Fellow,
Arthur & Toni Rembe Rock Center for Corporate Governance at Stanford
University
How I
Became Unfit for the Corporate World
I
was 33 years of age when I became an entrepreneur. I had developed a
revolutionary technology at NY-based investment bank First Boston that IBM
offered to invest $20 million in—provided that we spun this off into a new
company. I was asked to take the job of chief technology
officer.
I
didn’t come from an entrepreneurial family, and I had no entrepreneurial
aspirations. And I had a wife and two children to support. Taking this would
entail relinquishing a great job that paid a hefty six-figure salary, for a
startup that could easily go out of business—and that paid less. So it wasn’t an
easy decision. Nonetheless, though I don’t know what made me do it, I took the
plunge.
We
grew the startup, Seer Technologies, to 1000 employees and $120 million in
annual revenue in a short five years. Then we took it public. The I.P.O. was
fun, but the experience afterward was like a nasty hangover. The excitement was
gone. I got sick of the big-company politics and the obsession with meeting
short-term revenue goals. I wanted out.
Microsoft
tried recruiting me and would have offered stock that was worth a fortune, but I
could not stomach the thought of working for another big company. So I chose to
start my own company. I was 40.
I
realized that, after tasting entrepreneurship, I had become unfit for the
corporate world. There was no turning back. The only regret I had was having
wasted my life in the corporate world for so long.
Some
people say that my transformation was a fluke—that entrepreneurs are born, not
made. They also say that successful entrepreneurs are young. I have had heated
debates with venture capitalists who claim that they know an entrepreneur when
they see one. It’s the kids who sell lemonade or start dog-walking businesses
while in primary school. And some VCs pride themselves on their abilities for
“pattern recognition”. I doubt that I would have fit the
pattern.
The
majority of successful entrepreneurs don’t fit the pattern
either.
How
do I know? Because I've worked with leading academics to research
this.
After
my health suffered with the stress of running my own company, I had to switch
careers. But I still couldn't go back to the corporate world. So I became an
academic. And this is one of the first subjects that I
researched.
My
team surveyed 549 successful entrepreneurs. We
found that the majority did
not have
entrepreneurial parents, and had felt no stronger entrepreneurial aspirations
while going to school than I had. They
started companies because they had become tired of working for others, had a
great idea they wanted to commercialize, or woke up one day with an urgent
desire to build wealth before they retired.
We
found that 52% were the first in their immediate families to start a business—
just as were Bill Gates, Jeff Bezos, Larry Page, Sergei Brin, and Russell Simons
(Def Jam founder). Their parents were academics, lawyers, factory workers,
priests, bureaucrats, etc. About 39% had an entrepreneurial father, and 7% had
an entrepreneurial mother. (Some had both.)
Only
a quarter caught the entrepreneurial bug when in college. Half didn’t even think
about entrepreneurship until then. There was no significant difference between
the success factors or hurdles faced by entrepreneurs who were extremely
interested in entrepreneurship in school (and who likely set up the lemonade
stands) and the ones who lacked interest. But entrepreneurs with extreme
interest started more companies and did it sooner. Of the 24.5% who indicated
that they had been “extremely interested” in becoming entrepreneurs during
college, 47.1% had gone on to start more than two companies (as compared with
32.9% of the overall sample). Sixty-nine percent had started their companies
within 10 years of working for someone else (as compared with 46.8% of the rest
of the sample population).
Family
entrepreneurship, prior interest, and extreme interest had had little bearing,
then, on the successes. So what did bear on them? Education did—but not which
college they had graduated from. In a different study of the 652 CEOs and CTOs of 502 successful
tech companies, we researched the correlation of education with the sales and
headcount of companies founded. We learned that companies started by founders
with just high-school diplomas differed significantly from the rest. Education
provided a huge advantage. But there wasn’t a big difference between firms
founded by Ivy-league graduates and those founded by graduates of other
universities.
We
also found that, in the tech world, older entrepreneurs are the norm—not the
exception. Our
research showed that the
average founder of a high-growth company launched his venture at age 40. We also
found that these founders were likely to be married and to have, on average, two
or more kids. They typically had six to ten years of work experience and of
practical ideas. They had become tired of working for others, and wanted to rise
above their middle-class heritage.
So
if people tell you that you’re too old to be an entrepreneur or have the wrong
background, don’t listen to them. Go with your gut instincts, and pursue your
passions. You’ll wonder, as I did, why you wasted your time working for that
jerk boss.
You
can find more of my articles on my website: www.wadhwa.com and follow me on twitter:@wadhwa
