The latest stereotype perpetuated by the media regarding entrepreneurship is that it is populated with 20-year-old master programmers who survive on a diet of ramen noodles. While this may be true of Silicon Valley it is hardly a true reflection of all entrepreneurs. Increasingly entrepreneurs are people of all ages transitioning from the typical 9 to 5 corporate job to the life of entrepreneurship.
Some may question why anyone in this highly unstable economy would choose to transition from the relative security of a corporate position to the instability of entrepreneurship. The reasons are varied but include the following:
(1) Freedom and Flexibility: While entrepreneurs are infamous for working long hours, they work on their own schedules. An increasing number of people are rejecting the regimented corporate structure. Not only do they want flexibility to pursue their own personal interests and passions, but they increasingly want the freedom to pursue personal goals and tasks on their time and not schedules artificially created by others.
(2) Equity Ownership: While corporate salaries are steadily under pressure from various forces including globalization and automation, the long-term financial benefits of remaining as a lifer within a corporation are increasingly diminishing. With salary increases barely keeping up with rising costs and inflation, reduced benefits and pensions, and lack of loyalty from corporations, many corporate employees are wondering why they should bother being a "hired gun." Although startups have average pay and long hours, the equity ownership partially compensates and also provides a sense of stability (since it is difficult to remove an equity stakeholder) and provides direct financial incentive for the hard work put into the company.
(3) Better Alignment With Personal Goals and Ambitions: The regimented nature of corporate work is increasingly leaving individuals crestfallen as they increasingly feel that corporations treat individuals as widgets rather than as human beings. Individual positions are not the only ones that give this negative perception, but also the inflexibility of corporate structures that allow for industry or functional transfers. For the most part, very few individuals pursue a career path that solely follows one industry or corporate function. As individuals develop over time, personalities and personal goals change. Unfortunately, the regimented nature of corporate work makes it very difficult for individuals to change industries or corporate functions if they so desire.
(4) Growth At Their Own Individual Pace: The biggest obstacle for individuals in a highly regimented corporate structure is not being able to advance at their own pace or acquire the skills they desire to learn. While some companies reward aggressive star performers, the bulk of individual employees are left to traditional promotion processes that rely more on checkboxes and time rather than individual customization and goal setting.
While the individual reasons to become a transition entrepreneur are clear, one may question the socio-economic value of a transition entrepreneur. With the dynamic changes occurring in today's global economy, there are number of socioeconomic reasons to support the transition entrepreneur, including:
(1) Transitioning Economy: With the economy transitioning from a mass-produced manufacturing business model to one based on artisanal individual contributions, it is increasingly apparent that while large multinational corporations will still play a role in the overall economy, they will require less employees due to technology and efficient processes. As such, it will be increasingly critical that the number of businesses grow to compensate for the number of potential employees continuing to grow, as well as to compensate for the rightsizing of multinational corporations.
(2) Experienced & Diversified Personnel: While it is heartening that an increasing number of individuals are striking it out on their own, in reality not all of them will succeed. As such, this provides larger corporations the ability to select from a more talented pool of individuals thus boosting their own productivity and effectiveness. Just as "boomerang" employees provide benefit to a corporation by leaving it for another corporation but return later to the "parent" corporation, transition entrepreneurs also have the opportunity to provide benefit to the corporate structures to which they transitioning back.
(3) Better Corporate Employees: One of the most common complaints heard from corporate employees is that their organizational processes are slow and inefficient. While true on some levels, unfortunately many employees may not understand the complexity and issues that prevent a corporation from moving quickly on organizational processes. The experiences that individual receive as they build their startups will provide them with insight into the difficulties of maintaining a multinational corporation, should they choose to return to a corporate environment. Not only will it provide multinational corporations a more process-tolerant workforce, but it could provide them with employees who are willing to improve processes in a proactive manner.
(4) Reduced Social Security & Retirement Burden: The changing nature of the economy means a number of previously held sacrosanct assumptions are now up in the air, including the availability and fundability of retirement pensions and benefits. In the past, retirement pensions and benefits were always fundable since the next generation of employees funded the pension of retirees. However, in an age of downsizing, global competition and automation, the size of individual corporate workforces are being swamped by the number of retirees. Since transition entrepreneurs leave the corporate environment, it means that there are fewer newer potential retirees to burden the already strained retirement pension and benefits system.
Whatever the reasons that individuals decide to transition from a corporate position to become an entrepreneur, the benefits that can be accrued from such a transition are beneficial to these same individuals, society and corporations. Becoming a transition entrepreneur is a risky proposition, but the benefits are increasingly outweighing said risks.