On Founding a Company Fresh Out of College
On May 18th of 2009, I signed the papers to legally incorporate my first company. Three weeks later, I graduated from MIT with my BS in biological engineering. Fast forward, and after 10 months of working on the venture, it was decided to not continue.
After failing to get the outcome the team had hoped for, some questions loom: did I make the right decision to jump into the entrepreneurial arena so early in my career? Is it generally a good idea to start a company right out of college?
Before I answer these questions with the benefit of hindsight, I’d like to first take you through the process that led to my decision to just go for it.
During the year prior to making this decision, I had spent a lot of time thinking about what I would do after graduation. I knew I wanted to be a part of the entrepreneurial community, so I began learning all I could about the entrepreneurial process. I read everything I could get my hands on, I talked my way into relevant MBA courses at MIT’s Sloan School of Management, I did projects for startups and venture funds, and I sought advice from members of the entrepreneurial community.
I received a variety of opinions on the best route for getting into the land of startups. Here are the three most common views, along with my brief analysis of each:
Go get a job. Learn how real business is done first. This is the safe advice, which is why it is the most prevalent. By getting work experience, you get a chance to really develop your network, expertise, and understanding of problems in a specific industry. However, working in a mature business isn’t anything like a startup.
Go work for a startup. “Startup” work environments, of course, vary heavily. Some startups are a couple of guys working out of their apartment trying to find a way to make some revenue. Others are more like developed companies, with office space, hours, and managers.
At the time, to me, joining a later-stage startup didn’t seem all that different from getting a job at a more mature company. Joining a smaller band of warriors setting out on the start-up road would have been difficult. In the early stages, such efforts mainly need engineers to get a prototype built. I knew how to code, but programming wasn’t my forte. All in all, this wasn’t a very good option in my eyes.
If it feels right, go do it. The negatives for starting a company immediately after school are the lack of experience, network, credibility, and money. But, there are many positives:
• Access to a lot of help. I find the entrepreneurial community to be incredibly supportive, with lots of vibrant, experienced people happy to help students. I had access to tons of great people through the MIT and Boston communities. I talked with professors, cold called and emailed alumni, and just found a way to get in touch with people. Not everyone would respond, but those who did were extremely helpful.
• Low opportunity cost. You aren’t walking away from a high-paying job in order to attempt a startup, so you have little to lose financially if it doesn’t work out.
• Low responsibility. By this I mean you probably do not have a family to take care of and a mortgage to pay. Having these responsibilities adds a lot of pressures and risk.
• Low living expenses. Coming out of college at age 22 like I did, you’re probably used to low standards of living, so you can live on very little. I was flat broke at the end of my senior year, but I wanted to spend all my time trying to get a company started, so I cut my food expenses down drastically (ate a lot of potatoes) and moved into cheaper housing.
• Access to potential team members. Universities have a high concentration of talented and ambitious people. This is a perfect breeding ground for the beginning of a startup team. People also have the freedom to go do a startup, if they’re up for it.
• Ambition. Early in your career, you’ll run through walls to make it happen.
• Fear of what could’ve been. I was compelled to be an entrepreneur. Some call it the “entrepreneurial bug.” I’ve heard other entrepreneurs call it a disease. Whatever it is, I had it. And I knew, if I didn’t try a startup right then, I’d always be thinking about it at whatever job I eventually took.
In hindsight, most of my analysis was correct, although I did overlook a few things. For instance, another advantage of working for a few years before attempting a startup is that team members are able to build up some savings, which can greatly reduce the amount of pressure the team feels. Another thing I could not have fully appreciated without experience, although I have heard it said many times, is just how important having a great team is. In fact, I would now go so far as to say the team is everything.
Whenever you get advice, you have to make the best decision possible for you at that given time. I chose to go for it. But now that I know a lot more and did not achieve the outcome I had hoped for, would I still advise my former self to do the same thing?
I now have an intimate knowledge of doing a startup. You only understand it once you do it. A startup is an emotional process for the founders. When you found a company, you put your name on it, and you view it as a reflection of yourself. I also know how hard it can be. You cannot understand these things without just doing it. Trying to understand building a business through a spreadsheet or a business plan is meaningless by comparison. You have to get your hands dirty to really get it.
In addition to learning about teams and running a business, I also experienced a failure. I think of this as an extremely important experience.
Lastly, I met a ton of phenomenal people. The entrepreneurial community really is a vibrant one—full of people attempting great things and full of some very interesting personalities.
Another startup certainly lies in my future. I am in no hurry, but when I do decide to go back at it, I will be much better equipped, and I will have something to prove. That’s a powerful combination.