Taking The Plunge
There is no general answer to the right time to do a startup. For most, timing is a judgement
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One of the questions I am most frequently asked by young people with entrepreneurial aspirations is when is the optimal time to take the plunge and set up a business — when you are young, enthusiastic and with little to lose, or later when you have more experience?
I just visited one of my first bosses from banking more than thirty years ago. Now retired in a beautiful island home, Nick had left banking just before the crash of 2008 and set up a successful healthcare infrastructure business.
“We won most of the bids we made,” he told me of his business. “We were just so much more impressive than our inexperienced competition.” This resonated with my own experience of co-founding a business in mid-career. My co-founder and I were both seasoned professionals and consequently we found it easier to raise capital, attract a team, avoid mistakes and scale the company.
The overwhelming majority of startups fail but the chances of success are certainly higher for a mature founding team. The downside, of course, is that later in life you have more to lose, have greater financial commitments and have got used to the comforts of corporate and professional life.
That rare breed, the natural entrepreneur, would never survive working for others. Most of the truly great entrepreneurs knew from an early age that they had to work for themselves. Many, including Bill Gates, Mark Zuckerberg and Richard Branson, did not even graduate from college but set up their businesses instead.
Of the Indian entrepreneurs I interviewed for my book, Boom Country?, more than half were young when they started a business. Many of India’s most established business successes never worked elsewhere before creating their own business, including Sunil Mittal, Ronnie Screwvala and Uday Kotak.
A high proportion of India’s current crop of prominent entrepreneurs were similarly young when they got going on their own. The Bansals of Flipkart and Bhavish Aggarwal of Ola had worked for just a few years. Vijay Shekhar Sharma of Paytm founded his first company while still a student.
Even for more normal people, for whom entrepreneurship is a choice rather than a genetically determined necessity, there are good reasons to try your first startup at an early stage in your career. This is particularly true now that the social acceptability of entrepreneurship has changed so much and the stigma of a failed venture is much less.
A younger entrepreneur is more likely to brim with new thinking and be willing to challenge the received wisdom of her sector. She may well have fewer family obligations and be able to work every hour.
If her first business idea does not work she can more easily pivot to a new approach, or go back into the workforce with the benefit of the intense experience of a startup.
There is no general answer to the right time to do a startup. For a few, there is no doubt that they must create something immediately.
For others, working for years before becoming an entrepreneur gives them the tools and confidence to build something better of their own. For most, timing is a judgement and trade-off.
What I do believe is that, when the right moment has come for you personally to take the plunge to start a business, you will know it deep inside.
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