I often get asked about what’s the best path to becoming a successful entrepreneur: “Should I go try and start a company now? Or go to grad school? How about working at a large tech company for a few years?”
I spent five years at a large technology company, two years at business school and then two years in consulting before I went to a startup. Even with that experience, I still believe I was too green to jump right in and start a company. It’s not that those experiences weren’t valuable—it’s just that the most valuable learnings for successfully running a startup come from actually working at a well-run startup. I’d go even further to assert that the startup should be based in Silicon Valley and backed by venture capital.
You could just start a company without any startup experience, sure, but you will have a significantly higher chance of success if you already know how to navigate a startup’s unique challenges, including: raising money, changing product direction, and cultivating a culture. These are hard things to learn on the job and you may have only one shot at the crucial “friends and family” round to get you started.
Why a Silicon Valley, VC-backed startup? If you just graduated college, you probably haven’t developed the experience or instincts to judge whether a startup has a great team, a differentiated product or is going after a large enough market. While certainly not perfect, the VCs have done a lot of this important vetting for you, and their decision to invest can be considered a boost of credibility and resources for the company. Also, within each technology region, there is a dense network of specialized talent, financiers, and service organizations (e.g. legal, PR, recruiting) that form a startup ecosystem. Silicon Valley is by far the largest ecosystem and therefore holds the most potential job opportunities and the strongest network.
What about grad school or establishing a foundation at a large company? It comes down to relevance. The responsibilities, roles, contacts, context, culture, communications, risks and instincts you need to develop to eventually run a successful startup are best found at a startup.
If you’re trying to prepare yourself for entrepreneurship— the same two to four years at a startup isn’t even comparable to the equivalent time spent in school or a large company. There’s probably five to ten times more learnings and relevance at the startup.
The next step involves finding the right startup to join. As it turns out, I moved out to Palo Alto from Boston in 1996 with virtually no connections or contacts and over $100,000 in school loans from business school. A few things I did are surprisingly still relevant today:
I cannot overemphasize the importance of preparation and persistence throughout the process. It took me four hard months of preparation, research, focus, list-making and networking until August, 1996, when I received a warm referral into a little, 12-person startup named Hotmail. It ended up being the best job experience of my life and I was completely hooked.