On many, many occasions during a degree, you contemplate what will come next. Some people are completely set on moving on to get a PhD in Theoretical Physics, while others have decided that McKinsey is by far and away the best place they could start their career in business.
However, most people aren’t fortunate enough to have this level of certainty. For an intelligent, talented student like you, furnished with a diverse range of skills and experiences, about to receive a good degree, how on earth do you choose from the thousands of career options available?
First up, let’s simplify the problem. Let’s assume you are ambitious and you want to enter the business world in some capacity. Also, let’s assume you don’t want to work in a medium-sized, mediocre, low-growth company. You want a little bit more. You want to make money or you want to make meaning or both.
We can now divide the available options into 4 categories:
1. Join a Large Corporate (Investment Bank, Consultancy, Law Firm, Professional Services etc.)
2. Go into Investment Management (Private Equity, Venture Capital, Hedge Funds, Pension Funds etc.)
3. Start your own Company (or continue with your existing company if you recently started one)
4. Join a Start-up Company
The first thing to say is that there is no right answer. Each person has slightly different needs, priorities and values. To help understand what might be the best option for you, let’s weigh up the pros and cons:
1. Join a Large Corporate
This is the easiest option to take.
Pros: You get a good name on your CV, good training, your friends and family will be immediately proud of your new job, you get a good work-life balance (except in IBD!), you have relatively good job security and you receive a high starting salary.
Cons: It’s unlikely you’ll get public credit for your work, your personal development is likely to be quite niche and narrow (management consultancy is broadest), long-term financial upside is often low (relative to starting and selling your own successful company), your role often has little or no impact on the wider world, you’ll have to deal with internal politics, established organisational structure, and your department is always likely to get bent out of shape a little.
2. Go into Investment Management
This one is tough to do straight out of university. Elite Investment Managers may only recruit 2-3 new analysts each year and they often prefer applicants with 2+ years relevant experience.
Pros: High kudos – there’s no doubt these places are hot, you get a very good work-life balance (normally < 60hrs/week work), direct exposure to top people (both within the company and meeting clients), a relatively high starting salary, reasonable job security and high long-term financial upside (if you reach fund manager).
Cons: Training is on-the-job (albeit with some useful professional qualifications), your impact on investee companies can be significant although your pre-occupation with leverage and a target IRR (internal rate of return or “yield”) can conflict uncomfortably with their non-financial objectives, and personal development is again relatively niche and narrow.
3. Start your own Company
The scariest option – not for the faint-hearted.
Pros: Incredibly steep personal development – you have to learn and adopt new roles very fast, you can personally have direct impact on the world, it’s definitely best for getting public credit, it’s your idea so you’ll be super-passionate about coming into work every day, you have no boss, there’s no politics as everyone is equal to start with, you only have to work with people you like and there is huge financial upside if you nail it – you could become rich and famous.
Cons: no brand name for the CV, no training or guidance – you have to work out everything yourself from first principles, terrible work-life balance – the start-up will be your life, you risk public humiliation if it fails and you have no initial salary.
4. Join a Start-up Company
In contrast to jumping into starting a company yourself, this can act as an intermediary bridge.
Pros: Good for personal development – you’re likely to get stuck into lots of different areas, little politics (if it’s still a small team), salary is stable (especially if the company is VC funded), long-term financial upside is potentially high if you joined early enough to receive a significant (1%+) equity share.
Cons: Unlikely to be a brand name for your CV, no formal training, work-life balance isn’t great – there’s a lot of work still to do, less public credit than if you were a founder and long-term financial upside is still much lower than the founders.
Many of these pros sound great. How do I choose?
Do internships. Internships not only provide you with an education and insight into a prospective industry, but during one, you also get paid well and have a lot of fun (particularly in London).
Internships also help you work out what you don’t like. This helps you home in on what you actually do want to do.
For example, I interned in Investment Management with Lehman Brothers in the summer of my first year, did the Discover course with McKinsey in the easter of my second year, and then interned in Exotic Derivatives Trading with JPMorgan in the summer of my second year.
I had a lot of fun with each company and ended up realising that what I really wanted to do with my career choice was optimise for maximum impact, responsibility and personal development. This led me to entrepreneurship, and continuing establishing my business, GroupSpaces, as the obvious path to choose.
Kulveer Taggar, ex-President of Oxford Entrepreneurs society and Co-founder of Boso.com and Auctomatic.com took a slightly different path having spent 6 months at an Investment Bank after graduating:
“I actually did both, the graduate job before leaving to do entrepreneurship. In my case, I quickly realised I’d have more immediate control over my future by doing my own thing rather than working in an Investment Bank. I valued working with dynamic people and in situations where I was out of my comfort zone. Also, I very practically believed that entrepreneurship would get me to financial independence quicker than a graduate job.”
Now you could probably work out most of the pros and cons mentioned above for yourself – they’re freely available from many books, websites or people who’ve formerly walked down those paths. In fact, most people will have all of this information at their disposal by the time they make their initial career choice.
Why, therefore, is everyone not happy with their job? Why do some people regret their chosen career paths?
It’s because they didn’t think things through enough, they didn’t play the tape forward, they bought into some of the popular misconceptions people have today:
“But I thought…
- …starting a company is too risky.”
Is it? How much risk are you actually taking? When you graduate from fresh out of university, you’re young and broke. So you try starting a company for a couple of years and it doesn’t work out. You’re still young and broke. What are you actually risking? It’s only the opportunity cost of not getting a job.And anyway, having interviewed with many employers and worked as a professional Careers Coach myself, I know that experience of starting and running a business is valued highly by employers. The amount a candidate will have learned is now well understood – irrespective of success or failure.Not only this, but if your start-up fails, you’ll have learned many lessons from the mistakes you made first time round and you’re more likely to succeed if you try to start another company.
Lastly, it’s important to understand the relationship between risk and opportunity. Mark Andreesen (Founder, Netscape, Opsware and Ning) puts it well in his “Guide to Career Planning”:
“Without taking risk, you can’t exploit any opportunities. You can live a quiet and reasonably happy life, but you are unlikely to create something new, and you are unlikely to make your mark on the world.”
- …I need to get some experience before starting a company.”Charlie Osmond, Co-Founder & MD, FreshMinds very nearly bought into this misconception:
“During my final year at University, I happened to notice Richard Branson having dinner in a restaurant. I had just been offered a consultancy job and was trying to decide between starting my own business and becoming a consult. Who better to ask for advice than Sir Richard.
I ventured up to his table and he asked me to sit down. Having explained my dilemma he said “you should definitely take the consulting role. It’s a great way to learn”. I was rather surprised that he advocated the corporate route considering that he’d gone straight into entrepreneurship himself. In the end I chose to ignore his advice and start my own business on graduation rather than go into consulting.
It’s turned out to be a great decision and one that I have never regretted. However, eight years on, with a better perspective on my choice, when I am asked what I’d recommend, I often repeat the advice I was given despite having gone against it myself.”
It’s important to bear in mind your risk appetite as you get older – taking the leap of faith doesn’t get any easier. A certain level of ignorance, naivity and blind optimism can actually be a good thing for start-up founders. It can keep you going in the face of the inevitable doubt you will face from people.
Along with FreshMinds – Google, Microsoft, Facebook and Yahoo! countless other successful companies were set up by first time entrepreneurs with no serious work experience.
- …a big company will pay me more money.”
Yes – it will in the short term. You get a nice, large salary. However, you don’t get equity beyond a few token employee stock options. You don’t get access to a potentially massive financial upside in the future.How much money do you need straight out of university? Many people care much more about the money they’ll have to support their family and live when they have the time to enjoy the money. If this is the case, then surely long-term financial upside should be what you are looking for?
What is more, money is just one currency. What about learning skills and developing a network? Do they have value? Did you think about them? What would you learn in that job you are considering? Who will you build relationships with? Even if you do ultimately want money, is it therefore better to choose the option which will give you more money now, or the option which furnishes you with the tools required to make a lot more money? For example, starting up a company will require you to learn financial, legal, sales, marketing, strategic, management and many other skills. Surely learning all these has serious value?
In his “Guide to Career Planning”, Andreesen went on to say:
“After graduating is when you should optimize for the rate at which you can develop skills and acquire experiences that will serve you well later. You should specifically take income risk in order to do that. Always take the job that will best develop your skills and give you valuable experiences, regardless of its salary.”
I’ll leave this debate with a closing quote from Charlie:
“Overall, there is no right route, whatever decision you make, the key is to learn from it and reassess your options. Don’t get stuck in a job and find you never take the risk of starting up. Equally, if you start something that’s going nowhere, make sure you fail fast and move on.”
You can view the original version of this article on page 8 of the most recent edition of The Gateway.
Posted by davidlanger 
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