Jack Abraham, founder of Milo.com which was recently acquired by Ebay for $70M+, came to speak to my Enabling Technologies class today. He had amazing insight
on what it means to be an entrepreneur and why (if you want to do it) you should do it now
Here is the PDF version of some of his most insightful answers that a friend (Steven Dong) transcribed.
Jack Abraham Snippets from Lunch [PDF]
Here are the key takeaways I gleaned:
1) Being successful as an entrepreneur includes luck, but it is more just working your ass off
. Being "resilient" as Jack put it. Facing tough times, bad ideas, ideas that big companies take, and literally every and anything and just doing it. He told my class, "If you never give up, you have a 100% probability to be successful." His message was basically work work work work work. Don't stop. Work.
2) There is a high opportunity cost in waiting to pursue entrepreneurship. If it is right for you, do it now
. Leaving school might be your best option. If you leave now and fail, you can always come back, follow a stable path and get all the resources your college has to offer in terms of career services. If you wait, you might either miss an opportunity, fail as an entrepreneur when things really matter, or (worse) get sucked into the gold handcuffs
(explained in the PDF).
3) Get credibility
. Sourround yourself with credible people as mentors, advisors, etc or drop out of an Ivy League school. Show VCs, angels, potential partners, that you know what it takes and you're willing to do it.
I still recommended reading the transcript
. I was extremely excited after hearing him speak and just want to do something big now!
Full transcript (if you don't like PDF's) after the break.
1. As someone who is young, no experience, no track record, and probably no sense of how difficult everything is in front of you, how did you gain the credibility to get in bed with the big Silicon Valley investors, specifically the PayPal Mafia?
As far as credibility goes, if you surround yourself with people who have credibility, you instantly gain some sort of credibility. Whether it is advisors, investors, legal, etc. Surround yourself with the people who have credibility and you'll be fine. However, if your really trying and dedicated, drop out of school. There is no greater amount of credibility a young entrepreneur can gain than someone who is dropping out of an Ivy League education in order to move to silicon valley and begin his startup. That shows anyone that he is so convinced what he has will work that he's willing to give up everything for it.
2. How did you make that decision to drop out of school? That’s a hard choice to make.
The way I see it is very straightforward. Think of life as a train ride. You can hop on different trains to get through it. Since your all Wharton, let's assume that there are only two trains in life. The corporate train and the entrepreneurial train.
The corporate train is a train that will be around forever and ever. This is a train that comes by regularly, once every semester in an event called OCR, and is available to you at any point in life, forever. There is always a job for a consultant, accountant, IBD, S&T, blah blah blah. You can apply at any point in time.
The entrepreneurial train is rare. Extremely. Rare. It may only come by, if you’re lucky, once in a lifetime. There's only a small window of opportunity where you can hop on and you never know when you are thrown off. If you can get on this train and go for a few stops and decide that you don't like this train, you can hop off and jump back on the corporate train at any time. But the opposite doesn't apply. You can't just jump off the corporate train and then jump back on the entrepreneurial train.
(He was referring to the fact that he can come back and finish his education anytime. If Milo wasn't successful, he could come back to Wharton, go through OCR, and have a better chance of landing a corporate job than anyone else who was applying. Corporate guru's look for the "go getters" of the world. People who are self motivated and self driven. A failed entrepreneur who has failed holds more experience and is more likely to get an entry level corporate job than someone whose studied hard in college and just graduating. Being an entrepreneur and failing improves his chances of getting a corporate job. . . if he ever chooses to go that route.)
A lot of you have heard that it's easier to get a corporate job, get some "experience", and then go be an entrepreneur. This doesn't happen. Why? Because of the golden handcuffs.
What are golden handcuffs? They are the very things that tie you to your corporate job.
A) Lifestyle. Your starting salary is usually pretty decent, allowing you to live a certain lifestyle. It is very difficult for someone who is use to living a certain lifestyle to step down, bootstrap, and live the life of an entrepreneur. I'm ok with living on an air mattress and eating ramen all day. But if I had been working for GS for two years, walked around in Gucci suits all day, it would have been impossible for me to change my lifestyle down to ramen and air mattresses. This goes for most people.
B) Your work load decreases and your salary increases. Every year you get paid a little more and you get a little less work. By your second year your making more money than when you first started and your doing less work. It becomes harder and harder to quit your job when your getting paid more to do less. Especially when your quitting your job for something that could potentially give you absolutely nothing.
C) Corporate skills are good for the corporate world. A lot of what you do in the corporate world doesn't not directly translate into the entrepreneurial world. You don't have a billion dollar budget or a zillion people network of connections. A lot of what you learn and do at big firms just doesn't work on the small, startup level. The "experience" you gain doesn't really help at all for you to do a startup.
The truth is, as you get older, the less likely you are to do a startup. As you have a spouse, or have kids, people who REALLY depend on you, you become much less likely to actually go do something as risky as a startup.
At the end of the day, silicon valley investors are more likely to bet big on young entrepreneurs than older ones. Why? Because they won big with Yahoo. With Google. Zuckerberg at Facebook. Heck, even Apple. Those guys were young as hell.
3. What does it take to be an entrepreneur?
Resilience. One time I was meeting with a member of the paypal mafia. It took me a rediculous amount of time to get ahold of him and get a meeting out of him. (He told us the whole story about how he followed up with this guy for weeks on end. Most of the time with no response. This was AFTER he was introduced to this guy from someone he invested in the past) Finally he replied to my emails with three words.
"Wheres the deck?"
I replied with "Well I just want your opinion and I'm not really looking for your investment. I'd just really like to have coffee with you. I'll be in San Fran on Saturday, when would be a good time for you?"
No reply. I sent out another email on Friday. No reply. I sent out another message on Saturday. No reply.
Tuesday I called up a guy who worked with this investor, chatted with him on this guys availability and whether he got my twelve billion messages or not, and he replied with. Send him the slide deck."
So me and my co-founder hurried and put together this amazing slide deck, sent it to him and within 5 minutes got a reply. Two words.
A few days later I got a phone call. For the next two hours he ripped my business, me, my co-founder, my mother, my father, my life, my aunt, and everything I could ever think about .. . apart. At one point he even went to say that I would have a better chance being the quarterback of the Dallas cowboys than ever seeing this venture succeed.
Throughout the entire conversation I just wanted to tell this guy, "FUCK OFF. Who do you think you are?" I kept telling myself, he's from PayPal, he must know what he's talking about, I should just hear him out. Nothing bad could come of it if I just hear him out. If I tell him what I want to tell him then I'll just be screwing myself over.
So I took the abuse. I told him thank you very much for your insight and I look forward to meeting with you in person soon. He hung up, immediately, without a goodbye.
Over the next few days I analyzed everything he said and did research on all of the concerns that he had. I wrote back to him.
Hey. I understand your concerns and I looked into them. I prepared this agenda for our meeting and I'll be up in San Francisco this next week. I'd love to buy you a cup of coffee and chat with you some more about the issues that you pointed out in my business.
He finally put me into his schedule and I got the coffee chat with him.
15 minutes into the conversation, he stopped my pitch and said.
Ok. How much?
I told him, I wasn't looking for an investment. I'm really just looking for your advice.
He said. "No. How much?"
At that point I was in.
Later on I found out that he does this to all the entrepreneurs. This is the barrage of tests that he puts everyone through to weed out the weak. Not all Silicon Valley investors do this. But you can be damn sure that the better investors do.
There's a saying in Silicon Valley. If you’re asking for money, you'll get advice. If you’re asking for advice, you'll get money.