If you want to become an entrepreneur, there are few better ways to learn than going to work at a startup. Doing so will give you a fantastic network of future collaborators and provide you with the essential skills needed for running your own firm.
Working in a startup is a great way to meet other entrepreneurial individuals and test out whether you have the right chemistry to work together. Startups are stressful environments, where employees put in long hours and build bonds that can last for one's entire career. According to Wharton School of Business professor Adam Grant, the best co-founders are often not friends or family, but former co-workers.
As Prof. Grant writes, co-founding a business without previously working together is risky, and significantly increases the likelihood of future tension. Friends may know one another's social preferences, but co-workers know more about each other's strengths, weaknesses, working styles, and communications methods.
While there are many gifted entrepreneurs who create successful companies while having minimal work experience, the data show that this is the exception, rather than the rule. According to a report from the Haas School of Business at the University of California, Berkeley, the average age of a venture-backed tech entrepreneur is 38, with the average entrepreneur holding a master's degree and 16 years of work experience. The reality is that having extensive work experience significantly increases the likelihood of success.
In a startup, roles are rarely fixed and you often work on many different aspects of the business. At Venture for Canada, where we recruit, train, and support recent grads to work at startups, we have seen firsthand how a startup employee can go from prospecting potential leads one day to setting up an HR software system the next. Such variety allows you to learn a lot in a very short period of time, gaining valuable insights into many different business functions that proves beneficial when making the transition to becoming an entrepreneur.
To be a successful entrepreneur, you have to be comfortable in dealing with heightened ambiguity, or the stress of running the company may become too much to bear. The Kauffman Foundation – a non-profit organization that supports entrepreneurship and education – cites how entrepreneurial firms such as startups "face uncertain technologies, unclear products and features, and extreme ambiguity about opportunities and customer demand." Being a part of a startup, where there are often limited-to-non-existent procedures in place, is a great way to take a crash course in dealing with the stress of ambiguous situations.
With many startups growing at rapid paces, you can quickly move up in seniority within a company. Through the addition of these responsibilities, you gain valuable management experience, which is essential to eventually running your own firm.
In addition to providing a valuable network and experience, working in a startup provides a lower risk and often a more financially viable path to becoming an entrepreneur. As a startup employee, you learn the ropes of building a business while being paid a salary. It's a great way to gain the necessary entrepreneurial skills without taking on debt.
Tight-knit networks of former startup employees are extremely important in driving innovation. A relevant case study to highlight is that of the "PayPal Mafia," a group of former PayPal employees who have founded such notable firms as Yelp, Tesla, Yammer, SpaceX, LinkedIn, Kiva, YouTube, and 500 Startups. The experiences and bonds formed by these early PayPal employees created the bedrock for future entrepreneurial success.
If you are passionate about entrepreneurship, consider joining a growing startup. It's a fantastic way to meet great people, develop diverse skills, make an impact on a growing company, and pave the way to becoming an entrepreneur.
Scott Stirrett is founder and executive director of Venture for Canada, a not-for-profit that recruits, trains, and supports top Canadian university graduates to work at startups.