General Partner at Flyer One Ventures. Launched VC firm after 15 years of professional experience, investing in exceptional founders.
People often think that if someone has experience working for a big household brand, they will surely be great entrepreneurs. But I’ve found that to be a myth.
I’ve been an investor for more than six years and have backed about 80 companies with my venture capital firm and through angel investments. I have also been on the other side of it all as a serial entrepreneur. Here’s what I’ve learned that other investors should consider: A successful founder doesn’t have to be a successful employee before starting a business, and having the experience of working for big brands doesn’t guarantee that people can run their own startup.
There are certainly advantages working at a large company can give an entrepreneur. For example, I’ve found folks at big brands often dream big. Seeing how their work can change lives might inspire them. So, when they strike out on their own, they aim to do something just as impactful. In my experience, ex-employees of major firms tend to have strong professional connections as well. Top-notch companies attract great talent, which allows employees to mingle and make useful contacts. They also give their employees greater visibility within the industry.
But, from what I’ve seen, there are also potential disadvantages that might come with being an ex-employee. To be clear, I’m not referring to people who joined big companies in their early stages of development. They were the reason the company became big and respected in the first place. And, of course, they would make for good founders. I’m talking about employees who joined a company that was already running smoothly. Why can there be drawbacks? The short answer is that working on projects that already have users, traction and resources requires a totally different skill set than starting something from scratch. Few can do it all.
The longer answer is that people can get used to working in relative comfort. We all do. For those working for a big-name company, payrolls are regular. And compared to the founder of a business, there are typically less severe penalties if a corporate manager makes a mistake. They can be reprimanded or fired, yes. But there’s much less personal risk in decision-making when you work for a big brand, which can numb the risk muscle. With time, I’ve found it can become a struggle to persuade some corporate folks to experiment. The destination is uncertain, and it demands responsibility.
Furthermore, corporate managers tend to have more resources for testing ideas (and failing). Startup founders, meanwhile, have to burn money, make money, raise money and do it all over again. To succeed, founders need to know their financial limits really well. In my experience, founders who do are less likely to suddenly run out of money or start looking for new funding with only a few months of runway left.
I’ve also found that sometimes, professionals from the corporate world can become attached to specific tools and proprietary software, which may make it challenging for them to move back to using the vanilla versions of various tools in a startup. They have to slow down and rethink their working process.
In addition, some corporate folks might not be used to handling administrative tasks. An office and everything in it, such as insurance and paperwork, are often arranged for them. When the time comes to do it on their own, it can turn out that they aren’t ready. Still, it’s part of the job, especially when running an early-stage startup.
So, when people from big companies quit to start their own businesses, they might find the transition difficult. There are many exceptions, of course, but I’ve more often seen people try entrepreneurship and then go back to working for someone else again.
Both my portfolio and that of my VC firm include companies led by former Amazon and Google employees. They are good founders, but it’s not just because they worked at prominent places before. Those founders managed to be both, but it’s a rare thing. In my experience, a good many successful entrepreneurs simply can’t or won’t work for someone else. That’s why the absence of big-name logos in a person’s resume (or on LinkedIn) never deters me from listening to their business idea.
I understand that everything I’ve said reflects my own bias and experiences. Other VCs certainly have theirs. Some might consider backing married co-founders a bad idea, for example. But a good investor should be able to assess companies and their founders objectively. Do they align with your company’s investment criteria? Do they possess the right skills and mindset? If the answer is yes, then back them. Your biases should not stop you.
It might sound trivial, but entrepreneurship is about wanting to learn and grow, being brave enough to step out of the comfort zone, staying curious, being adaptable and organized, and having clear thinking. Anyone can have these traits—not exclusively the former employee of a big brand.
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