By Andrew Amann, CEO of NineTwoThree Digital Ventures. Andrew and his team have created 45 products and 9 startups and was featured in the Inc 500 in 2021.
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As a serial entrepreneur behind nine startups, I’m here to tell you: Don’t quit your day job. Yet.
While most advice for potential entrepreneurs starts with the idea that you should just quit your job and dive in, this is rarely the best course of action. Starting your career pragmatically and building toward entrepreneurship, instead of diving into the deep end, can help you get more comfortable in the corporate waters and refine your idea.
The desire to start a business is shared by 62% of Americans. However, according to the same survey, 56% of Millennial entrepreneurs say it was harder than they expected. The fact is that the majority of startups fail and growing capital is difficult without a proven track record.
Pursuing your passion doesn’t mean giving up the practical. There are immense learning opportunities from starting your career as an intrapreneur at a large company. Next, consultancy provides the opportunity to learn even more about your chosen market while building a team and raising capital. Let’s discuss how to use these important steps as part of an alternate career path to becoming a successful entrepreneur.
Benefits Of Intrapreneurship
Before going out on your own, you can test being an entrepreneur by being an intrapreneur at your company first. Intrapreneurs promote innovation and product development within a larger organization.
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This path allows you to learn how large companies operate, become familiar with the different processes and management styles and gain experience bringing projects from start to finish. Can you take risks? Can you work outside your comfort zone and create something new while making a reliable salary?
In addition to the learning opportunities, retaining the revenue from your core job keeps a roof over your head while you work on your startup. Employees at most large companies have plenty of time to work on side projects and explore the person they want to become. With the rise of remote work, employees have more free time than ever. A recent study found that almost 50% of employees worked for another company while on the clock during their current job.
Building A Consultancy Or Agency
Once you have some experience under your belt, the next step is to raise capital and put a team together, right? Sort of. Instead of diving right into a startup, there are endless benefits to building an agency instead.
It can be difficult to raise the capital for a successful startup and foolish to devote all your resources to just one idea when 90% of startups fail.
Building a digital venture studio reduces the risk of failure while providing you with the team and capital necessary for your own ventures. Whatever core competencies you believe you’ll need for your startup, develop an agency or consultancy to offer those services to others. Working in the industry you plan to focus on — or convincing the industry to pay you for your services — is also an invaluable experience. In addition to adding to your own experience, you’ll be able to learn more about the current market and build a team that specializes in these specific areas. Most importantly, you can now use the profits from your customers to fund your business ideas.
Fund Your Startup With Agency Profits
Once you have the development team and the resources to build products, use the extra cash to put toward an industry with problems you can solve. Your startup essentially becomes a client of your own agency. Assign a team and a time frame, then get to work.
Putting your agency profits into new startups turns static income into recurring revenue. Funding your venture through agency profits also allows you to retain 100% of the company and gives you a more forgiving timeline. As long as your agency is still generating profits, you can build at your own pace without worrying about running out of cash or needing to take another round of funding.
Another benefit to your agency is you can maintain a team of talented developers even when you aren’t at 100% capacity with client work. Having startup work as a fallback ensures your developers will never sit idle and the team can test new ideas.
Bring In Startup Leadership And Repeat
At this stage, it is important to understand your role and goals. You aren’t trying to become the CEO of an agency and a single startup. Your role is the “visionary” responsible for finding industry gaps in which both your agency and a potential startup can find new customers. Your goal is to fund several different startups to limit your risk and continue to reinvest agency profits.
Once your first startup gets a little bit of traction, use the profits to bring in industry leaders to manage the company. This is vital to running a successful startup because you need someone thinking about the product all day, every day. At this stage of the startup’s growth, you should be prepared to hand over the reins and start evaluating your next venture.
The additional benefit to bringing in a CEO is you can choose someone with unique experience in the startup’s industry and in the specific challenges at that stage of growth. Always look to hire project managers with the potential to become CEOs.
There is no guaranteed safe route when it comes to entrepreneurship. But there is a route that allows you to limit your risk and retain more control over your future. Consider this alternate career path to becoming a successful entrepreneur.
