The Entrepreneur’s Essentials #3: New Year’s advice for middle-aged people
For this lesson from The Entrepreneur’s Essentials, I’m in a New Year’s type of mindset with this date being Dec. 29, 2018. As such, I bet there are plenty of middle-aged people who are thinking about jumping into the startup gold rush (I’ve met plenty this year who are). As I’ve mentioned in several Lucky7 posts before, we are living in the Golden Age of Technology (here’s one of those posts). Since I first wrote about the Golden Age in 2014, valuations for tech companies have only increased — rather dramatically. I saw this happen during the dot-com gold rush, which was largely based on fantasy (although much of what we “delusionally” believed back then became true, just much later). This time it is different but the reactions are similar in that many people are choosing to either become entrepreneurs or join a startup for the first time after a career of working for large companies. This selection is for those first-timers— especially those of you that are middle-aged. I truly hope it helps you achieve your dreams in 2019 and beyond.
So here we go with this lesson from The Entrepreneur’s Essentials. It was first shared at Lucky7 on May 17, 2013. I made very few edits to the original post below, mostly in the area of readability and grammar (not in substance of content). I apologize in advance that it is pretty hard-hitting but I want to be raw and honest with you in order to do my best to help you:
We are at the tail-end of RISE week here in beautiful Austin. If I was an aspiring entrepreneur, I would take a vacation during RISE week and attend as many sessions as I could (author’s update note: sadly, RISE is no longer operational). I was happy to do my part and present on fundraising both Monday at Austin Ventures as well as Tuesday along with panelists from CTAN (the Central Texas Angel Network). And, overall, it has been another great week for Austin, with TechStars announcing their launch, which I wrote about in this Lucky7 post.
In the spirit of this post being a RISE talk that I could have given but didn’t, I was struck by a comment made at the ATC CEO Summit the week before. Bill Wood, founder of Silverton Partners and an early General Partner at Austin Ventures before, said something that got me thinking (quoting from the SiliconHills article):
Because it’s easy to startup a company and doesn’t take a lot of money, Silverton Partners sees more startups forming, Wood said. The teams are made up of founders who are dramatically younger. The majority of its founding teams are in their 20s, Wood said. The good thing about young founders is that they don’t know what’s not possible, Wood said. They have drive, ambition and a willingness to sacrifice, he said.
Perhaps half of the RISE attendees I’ve seen fit this profile, maybe a bit more. But a large percentage of the group are those that I would classify as middle-aged entrepreneurs. I’m 41 myself and have the encumbrances of a wife, children, and expensive material weights such as a house, cars, etc. Don’t get me wrong — I absolutely love my wife and children. Nothing is more important to me. The material items? They are nice but they don’t bring me happiness on a level even close to the love for my family does.
So I started to think about what advice I would give a middle-aged, aspiring entrepreneur. This thinking was reinforced when I spoke at Shavuot on Tuesday night at Congregation Agudas Achim. The theme for this year’s Shavuot teachings was “Earth, Wind, and Fire”, and I spoke on “Lighting Your Inner Fire”, frequently quoting Viktor Frankl, a Holocaust survivor and the very inspirational author of Man’s Search for Meaning (one of the most important books I can recommend any human being read — not just Jewish people). Here is one of my favorite Frankl quotes from Man’s Search for Meaning:
Don’t aim at success. The more you aim at it and make it a target, the more you are going to miss it. For success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended side effect of one’s personal dedication to a cause greater than oneself or as the by-product of one’s surrender to a person other than oneself. Happiness must happen, and the same holds for success: you have to let it happen by not caring about it. I want you to listen to what your conscience commands you to do and go on to carry it out to the best of your knowledge. Then you will live to see that in the long-run — in the long-run, I say! — success will follow you precisely because you had forgotten to think about it.
I’ve mentored one middle-aged entrepreneur, Suneet Paul, who is the co-founder and CEO of NewComLink. And he’s also taught me a lot. So I’ve got some familiarity with this territory, and here is my take on your five-step program to entrepreneurial freedom. Note that this advice is just as important if you are a big-company executive/manager that is going to work for the CEO of a new startup for the first time as it is for you if you were going to be the CEO of a new startup yourself (either one you’ve founded or one where you’ve achieved enough success to convince your investors that you can be a first-time, successful startup CEO). The easiest way to earn the CEO title is to start your own company and “promote yourself”, but that doesn’t mean it is easy to become a CEO.
Step One: First, you need to shrug off the big-company attitude and get centered, and fast. When you are a big company executive/manager, people pay attention to you but most of the time it isn’t very genuine and you start to believe their bullshit. For example, you get on the phone with a business partner and they kiss up to you. That is because you have the resources of a big company — possibly even billions of budget and thousands of people under your purview. You are in for a rude awakening if you expect that type of treatment from anyone at a startup. You’ll get on the phone and you’ll have to really hustle (read #17: Action-oriented communication). They will think, “Why am I wasting my time speaking with this small-company person?” Ironically, they’ll especially think this if they are working in a big company because they are more cautious about taking risks on “no-names”. You don’t have the legitimacy that comes with decades of building a stable brand. You are an ant again (actually, you always were, you just lost perspective) — just like you were when you were a child and everything was a blank slate. Not surprisingly, I suggest you start by reading Man’s Search for Meaning to get centered and find your inner passion (author’s update note: reading this incredible book in 2019 would be a great way to start the New Year).
One of my early investors at Bazaarvoice (author’s update note: and also at data.world), Marty Lautman, also recommends reading Boris Groysberg, who writes frequently for the Harvard Business Review (link to his HBR articles). Here is how Marty summarizes Boris’ writing:
- Moving up is better than moving down.
- It is a lot harder to get a valid interview of a candidate in a company significantly smaller/lower on the technology ladder than where the candidate is coming from.
- People stepping down will constantly remind themselves where they are from.
- Stars who move with their teams tend to stay and be great.
- For some reason, the top 5% from lower-rated companies who move up generally do well.
- To retain stars you have to teach them how to manage up, not just down or across.
- A good strategy for integrating stars is that when they arrive is put them on a multifunctional team.
- Star women are often easier to integrate than men.
- More women in management is generally indicative of more of a merit-based corporate culture — but only in industries dominated by men.
Step Two: You need to learn how you’ve been manipulated your whole life. One of my favorite books to this end is Influence: Science and Practice by Robert Cialdini. This is important because it will put you very in tune with human behavior. And, as a good person, you can leverage that for the greater good in your business instead of evil. But you can always ward off the evil by being in tune. The book is also full of very practical early-stage marketing advice so you can break through the noise.
Step Three: You need to think big or you will quickly fall into the pattern of being a first-stage entrepreneur (I describe the stages of entrepreneurship in this Lucky7 post). Bill Wood is right in saying that you have more to lose than the younger folks. That playing-for-safety mentality will serve as a weight from you being “crazy” enough to swing for the fences. But as you can read from this Acton MBA in Entrepreneurship post (I love that this program is in Austin, BTW), you need to think about “the number”. If you become a first-stage entrepreneur, you will very likely never have financial freedom. Freedom is a very important thing as I describe in my Lucky7 post on what Benjamin Franklin may have meant when he said “remember that time is money”. The best book on how to get the bravery to think big is The Innovator’s Dilemma, which I recently referenced in my Lucky7 post about Elon Musk, who has five children, is 41-years old, and is simultaneously disrupting the auto, energy, and space industries.
Step Four: Read #14: Seven lessons learned on the journey from founder to CEO. It is written by a middle-aged entrepreneur. I’m dedicated to writing many of my lessons learned over the course of founding five businesses on Lucky7.io, which is a tribute to my mom, so tune in frequently.
Step Five: Have the humility and self-awareness to surround yourself with great mentors, from your angel investors, to your VC investors, to your Advisory Board, to your Board of Directors, and to your CEO or executive coach. You are really going to need them. You have a much harder pivot than younger people do because of your material and family encumbrances and your big-company attitude (see Step One again!). Read #9: How, and why, to ask for help. Once you’ve recruited these people to help you, read #13: How to leverage advisors and investors as your extended team.
Good luck and remember what my CEO coach, Kirk Dando, says, “The path to heaven goes through the road to hell”. You are going to feel sick at your stomach sometimes, maybe even often (author’s update note: I wrote about the paralyzing fear of getting started in lesson #2, and how this still affected me at the beginning of data.world even though it my sixth startup). But there is nothing more rewarding you can do in career than start your own business. You are breathing a soul into a new being (a collective, if you will), and I hope you change the world for the better in the process.
I’ll close by quoting Suneet Paul, co-founder and CEO of NewComLink, who built Dell Financial Services from inception as an intrapreneur before venturing out with another middle-aged co-founder as an entrepreneur. He was was kind enough to write to you for this post, and I’ve enjoyed mentoring him since the inception of his company.
I read your blog over the weekend and am inspired to add my two cents. I was fortunate to live in Silicon Valley for six years before moving to “Silicon Hills” in 1997 — having the honor to work for two third-stage companies, Apple and Dell. But in reality the move to Dell was to be the founding executive member of Dell Financial Services (DFS), which I can categorize to be a second-stage business. DFS was formed in 1997 to provide Dell customers the best financing options. We build this business from ground zero to over $5 billion in a decade, and I retired from Dell in January of 2008.
I am one of those who was not infected by the entrepreneurship bug in my younger days but ended up starting NewComLink in the middle of the world’s horrific financial turmoil — yes, in the 4th quarter of 2008. Some people did call us crazy for starting an innovative financial services technology company in those times! We are glad we did. And, yes, Austin Ventures trusted us by leading a $5 million series A round when we only had a PowerPoint deck. Yes, they do fund very early-stage ideas!
There have been several learnings in this journey and it is very different state of mind. I have met a lot of entrepreneurs in their 20’s and 30’s. My case is different — it started when I was in my late 40’s but I always felt that I have energy and state of mind to do this. Like with anything else there are always challenges and opportunities. I feel having a few decades of professional experience is a big plus — I’ve lived the real business world, had the chance to do different things and take risks while working for more established companies, learn from mistakes, and try something new the next time. It is not like starting a company and learning business acumen at the same time.
One important thing that I learned very early is that have a solid board of advisors who you can lean on in this journey. If you remember you are our very first Advisor and we are lucky, honored, and thrilled to have you as sounding board in this journey. You have personally helped me immensely to fill the “entrepreneur gap”. I will never forget what you told me in 2008 when I asked your advice on signing a NDA with the VCs before sharing our deck. Since that time we now have around dozen strong Board of Advisors with a core competency in different areas of our business value.
Yes, it is true — I thought when I call a potential customer I will get a faster response — while it was easy to get an intro to Fortune-10 potential customers, it takes a lot of effort to explain “who is NewComLink? — so what do you do?”. And, yes, you go all the way to a potential customer’s office expecting senior executives and you meet with junior people who are not decision makers.
It has been an exciting ride and it is great to build something from scratch especially something that has never been accomplished. Lots of mistakes and learnings on the way and an absolute roller-coaster journey but having a great board of advisors is key. We continue to celebrate our milestones and create opportunities where they were lacking before. At the end of the day this is much more complex than we expected, but to quote one of my very large favorite clients, “The juice is worth the squeeze”!
In reflecting on this lesson since starting data.world, a few thoughts come to mind:
- I’m very wary of hiring a middle-aged employee that has never worked at a startup before. If we are thinking seriously about proceeding forward, I have them read and reflect on this post first. I remember doing that with Ariane Chan, our General Counsel (she was a partner at DLA Piper for nine years prior to joining us), and it brought about a wonderful discussion about her family background, growing up in a very entrepreneurial environment. She has been an absolutely wonderful addition to our team and has made the adjustment very well. I should also point out that she helped found the DLA Piper Austin office by being one of their first employees.
- Middle-aged founders have a better chance of success than middle-aged executives joining a startup for the first time. That is because they have already centered themselves quite a bit in the first place — after all, they convinced their family that they were going to go for it, and endured the sometimes subtle (but not always) critiques from their large-company co-workers when they departed to go for it.
I would really love to hear your thoughts on this lesson. Are you a middle-aged founder or first-time executive of a startup? How are you coping with it? What have you learned?
