Do You Need A Job Before You Become An Entrepreneur?


No, previous job experience isn’t a prerequisite for becoming an entrepreneur.

But… I’ve worked with a few hundred young entrepreneurs in Silicon Valley over the past few years and I can confidently say that generally, experience makes a huge difference between whether an entrepreneur will successfully get past the first few hurdles of founding a great company or not.

Here are the pros of getting a bit of industry before founding your first company:

  • You’ve built a large and strong professional network. It depends on your goal (lifestyle business, $100mm/billion+ exit, disrupt industry xyz, etc), but it’s very likely that your dream company will be larger than just you or you and 3 of your buddies. If that’s the case, then you need to start thinking about the process of building a pipeline of the right people to bring into the company. You need to start to think about hiring people NOW who will hire the right people in 1 year, in 3 years, etc. Smart investors explicitly look for this. Are you thinking about building a sustainable machine that systematically generates cash-flow and profits or are you overly focused on product features and being the first of your friends to raise VC money? Are you in this for real or for the show? If you’re in it for real, then you’ll have a hiring plan for the next 18 months. Even with a large professional network, hiring is one of the biggest challenges in business. Working at a large company is a great way to quickly build a large network – especially if you’re being intentional.
  • You’ve gained industry knowledge that only 1 in every 10,000-100,000 people have access to. If you’re smart, you’ll 1) pay close attention to pain points and 2) combine multiple disciplines (aka “complex problems”) and compound the rarity of your insider information. (NB: when I said “insider,” I don’t me illegal. There’s plenty of knowledge you’ll gain that the company can’t lay claim to after you leave. Read your contracts carefully and understand your state’s laws.)
  • You’ve earned and saved a lot of money. If you’re in a position where you could actually be a great entrepreneur, you likely have valuable skill sets…meaning you should be demanding nearly 6-figures or more on the open market (depending on your specific skills, your ability to market them, your competition, and cost of living..etc). In most cities in the USA, you can save over 40% of your salary easily by simply not wasting your money. The money you save while you’re working for the man might be the runway you need to get your company off the ground later.
  • You’ve learned on someone else’s dime. Learning can be really expensive. A start-up is all about learning: Who’s our customer? What are their pains? How much should we charge? How do we sell this thing? What’s the most effective way to market our product? …etc. You can learn a LOT of these lessons on big-corp’s dime just by hanging out and doing your 9-5 job…you just have to pay attention and cash those checks. Two other things you’ll get to learn is what you’re good at and what you’re ultimately interested in doing.
  • You’ve learned how to run a business. It boggles my mind that so many people want to suffer as an entrepreneur when they could just go open a McDonalds franchise and (probably) make way more money, faster. The other point is that if you can’t run a McDonalds, how the hell are you going to run a start-up? Working for a big company will teach you how to run a business. Once you’ve mastered that, then you can innovate on product and markets.

Sure, you might get comfortable and not want to leave your cushy job, but if you’ve really got the heart of an entrepreneur, then you’ll pull the trigger and quit when you’re ready.

Let me give an example:
I used to work for one of the largest oil and gas companies on the planet. Ultimately, I decided I wanted to do something else with my career and left. But I could have picked a very different path. Let me paint that picture…

When I was working in the oil & gas industry, I got to see very nuanced (but very large) problems from an insider perspective. I could take the knowledge and develop pain-killer (vs vitamin) solutions to multi-million dollar problems/opportunities. I could have left the company, invited a few of my best oil & gas, finance, engineering, recruiting buddies to join me. I could have invited others who wanted to keep their cushy jobs to be advisors and open doors within a different company (many of my friends still work in oil & gas at a bunch of different companies). After a few years, I could have easily coasted on my savings for a few years or hired a few people and coasted for 9-12 months. And if my venture failed, I could have easily walked back into my former employer (or any other in the field) and gotten a better job than the one I left. Relatively speaking, this is low risk, high reward entrepreneurship in action.

The Bottom Line: If you’re asking this question, then 99 times out of 100 you probably should go get the best job you possibly can and start a company in a few years. You don’t have to be there forever, but it’s probably going to save you heartache and accelerate your venture when you are ready to pull the trigger. Another test: how many of the above points had you already thought of by yourself? If more than 1-2 of these were new to you, then you should definitely go work for a little bit…just my 2 cents.

Disclaimer: I’m not going to lie – I got the same advice and didn’t take it. My smartest and most trusted advisors told me to go work at Apple or Google for 5 years before starting my first company. I listened, tried my best to understand the pros and cons and ultimately decided that they we’re probably right but that I didn’t have the personality that could work for someone else – in either a large or small company. I needed to be my own boss (I had already had several jobs and proved this to myself) and so I took the plunge into my first company after studying entrepreneurship for my masters at Stanford.