point of marginal delusion), who can handle the heat and the stress. Someone who can let go of corporate trappings and pageantry.
And, to be successful, it helps to be someone who is ready to go “all in.” That can mean drawing on what you’ve built, such as your network. I’ve met any number of people who’ve told me that they view calling on their networks for funding and introductions to potential customers as “cheating.” (Yes, I’ve really heard this… quite a bit, actually.) Well, strong networks have been shown to be one of the key differentiators of success for entrepreneurs. And getting to success can mean going all in emotionally and risking failure and rejection. Because you will fail; it’s just a matter of what you fail at and how quickly you recover. And you will be rejected; it’s just a matter of getting past the rejections.
Not quite there? Then, if possible, put a toe in the water before taking the plunge. I spent time with entrepreneurs, advising them both formally (as part of their advisory boards) and informally. They got access to the expertise I had built and I got to “test drive” the idea of working outside of corporate America.
Sallie Krawcheck is the Chair of Ellevate Network (formerly 85 Broads), the global professional women’s network.