STARTUP MANAGING EXPERIENCE: How much do you need?

I received this email today from a recent MBA graduate: "My try on entrepreneurship has not worked out.  I am going back to corporate to gain more experience before trying again later."

That is a wise decision by a person with a long career ahead of him. The situation begs the question "How much managerial experience do I need before joining a startup?"

I can best respond by classifying people as follows:

• Recent College Graduate: This eager person is seeking their first job. They are excited about doing a startup.

• 5 Years or Less in a Corporation: Such people have worked for a large public corporation. They have done work, perhaps with some excellent reviews, gotten raises and may have managed a small group of people for a year or two.

• Recent MBA Graduate: Similar to the 5 Years category and have recently finished their MBA after three or four years of business experience.

• Outstanding Manager: Such people will have a track record of at 5 to 10 years in a public corporation. Their track record shines. They are labeled as top notch, first class, rising star by their former bosses.

• Startup Did Not Work: These are people who joined or lead a startup that has shut down or been sold, one that has not become a success.

So what should such people do when considering "doing a startup?" Here are some things go ponder:

• Recent College Graduate is rarely successful in performing in a new enterprise. They often believe they have a wonderful idea that could make them rich, and succeed like Google. Their lack of managerial skills requires they find a core team to join them and then create a business plan that has a chance of succeeding. Most find working first in a public corporation to be the wisest next move, leaving the startup until later when managerial success is clearer.

• 5 Years of Less in a Corporation people seem to struggle the most in a new enterprise. They lack the outstanding track record and stunning skills sought after by experienced startup leaders. They are advised to keep working on greater achievements as managers before considering doing a startup.

• Recent MBA Graduates often get the startup bug after a few classes on entrepreneurship in school like an MBA online school where mega-buck entrepreneurs were speakers. Most can find jobs below the vice president level in large corporations where they can start on the road to outstanding success as managers of people and then divisions representing complete businesses. The few who find jobs in startups mostly struggle like those of the two categories above.

• Outstanding Managers are very attractive to startups when they seek work at the level just below vice president (Director level in the U.S.). Those who have become Vice Presidents in successful divisions are especially attractive if the corporation has gone public less than ten years ago. They are even more sought after if the corporation was private when they joined and then went IPO.

• Startup Did Not Work Out people have to make a decision: "Should I try a second time? Or should I go work for a large public corporation next?" It is hard psychologically for many to stop doing startups and instead work for a giant. I see lots of resumes with that pattern. A string of not-very-good startups typically follows. They make doubtful next hires for venture backed startups. I think most of this category go on to work in public corporations and succeed there. My email has found a few of them later finding a startup and succeeding that way.

BOTTOM LINE: Picking the right time for you to seek a managerial job in a startup is a serious decision. Managing a startup is special. Lessons from giant public companies do not transfer well to new enterprises. Learning on the job in a startup works better. Your choice of entry point should depend on your track record. Success managing increasing numbers of people in chaotic conditions launching new products will be what startup recruiters are looking for. New enterprises are mostly about the capabilities of their leaders and employees. It is a people game. The stakes are big. So the choices of experienced managers are made with special care. When you can bring the right managerial experience to a new enterprise, you will find no shortage of opportunities. It is your task to pick the best moment in your career to do that. Then when you join the new enterprise you will be a significant addition to the building the startup's unfair advantage.

Comments

[John]

Matt, the key is to be aware when a budding entrepreneur is naive rather than wise. If the former, then gaining more training and experience is advised. The trick seems to be that youth lacks wisdom in how people behave and thus lacks skill in managing them. Ideas are not hard to find, but great managers are.

[Matt*]

Perhaps I'm misunderstanding your point, John, but I don't buy into the idea that the more education and corporate experience you have the more likely you are to succeed once you make that career transition into a start-up. Granted, I am a bit biased since I am an undergrad doing a start-up, but I think some people are just born to be entrepreneurs, others can hone their skills enough to get to that point, and for the rest it just wasn't what they were meant to do.