Howdy, beautiful business people!
Today is something I’ve been thinking about lately…
- Big company vs small company experience
Here we go!
Here’s my hot take for today:
If you want to be an entrepreneur, go work for a small company.
It’s the best way to get the skills, mindset, and network you need to start your own business.
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Before I start though, this isn’t for everybody.
There’s nothing wrong with working for big companies.
I see so many influencers saying that everybody should start their own business. I think that’s crazy. There’s nothing wrong with most people wanting to have a job.
Look at the average corporate lawyer who lives on my street. A lot of years they made more money than I did, with a lot less risk. Big company jobs are perfect for tons of people.
Just not if you want to be an entrepreneur.
My path to entrepreneurship
I come from a family of entrepreneurs. So every night, I would listen to my parents and aunts and uncles talk business around the dinner table. I soaked it up.
But it took me a while to find my own path to entrepreneurship.
When I was 19, I did an internship at a big nonprofit institute here in San Antonio. I spent a summer sitting in a windowless office. My office mate had a haircut like Friar Tuck. I don’t think I did anything important the whole time I was there.
And I discovered that the bigger a company gets, the less it feels like entrepreneurship and the more it feels like you’re part of a big machine.
Fast forward to age 21. I’m graduating from the computer science program at a small liberal arts college. I’m at a big luncheon for all the grads.
They’re going around the table asking what we’re going to do after graduation. Everybody’s saying, “I’m going to work for Andersen Consulting,” “I’m going to work for a finance company in New York,” stuff like that.
When they got to me, I said, “I have no idea. I’m just going to try to figure it out.”
At that moment, I realized I’d spent four years of my life surrounded by people nothing like me.
Still, I spent some time in big companies. I was a cog in the machine. And the whole time, I was moonlighting different ideas on the side. It made me a total black sheep — everyone in my network was a company person, while I was the guy hustling.
I still hadn’t found my people.
Jumping to my late 30s, I’d had a bit of business success and was doing some angel investing — giving startups their seed money to get up and running. (I have since decided I hate angel investing. More on that another time.)
I talked to many founders, and some of them had only experience at huge organizations. Usually, they had no idea how stuff worked. Customers came from the sales fairy. New people appeared and disappeared from the distant land of HR. And money was infinite if you could justify the expense.
Then I would see founders who had worked at small businesses. These people actually knew how to do things like get customers, find talent, and watch every dollar.
These days, I’ve seen the same thing in companies I’ve started. I co-founded a company here in San Antonio called Dura Software with a guy named Paul as the CEO. He came from a big company, and I was amazed at how well he ran things.
Then I learned he used to own and operate a restaurant.
Running a non-branded, non-franchise restaurant in the US is one of the toughest gigs out there: long hours, tough employees, tight margins, and dealing with clogged toilets from the last customer of the day. You don’t learn that stuff at big companies.
And that’s why we worked so well together.
It’s not just a theory
Even though our picture of a “tech founder” looks like a 20-something nerd who dropped out of college, the data shows something different. The average founder age is 38, most have a master’s degree and have worked for 16 years.
Venture firm Bloomberg Beta ran an outreach program, where they crunched a bunch of numbers and contacted people who looked statistically likely to start businesses.
The biggest single predictor? Whether they had worked in a venture-backed company before.
Why experience is everything
Some colleges try to teach entrepreneurship. And unfortunately, most of these programs do it totally wrong. They try to teach entrepreneurship by reading a book or studying the steps.
MIT, for example, teaches a 24-step path to build a startup.
But… it just doesn’t work like that.
You can’t treat starting a business like a chemistry experiment. There are way too many moving parts. You can learn the principles, but there’s nothing linear about the journey.
At the end of the day, entrepreneurship is a practical field. You need to get in there and do it.
Some colleges do it right. At Trinity University here in San Antonio, they basically give the kids some money at the beginning of each semester, give them some rules, and tell them to go run a business.
But none of these replace just working at a small company.
What you learn
The beauty of a small company is that you see how the sausage is made.
You’ll learn…
- the opportunistic mindset
- the relentless speed
- how everybody does a million things at once, instead of being slotted into a tiny niche
- how scrappy leaders solve problems and make decisions
- what they do poorly, and how not to suck
And on top of all that, there’s another huge advantage: who you meet.
At a big company, you might never even meet the CEO or the executive staff.
At a small company, you start building a network of people like you: entrepreneurs and aspiring entrepreneurs.
Of course, there are exceptions to these rules. I’ve met some of them, like my friend Paul who I mentioned earlier. But they’re not the norm.
—
That’s my theory!
Lots of young people want to start a company one day. But so many of them feel like they lack the skill set to get there.
If that’s you: go work at a small company.
You’ll develop the skills, mindset, and connections that put the odds in your favor.
One way I grow my HoldCo is by incubating businesses, which is starting companies, but I don’t work in them. Many people want to do it, but it’s not taught anywhere in school, in books, or in classes.
So, I’m fixing that.
In an effort to share more with you, I’m giving a series of lectures about topics that will help you make more money, grow your business, and grow your HoldCo. At the end of each one, we’ll save some time for Q&A.
SO:
I'm excited to invite you to a special lecture on May 1st at 11 AM CST. Whether you're just starting out or looking to expand your existing portfolio, this session should be worth your valuable time.
Plus, it’s free.
You can register here.
Have a great week!
Michael
