05 Oct The Delayed Satisfaction of an Entrepreneurial Career Path
The rise of the Search Funder or “fundless sponsor” is becoming a much more popular route for more and more recently-minted MBAs, particularly in the Ivy League. It’s a topic we have previously discussed and an area of fintech that SearchFunder hopes to dominate and disrupt. While I’ll not attempt to rehash many of the great articles on the subject, I want to bring particular attention to the included graph, which was gleaned from the previously linked-to HBR article. The image is not an exactly calculated scientific explanation, but it represents a great visual representation of what business ownership means for many entrepreneurs: a delayed source of longer-term gratification.
Build vs. Buy
The age-old argument many entrepreneurs make is a similar discussion had by value-adding growth advocates. Do we become an entrepreneur (or grow our business as an existing entrepreneur) organically or do we make the leap through strategic acquisition? Internal discussions will often result in the conclusion that growth by M&A is prudent and a quicker form of growth. So too the entrepreneur will mitigate at least some of the business risk of entrepreneurship by sourcing an acquisition as the means of entrance into the shiny-object world of entrepreneurship. If an entrepreneur seeking to weigh the various options for entrance into entrepreneurship s/he is likely to come to the conclusion that “consulting” or other corporate paths represent the surest and most immediate gratification post-MBA. For many, especially those with familial obligations, there may be a larger need for immediate gratification. For those with the available equity and debt sources for making an acquisition, only some of the initial anxiety of business ownership are assuaged. Like HBR surmises:
...In a consulting job, there is a great fit between training and tasks at the outset; when starting a search, the tasks are often vague, and MBAs aren’t taught how to identify acquisition prospects. In a consulting job, there is clarity about both roles and the path to success; in a search, it hard to see what works well and most searchers do a little bit of everything, work hard, and hope for the best. Plus, a consulting job aligns with external expectations: nobody has to explain anything to anybody when choosing a consulting career. It is a well-worn path. Searching is more like bushwhacking in the forest of opportunity.
In short, the ambiguity of even a funded entrepreneurial path creates what HBR calls “angst.” The promise of a solid salary and a cookie-cutter task-list post graduation, can be a compelling career choice for many business school graduates. The gratification (financial and otherwise) of most entrepreneurial paths can be greatly delayed by many of the factors that contribute to the avoidance by many of such a course. Fortunately, we work with those in the latter camp, those that have the keen ability to delay their career gratification for something greater in the long term:
One thing I find most interesting is that that HBR article is pushing more entrepreneurial-minded students to dive into business ownership, not because it makes them more happy, but that it provides them less angst. A job is a job, whether you own the business or work as a cog in some larger organization. One of the keys is to find something that fuels the passion that will give you the drive to push very hard toward a much longer horizon where a payday may not be immediately forthcoming.