Compare managing in a startup to that in a large corporation to boost your chances of launching a successful startup.
Let's look at the twins, Uncertainty and Wealth. Then we'll examine the so-what for you the startup leader.
Startups are very risky, very likely to close the doors in a few short years. They have lottery odds of getting to a successful initial public offering. They must grow at nearly explosive rates of expansion in order to reach a much higher level where the risk is much lower.
In contrast, large corporations are high in certainty, expected to continue existing indefinitely. They grow very slowly, with three percent a year growth considered a fine year.
With the startup's high risk comes the potential for huge financial wealth as a personal reward. The dollar amount is so high that it is staggering to comprehend. In less than a decade, a founder CEO can become a billionaire and the first twenty employees very rich.
Large corporations grow very slowly. The executives make a lot of money by incrementally increasing the size of an already huge business. Employees have to climb a ladder to a very narrow top. Along the way, most make most of their money via wages and cash bonuses. Few ambitious employees achieve rank of the top executives. Most settle for earning less than a million dollars a year, typically in the hundreds of thousands of dollars as a middle level manager, perhaps of a large group of people responsible for a family of products.
Because of the staggeringly high risks and immense demands for rocket propelled growth, serial entrepreneurs have learned to be very careful who they hire. Accordingly, here are some of the things they look for in potential employees for their startups:
- NOT people seeking to get rich. They are self-centered, whereas a startup is very team and family operated. Wealth measuring is part of the large corporate culture. It is a byproduct to startup founders.
- IS a person eager to make the startup a success rather than themselves. They work hard to help make the new enterprise an amazing business. That other-mindset keeps everyone focused on building that first product/service idea into a world-class winner.
- NOT risk reducing people. That is how large corporations continue existing decade after decade. Those giants get into big trouble by making a bad strategic move. They are the proverbial bulls in a china shop. Thus the focus is on risk reduction. It is central to all MBA education. It works great for world-class corporations. But not for startups.
- IS a person undaunted by high risk. They see high risk and yet are willing to accept even the consequences of failure of the new enterprise. They are willing to put all their money on one bold move. They don't hedge their bets. They are creative, flexible and outstanding at learning to do new things every hour in chaotic circumstances.
It is not easy to switch from thinking like a large corporate person and into the mind-set of the startup entrepreneur. But it is required. Central to that change is an understanding of the twins Uncertainty and Wealth. People seem to fall naturally into one of two pools of talent. One is right for startups. It's your job to find then and leave the others working at the large corporations where they will do fine work. Learning to recruit the breed of person for a successful startup is what serial entrepreneurs do best. It is central to how they build great startups and construct unfair competitive advantages.
I wish you The Best on your Adventure!