Sometimes, it’s very hard to choose between an entrepreneurial career and a corporate career.
We tend to think that choosing the one precludes the other, and we tend to think that this choice is permanent. I can see how someone leaves university and enters the job market, perhaps working his or her way up over time from a clerk to CEO. I have friends who’ve done this and its not only paid them very well but they’ve learned lots and had fun along the way. I can also see how one starts a business, grows it, sells it and starts another, and how this pattern can repeat over the years into a successful entrepreneurial career, where you also make good money, have fun, learn lots and perhaps even manage a passable work to life balance. The reality is that there are many people who flirt with both choices, moving between entrepreneurial states and corporate states depending on their outlook and challenges at the time.
Bob Dylan said “you have to serve somebody” – whether this is a client or your boss if you’re doing this with the energy that success requires then any notion of reasonable working hours is quickly lost, and suddenly being an entrepreneur seems to come with less freedom than being a corporate.
Then there is the risk: entrepreneurs take on a lot more of it. This point was made to me years ago when I worked with an international strategy consultancy: a friend and I compared what we earned as employees (paid in USD) to what our entrepreneurial friends earned and we made substantially more. When we adjusted for risk, it was clear immediately that we were streets ahead – we’d have to really screw up to get fired and there would be plenty of places willing to have us if we decided to leave, while our entrepreneurial friends could lose it all in an instant.
It’s useful to think of entrepreneurs in 2 categories: (a) ‘real’ entrepreneurs who build businesses where they employ others in a corporate structure and build up an ‘asset of value’ which they can sell later on, and (b) those who call themselves entrepreneurs but in reality are just self-employed. For someone who wants to grow a business, they have to transition from being self-employed to being an entrepreneur. It’s a huge shift and while in this state they are very vulnerable to corporate offers.
Recent events got me thinking about this again: a supplier of mine provides excellent service around online marketing, particularly SEO and SEM. There are many such providers in the market – it’s a field where you can quickly become reasonable but expertise still takes your 10,000 hours. My supplier is in the latter category, but over the past 3 years she has constantly struggled with the choice of whether to grow her business. She does excellent work and has earned well. Over the last few years she’s done a lot of work for a large corporate client who’ve paid her well and given her more business. Having stepped back from the decision to grow her business a year ago, she’s got to the position where she has to grow in order to service the demand from her other clients.
Of course, no sooner does she make that decision than her large corporate client makes her a very attractive offer to join them full-time.
So there is a period of extreme angst where she continues to work with this client who continues to hound her. Each time she definitively turns them down they respond with a bigger offer. (This is a nice position to be in). The offer isn’t quite as much as they pay her as a consultant now, but she’d work fewer hours (it would also be easier work) and of course she could have a paid holiday. Like many entrepreneurs she hasn’t taken leave for over 2 years, so the idea of being paid to be on leave becomes attractive. Then there are a whole bunch of benefits they throw in, and then we she finds a way of handing over her current clients so to someone whose work she trusts. She is still undecided.
The turning point comes when she realises that joining a big corporate means that she is going to gain all the perspective of the needs of that market from being within it. In other words, if she ever wants to go back to being an entrepreneur she’ll have the credibility to service bigger clients at a higher rate, which is the core of what she needed to do to grow her business as it stood. In the meantime she gets paid to learn, can manage a team that someone else pays for, and doesn’t have to worry about where the next client is coming from.
The result: a few months in and she misses entrepreneurship, but not nearly as much as she expected…now she just needs to get her head around driving to the same office each day…