There are hundreds of thousands of talented professionals that have latent entrepreneurial capability whose inner voice is being muted by corporate constraints. As a venture capitalist, I back experienced professionals who often spin out of the corporate world and start-up their own company. I call this group of new businesses ‘Spin out Start-ups’ (SOS).
There is another option
People are naturally worried about what will happen if they jump the corporate ship. There are ramifications for their family, personal life, and of course the consistency of their income. But – successful entrepreneurs take what I call ‘a calculated leap of faith’. They weigh up their options, identify the risks, and take steps to mitigate them. I wouldn’t encourage anyone – no matter how good their idea is – to jump ship and start up completely cold. It’s far too risky. Map out your way into entrepreneurship and prepare yourself for a completely different lifestyle.
Those that take the ‘calculated leap of faith’ rarely regret it. I recently asked my Ivy Gate team, an estate agency that we launched three months ago, if they would ever go back to employment. They told me I’d have to drag them back kicking and screaming. Indeed, this is the reaction I get from most of the entrepreneurs who I liberate from corporate life. Once they have that freedom over their own destiny they never want to give it up.
Timing is everything
People that find themselves in environments so structured that their ideas are not able to be nurtured should consider their position – because if they stay too long – they could end up losing their creative spark. Moreover, people that leave it too late reach that point in their life where they’ve become comfortable and won’t take the risk.
The people I back almost always range from their mid-thirties to early forties. This is the age when you’ve got 15 years of good experience behind you as well as the stamina to set up on your own. It’s also the point in their life where they’ve been in a corporate long enough to realise that it’s always going to be the same and their job is never going to create the nest egg they long for.
Entrepreneurship needs to be well orchestrated. It can’t be a ‘knee jerk’ reaction. You need to find the risks and de-risk them. One way of doing this is to find a co-founder. Startups formed from a team that has worked as a cohesive unit in the past tend to be the ones that are the most successful going forward. There isn’t that issue of getting a new team to gel as it already exists. The other way to de-risk is by starting your business with a pipeline. Businesses that start with an active pipeline have a higher chance of getting through the initial 12 months, which is the period that has the highest failure rate. Not having a pipeline often means a long lag in income generation, which is demoralising for everyone involved.
Put together an action plan
An action plan should be used to help you play out the situation in your head. Ask yourself where would you go, where would you be sitting, what your day would look like, and who would be advising you. You then start to identify the key pillars of your strategy for spinning out of the corporate.
Find a mentor
I never advise new entrepreneurs to do it alone. You should try to find a mentor or a strategic partner. Your mentor should ideally be someone that’s a successful figure in your industry, who can fast track your business. Look for someone that can provide capital, knowledge and expertise. Someone who has long standing relationships and can pick up the phone and open doors for you. And someone who has made the mistakes and had their hand burned. Seeking advice from people that have failed a few times can help you to avoid making the same mistakes and will de-risk it for you. After living the formative years of my life in Los Angeles, I subscribe to the Californian mantra that ‘failure is a badge of honor’, so I would add this to the top of the list of credentials you would look for in a mentor or strategic partner.
You should go about finding a mentor in the same way you would search for a new client. You need to build a long list of targets, approach everyone on your list and shortlist the ones that are most appropriate. I advise entrepreneurs to find a mentor that would be prepared to invest in your business. This aligns interests and keeps everyone working together toward the same end game. Your mentor could be an angel investor (often retired entrepreneurs or executives), a venture capitalist or a first time mentor that’s interested in investing. There are plenty of people that have done the same thing that you’re looking to do – so reach out to them.
Talk to people
Entrepreneurship is a psychological journey. Even though you may feel like it when you’re stuck in a rut, you’re not alone. Your colleagues may feel exactly as you do and may even want to join you. And having a close business partner provides you with someone to share your feelings with. You want to have someone who loses sleep over your new venture when you do, and you want to be able to talk about it with them the next day.
You also need to be talking to someone on the outside that will potentially be your launching pad when you spin out and start up. That individual will act as a sounding board for you as you make key decisions to leave your job and become an entrepreneur. There are serious mindset and lifestyle changes to consider which often lead people to procrastinate. Don’t sit around twiddling your thumbs; talk to people who have been through it before; it will speed up your transition. People leaving career-stunting corporate jobs to launch new (sometimes world-changing) ventures is not a new thing, so the veterans are definitely out there. Seek them out.
There is significant entrepreneurial talent (and potentially billions in economic value) locked up within SMEs and corporates in the UK. These ‘would-be’ entrepreneurs are seasoned, they’re less likely to make mistakes, and they have established networks. People with disruptive or innovative ideas that are being drowned out by the corporate voice should be provided with the platform, funding, and the mentoring to create something that’s new and different. It’s the natural way for industries to improve, evolve, and grow. Remember, the founders of Google could have taken a corporate job with Microsoft but they decided to take the risk and now they’ve created more than £300 billion of economic value, as well as becoming billionaires personally in the process. Who’s to say that there aren’t individuals in the corporate world that made the wrong decision all those years ago and they’re actually sitting on a billion dollar idea. Send out an SOS, you never know what might happen.