Straight Truth: Do You Have What It Takes To Start Your Own Company?
Straight Truth is a series where I take people’s hard questions and answer them in as direct a manner as possible, cutting through the polite fiction of larger workplaces. Jobs and careers are not as “fair” as we hope. I cannot give you justice at work, I can give you the truth as I see it.
Today’s reader question is:
“To progress in my career, what are things to consider in deciding between moving up in the same company, changing levels into a new company, or creating my own company?”
Most of us want career progress. This reader asks about the options to get it. Of course, there is no one perfect answer to this question, so let me instead list the factors.
The ultimate way to “move up,” IF you can do it successfully is clearly to found and grow your own company. It is an instant promotion to CEO with no interview, followed by a rise to as much scope, income, responsibility, and impact as you can create. Elon Musk, Jeff Bezos, Zuck, and all the other tech giants followed this path and they are now amongst the wealthiest and most influential people in the world.
There is a long list of things that go into that “IF”
Do you have a winning idea / business?
Do you have the risk tolerance to strike out on your own?
Do you have or can you get the money?
Do you have the skills to lead your company?
Note that this is a wide pool of skills. Fundraising. Leadership. Sales. Hiring great people to support you. If the idea is technical, the right technical insights.
I expect commentators on this thread to go wild with both all the other skills you need and also how you can bring people alongside yourself to aid you. That said, the bar to being a successful founder is very high. At the same time, it is a straight route to the biggest chair in business.
I have founded businesses, joined startups very early (employee #6 twice), and worked in large companies.
All have their benefits:
My career shot forward fastest in the startups. The rapid growth coupled with the freedom to expand my role by simply taking on things that needed to be done led me to COO-type broad management positions quickly.
My pay and real scope shot forward fastest at Amazon. From day one, Amazon paid me more as a Senior Manager than I made in any of the three startup VP roles. Had those startups been unicorns, the stock might have paid off, but even though all were acquired, none generated big paydays. My largest team in a startup was about 30. Over time at Amazon, I became a VP with 800 people on my team.
My happiness has been highest working for myself. I get to work when I want doing exactly what I want most of the time. The joy of being able to work on what I believe in doing is hard to describe. I feel “pinch myself” lucky most of the time.
Your experience, of course, might vary.
I’ll address the “same company or new company” part of this question another time.
For today, let’s let the comments fly on “what it takes” to be a founder.
Audience Insights
As will be the case with all posts in this series, I first post my answer, above, on LinkedIn, and then my audience comments. I have consolidated additional ideas worth considering, including:
The #1 thing to consider when deciding to start your own company: are you a missionary or a mercenary?
If the motivation to start your own company is to progress in your career (“to be the CEO”), then you are a mercenary.
Missionaries start a company based on meaning. Then they work backward to build a great product/service to delight customers.
Investors gravitate towards missionaries because when times get tough (and they will), it is the higher meaning that drives you and your team to overcome it. There are many stories of investors and employees who have passed on a founder because "they are a mercenary and will flip when times get tough."
The phrase “a startup is like building a plane while flying” is popular because it is true. Current and past founders have shared the following “what it takes” traits:
Obsession with solving customer problems (the mindset “I will build it and customers will come” rarely works).
Extreme grit, perseverance, and sense of ownership.
Being described as a “cockroach founder or startup” is positive because it means you are hard to kill (aka you can survive).
Adaptability and being unafraid to pivot when needed. Not getting stuck in the sunk-cost fallacy and being able to make decisions with new and limited information.
Ability to execute at speed (ideas are cheap).
Comfort with rejection.
“The Conquistadors, when they arrived in the Americas, they burned their ships. Why? So there was no way except forward.”
Founders have high-risk tolerance.
Be honest with yourself if you have the risk tolerance. To be transparent, I did not take the “burn your ships” risk myself. My approach was (a) make enough money to retire then (b) found my dream business in a way that took almost zero capital.
Running your business is a double edge sword. Freedom of choice also means having to make choices (and sometimes very difficult choices such as pivoting the business, laying off the team, or taking a reduced salary).
Startup founders are like Swans. Above the water, things seem calm and graceful. But, below the water, they are frantically paddling to stay afloat. Part of the reason is founders feel constant pressure to appear in control and that “things are up and to the right” to portray confidence to investors, the press, their team (so people do not panic and quit), and customers.
Submit Your “Straight Truth” Question and Vote
Click here to submit your question or vote on questions you want me to answer.
To see if I have already addressed your concern, please look at past issues of this newsletter - you may find what you need!
Online Course - Level Up: Breaking Through to Executive
If you want a window into the skills an executive needs, which are part but not all of the skills a founder needs, that is the topic of my course, Level Up: Breaking Through to Executive.
[Event: In-Person & Online Webinar] - The Art Of Scaling Yourself: Fuel Your FY2024 Leadership Career Strategy
Date: June 15, 2023 (Thursday)
What: Executive coaches - Ethan, Mounica, and AJ will answer tough career questions (followed by Q&A for in-person attendees):
How do you scale yourself without your abilities becoming personal liabilities?
How do you close your leadership gaps by exposing your blind spots?
How do you intentionally act and respond without falling for distracted shallow thinking?
In-Person registration, click here.
Online Webinar registration, click here.
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Level Up is a newsletter from former Amazon Vice President Ethan Evans that breaks down how he succeeded and how you can get to the next level. If you are not already a subscriber, sign up to receive it directly in your inbox.