So you’ve decided that your post-investment banking career lies in the heady world of start-ups. Congratulations – welcome to the light!
Whether you are voluntarily taking the plunge or have been forced to walk the plank, and no matter if you’re about to found the next big thing or join a team, you should take a few moments to mentally prepare for life on the other side.
1. Money, money, money
Let’s start with the obvious. Start-ups aren’t too big to fail, and 75% (or more, depending on your stats of choice) will go the way of the dodo. The lobbying skills you perfected to eek out every penny from your division’s bonus pool aren’t so useful in a company with no revenue. Fifty percent of zero is still zero.
And, with that failure rate, the non-tradeable employee stock options you bemoaned in banking are probably looking pretty sweet in comparison to your sizeable chunk of totally illiquid, start-up equity. That is, unless your banking options were submarines when you left. Worse: Even if your start-up succeeds in getting a few rounds of funding you’ll be nicely diluted ahead of any exit.
Fortunately, converse to what you’ve been indoctrinated to believe, humans are not motivated exclusively by money. It’s actually mastery and a deep sense of purpose that hold the real key to happily jumping out of bed on a cold, damp and dark Monday morning.
2. Perk dearth
Take a minute’s silence to mourn the perks of banking life.
Taxis, entertaining clients at high end restaurants, ‘marketing trips’ to Europe and the accompanying air miles, along with never-ending supplies of stationery (and Blackberries – anybody still use those?) are tough to justify when your start-up isn’t making any money. Investors, if you get any, are going to come down harder on inflated expense reports than a banking division head in a triple dip recession.
Whilst the likes of Google and other successful tech firms have offices resplendent with the perks bankers enjoyed in the good old days, (and many more exciting ones), most early stage start-up teams aren’t dining at Nobu or flying business class. Get used to making your own meals, taking public transport and cost cutting in just about every way you can.
On a more motivating note, you will soon come to truly understand the idiom, “necessity is the mother of invention.”
3. Big title, small trousers
Who cares about that elusive Managing Director promotion now that you’re Chief-Something-or-Other? Congratulations – your business cards are going to look fabulous! However, when you’re a three-person team and you’re all C-Suite, you’re also all de facto interns. It’s your hustle, as opposed to your MBA, that’s going to sort the wheat from the chaff. And, don’t forget, the techies now rule – the tables have turned on that old back-office, front-office divide.
So, if you think stuffing (digital) envelopes, Twitter and fetching coffee is beneath you, this might not be the right career path after all.
4. Rank failure
“Disruptive” isn’t a word you’d have wanted to hear in connection with your name – that could have decimated your bonus! Now it’s a badge of honour.
Unlike in the past, where business-planning sessions looked five years ahead (predicting perennial double-digit growth, obviously), now you’re creating, or rather relentlessly searching for, a disruptive business model fit for the future. In this world of extreme uncertainty, no matter how solid your vision and mission, you’re going to have to continually experiment and test assumptions. A five-year plan is a work of fiction.
You’ll be building prototypes with embarrassing imperfections you’d never have dared show a client in your former life. Expect a fair amount of soul-destroying failure. Just remember: iterate, iterate, iterate.
5. The customer is ALWAYS right
“Stay in front of your clients.” Do you remember that maxim – the one that senior management brayed in the wake of a trading scandal, major layoffs or yet another change at the top?
Notwithstanding the fact that your first biggest challenge is finding some clients (actually, let’s call them users to get with the right lingo), once you do, you’re going to need to stay in front of them every minute of every day. Listen to them, REALLY listen to them, note their behaviour and act on their feedback.
Worship those early adopters like every single one is the founder of a billion-dollar hedge fund. Without them you are nothing.
Good luck – adjusting to these changes and thriving in your new life might take some frontal lobe rewiring, but it will all be worth it in the end. I promise.
Rebecca Jackson is a Brooklyn-based startup consultant and freelance writer who spent almost a decade in investment banking in London and New York. She is currently in the process of setting up a community and website called After Wall St. for former Wall St and City professionals. You can follow her on Twitter @BKLYN_Brummie and @AfterWallSt.