Why I gave up a cushy career as an investment banker to launch a startup
This is the sixth in a PandoDaily weekly series that chronicles the experiences of a young entrepreneur as he bootstraps his startup. Read Part 1, “The less-than-glamorous life of a young entrepreneur,” Part 2, “How to survive co-founding a company with a friend,” Part 3, “Starting a company and having a girlfriend isn’t easy,” Part 4, “Customer validation: from lean startup to craigslist,” and Part 5 "Dealing with competitors without turning your product into Mr. Tumnus," Come back next Sunday to read the next installment.
In my first job out of school I felt like the most overpaid assembly line worker in the world. I spent three and a half years like this, working in investment banking.
When applying for the job, my go-to question for interviewers was, “What’s a day in the life of an investment banking analyst?” I received many high-level responses, frequently laced with words such as “team, collaborative, client interaction.” In reality, my time was spent building financial merger models, with inputs like “cost savings” (fancy word for firing people) then producing a text bullet-riddled 80 page PowerPoint presentation to present our findings to the client. Wash, rinse, repeat for each client meeting.
I found it monotonous, but luckily that didn’t take up my entire day. There was spare time to fill before the inevitable 7pm work carpet bombing that occurred as my bosses (yes...plural) were leaving the office and had “just a few more things” they wanted us to look at.
A favorite pastime for us analysts was pontificating on what we were going to do in our post-investment banking careers. Some people favored a traditional route such as business school followed by private equity, while others spoke of starting a company or taking time off to travel. Whatever it was, the common theme was that most of my peers, myself included, fully planned on exiting within two to three years.
But there was a disconnect. When I looked at my bosses, many of them had been in banking their entire careers. I wondered at which point they went from plotting their exits to settling in for careers. I realized it was actually pretty simple. Every year I got paid a little more and worked a little less. The income drip, and comfort it afforded, was addictive.
Whereas I entered finance as a typical cash-strapped college grad, I quickly ratcheted up my lifestyle to match my bloated paycheck. Growing up, I was fine (albeit not thrilled) borrowing a car from my parent’s fleet of Subarus (we’re from Maine). When I got a signing bonus, a used BMW suddenly seemed an appropriate purchase. Similarly, while I was perfectly happy living in decrepit houses with my buddies in school, my new income surfaced a need for amenities like skylights and marble counters.
Incrementally adjusting the amount of money I was spending every year was my way of validating the time spent in a personally unfulfilling job. I felt bad complaining about my job but not having the balls to leave it. Justifying my overpaid existence by over-spending, however, was only tightening my golden handcuffs.
When I got promoted to Associate I saw a Willy Wonka-style shrinking hallway ahead of me. I was getting older and my skill set was getting narrower and less transferable. I wanted to leave the finance industry and potentially work at a startup, but I didn’t know how viable that would be given my lack of technical expertise. I was paralyzed by indecision, as if standing on the edge of the Grand Canyon, wanting to explore any number of places on the other side but with no bridge in sight.
My co-founder, Paul, was in a similar situation. We wanted to vet career transitions by speaking to peers who had relevant experience. But the only people we found in our ultra-scientific (Google) searches were CEOs and others in public-facing roles. These senior professionals didn’t have a lot of time to share their insights, which wouldn’t have been too relevant for people in our position anyways. So we decided to build a community of people open to sharing career experiences over coffee.
Now that we’d pinpointed where we wanted to go, we had to figure out how to build a bridge (or makeshift tightrope) to get there. The first question: Do we work on our new company at night and on weekends or quit to pursue it full time? We decided that a safety net, in the form of a full-time job with a steady income stream, would doom us to failure. Nik Wallenda, the tightrope walker who recently crossed the Grand Canyon (while wearing his finest pair of bell-bottom jeans), said he doesn’t use a net because it provides a false sense of security, and that it’s been proven that tightrope walkers who have the net are more likely to fall. We shared possibility of spectacular public failure, just not the guaranteed paycheck.
Our decision to quit our jobs was complicated by the minor fact that neither of us had ever built a web application. Paul had a tech background so he jumped into the CTO role. Although we had sufficient savings to pay a freelancer to code, at that nascent stage we didn’t really know what product to build. As chronicled a few weeks ago, we set about figuring out what this “Customer Interview” thing was that we’d read about while Paul taught himself the requisite technical skills.
Understanding that the decision to build the product ourselves would cost us time in the short-run, we rid ourselves of most of the luxuries (such as separate bedrooms) our previous jobs had afforded. This gave us a longer runway than we otherwise would have had. The ability for Paul to build our prototypes has been invaluable. While the prototypes we've built could be replicated faster by someone more experienced, in aggregate we likely would have burned more time (and definitely more money) because we would have built more feature-heavy prototypes. With Paul operating as a one-man coding team, we don’t have the luxury to build stuff people don’t want.
No matter how simple we try to make the prototypes, Paul always has a coding to-do list a mile long. While I’m not envious of the length of the list, I sometimes get jealous of the nature of the items on the list. Although many items require a lot of effort and creativity, they typically have definitive resolutions.
There’s nothing that gives me more pleasure than creating a to-do list and crossing things off. But when my to-do list is filled with vague aspirations like “get more users” and “learn Twitter,” I rarely get the satisfaction of completing a task and putting it behind me.
I sometimes feel as though I’m drowning in abstract tasks that are indefinite and ongoing. While I’ll lament about the menial tasks that creep onto my to-do list - respond to e-mails, handle accounting (pretty easy – what’s 30% of $0 revenue?), pay bills, etc. – these completable chores are a guilty pleasure.
It’s ironic that one of the main reasons I quit my old job was because I got bored with the assembly line mentality of trying to build the same widget faster. I wanted to escape the comfort and cyclicality, and certainly got what I asked for. Now that I’m navigating startup land without a map, I find myself searching for these types of layups, craving the brief dopamine kick of actually completing a task.
Just this past Wednesday I groaned when I realized my COBRA health insurance ends at the end of this month. I was staring down the barrel of hours of research and phone calls to determine what options were available for me. I’m happy to report this story has a happy ending, and it only took an hour to cross that health insurance line item off my to-do list.
It turns out I can’t afford it.
Image: Wikimedia Commons