How’s revision coming along? Hope it’s all going as smooth as it can with the final month checklist being covered.
I’m back at the forum recently after a ‘break’, where I co-founded and ran and exited a business. I didn’t plan on writing about it, but a few members asked me to share my startup experience, and the team at 300 Hours were also very enthusiastic about it, so I gave it some thought on what would be useful for you guys.
In this article I’ve tried to cover most of the common questions I’ve gotten. Hope I’ve done it justice, and if you have additional questions just let me know in the comments.
It was an eventual, organic path, resulting from some soul-searching that happened long before that.
After I completed all my CFA® exams, I was still in a finance job which I enjoyed, but something was missing. “Is this it?” was a common recurring question in my mind, as I personally felt that the concept of having one job in the same sector for life rather limiting.
The ability to continuously learn, experience and apply skills in a variety of sector or role is what excites me. Sometimes, the desire to add real value in a job is quite often dampened by things like bureaucracy and office politics. I did hang on for a few years through job changes (in the same sector), however things felt repetitive after a while regardless of whatever shiny new company I joined.
Isn’t leaving for a startup risky?
While leaving a stable job is a risky proposition, I figured it was worth experimenting with a different sector completely. I was still relatively young, and able to take some risk (i.e. no mortgage, no kids, with 2+ years worth of living expenses saved).
I also rationalised that it is likely to be a cheaper and a more practical MBA experience given that I’ve put some money at stake, which I should hopefully gain some transferable skills and valuable experience even if I have failed.
My initial hope for my startup adventure was to be comparable income-wise to an average employed scenario, which is a tall order in itself as it implies being able to make a reasonable living out of it in my first try.
The options I had, and what I eventually decided to do
Of course back then, I didn’t know what exactly I wanted to do, but I explored for a bit and landed with a few options:
- Lord of the Pubs: starting up a pub chain with 2 established restauranteurs as their CFO. The role involved focusing initially on financing, operations and later on fundraising – being a CFA charterholder helped in my pitch here for sure!
- Hop on the Fintech Bandwagon: join an established startup in fintech (online payments space) as their Product Strategy Manager.
- Start My Own Thing: starting up something small on my own, following my own interests, as well as my strategic analysis on what would be best to position a business in
While all the options were interesting, I decided to go for Option 3. This was in a completely different sector where I had no previous work experience, with a huge learning curve. It started as a side project filling in my ‘CFA-void’, which I worked on after work and on weekends. This is certainly something I’d recommend (don’t leave your stable pay check yet) to minimise risk, but it does mean that you’re working all the time and may risk burnout.
Because of the eventual exit terms of the business, I unfortunately can’t share more specific details, but I may write a separate article on that if there is interest (let me know in the comments).
How it’s like working on your own startup
While I can’t generalise for all startups, working in your own project with significant money at stake is quite different in many ways:
- You’ll need to do everything. It is very hands-on as you set your own path and workload. You’ll need to be a highly disciplined generalist and be able to make necessary decisions with imperfect information to move things forward.
- Your daily decisions can literally mean life-or-death to the business. While it is important to get things done, quite often the key question really is ‘what should get done?’ determines the life and death of a business with limited resources. Decision paralysis is not an option – not making a decision is also a decision.
- It is a lonely, stressful and extreme lifestyle. The emotional roller-coaster is something I have never experienced before, and will likely never experience again outside of the startup world. Your mood swings wildly on a daily basis depending on the success of your company. It took years for me to practice some sense of calm as it can eat you up in the long run given the volatility of a startup business. Having an aligned co-founder can be a lifesaver as it was hard to share and talk about these difficulties with peers in employment. I remember crying alone out of frustration and fear for the future 3 times during the 4 years, which I never did as an employee. The ability to’ switch off’ after work as an employee is certainly a plus!
How the business went, and how I exited
I believe that we executed as well as we could on a small budget (for that sector) – the decisions we took and acted on, in retrospect, were the right ones given the information we had at the time. The industry evolved really quickly in the 4 years we were in action, and while we bet on the right sector and product, larger, more well funded competitors soon started to pour in and catch up. Unfortunately in this sector I was in, scale does matter.
Sensing this inevitable change about 2.5 years in the business, we decided to quickly position ourselves as a potential target for a bolt-on acquisition by a strategic buyer. Over the following months, things got difficult as the focus on repositioning ourselves for sale negatively impacted the business from a cashflow perspective. It got really dicey in the end – if we were unable to find a buyer, we would have to shut the business down and losing quite a big sum of money tied to our inventory. We did have a few suitors and thankfully in the last minute, we managed to secure a sale, after months of intense negotiations and due diligence.
How it changes you
Starting up and running your own business has certainly changed me for the better in terms of broadening my skillset. In a relatively short space of time, I managed to do a bit of everything in great depth: sales, marketing, product design, process design, logistics, customer service, copywriting etc. In fact, the biggest (unexpected) gain for me was being able to sharpen softer skills such as strategic thinking, negotiation, managing people and being able to think from different perspectives. I now have much greater respect, appreciation and curiosity of different businesses I come across daily, as having such a cross-functional experience has encouraged a more open mindset.
However, the startup experience has its downsides: I’m certainly more impatient and intense as a person. The typical gripes of an every(wo)man seem inconsequential and easily rectified compared to the volatile ups and downs of entrepreneurship, which can make it harder to relate in social settings. In other words, I may have become somewhat weirder and more intense as a person.
Where I’m heading after all this
After the sale, it took about 1-2 years away from it for the stress to truly go away and feel more like my old self again. I’m taking a short break from work for now while keeping my eyes open for job opportunities in a few sectors that intrigue me. I’m also continuing to jot down ideas in my little notebook for evaluation – who knows what a future side hustle may lead to?
If you are interested in any particular part of the experience, or have your own experience to share, let me know in the comments below!