BYE COMBINATOR
How To Launch a Startup After Leaving Corporate Leadership
You know how every executive’s LinkedIn post announcing their exit from their company says the exact same thing? “I’ve loved it here. I loved everyone I’ve worked with. I love our customers. Our leadership. I came here as an orphan in the wilderness, and I depart as an enlightened member of a chosen family.” We all know it’s bull$h*t. It’s especially bull$h*t for the exodus entrepreneur, who leaves corporate leadership to launch a new venture.
If that letter was honest it would say something like this:
I have spent the last decade of my career trying to build something that the world needs and doesn’t have in a company that’s bloated, bureaucratic, and politically dysfunctional. For every client who’s ever asked me why our sht is so expensive and not that good. Who I’ve tried to placate with tickets to the Superbowl, and dinner at a Michelin star restaurant. I’m sorry I lied to you and convinced you to keep blowing your money on stupid sh*t. You deserved the truth.
And now I’m prepared to give it to you:
I’ve built a product that was better, cheaper, smarter and faster than what you already buy from us. It was suffocated and killed because of political bull$h*t. So now I’m leaving to give you what you need and deserve. I’m taking the best Punks and Pirates in the company with me. Here’s a link to my calendar. LFG.
This is the honest origin story of many of the greatest startups of our time. It’s the path of most of the members of Punks & Pinstripes, (although they were much more tactful than me). And it was my path, I launched Punks & Pinstripes after banging my head against the conference room walls of Bloomberg as the director of new product innovation.
The economics of being a post-corporate entrepreneur are extremely promising. But the playbook is non-existent. I fill that void here:
The economics of being a post-corporate founder are extremely promising
Subscribers to the blog will have seen this before. It bears repeating: It’s a logical, sensible, rational economic decision to launch a startup later in your career. The average founder age of the .1% fastest-growing startups is 45, according to data from National Bureau of Economic Research. In 2023, the average unicorn startup founder was 52 when they launched their startup. A 59 year old founder has a 300% higher probability of a successful exit than a 25 year old founder.
When you reach that age you see why older founders outperform. At age 45, you’ve been through some sh*t. You’ve gone through a few cycles of boom, bust, and rebuild. You’ve seen billion dollar problems that no one else sees. You’re less daunted by things that are terrifying to others. You know what problems are best solved by big companies, and what problems aren’t. You’ve built an extended network of people who went through hard things with you and know you’re solid and trustworthy. You have a deep understanding of what you’re uniquely good at (and bad at). You’ve probably already paid off some of your mortgage, saved for college, and funded your retirement.
Unfortunately, most VCs follow dogma not data.
Somehow, the headline highlighting the stellar track record of post-corporate founders, got buried in the news about a 26 year old zillionaire who built an app using AI to autogenerate social media profiles, on the blockchain with a 3D printer in Sunnyvale.
Let me save you 2 years of your life that should be spent building a product and making money from it. VCs are sheep, who like to portray themselves as genius, contrarian wolves. They invest with dogma - not data. And they move blindly as a flock, believing themselves to have a unique investment hypothesis they formulated over drinks with another VC in a hushed whisper at the Cupertino Hyatt Regency Bar, who got a tip in a hushed whisper at the same Hyatt, from another VC a week before, and so on….
Part of their collective dogma is that founders need to be under 30, (and white, and male, but that’s a different post.)
The data proves over and over again that the most successful founders are 46 and older. The dogma is that you are the same age as acne-faced Mark Zuckerberg inside his Harvard dorm, doing jello shots. Don’t bother trying to change their mind.
Which is why you should bootstrap.
Once you have a 2-year track record of positive and accelerating cashflow, own 100% of your company, and the outlook has you thinking about taking a vacation somewhere nice with your family for the first time since you had a shitty corporate job, only then should you approach VCs. In fact, they will probably approach you - as a flock of sheep. (see above)
In very few circumstances does it make economic sense, at this stage, to give any of your company away. In a few circumstances they will provide mentorship, access to talent, tech infrastructure, or the capital to make large, overdue capital investments. If all of those things are true, then consider raising capital. But the right path forward is probably to still own all of your company. Pro tip: Read everything Jason Fried has written about this.
FIGHT WITH YOUR SPOUSE ABOUT MONEY BEFORE YOU QUIT YOUR JOB AND LAUNCH YOUR STARTUP.
There are certain lies that everyone believes are true about themselves:
We all think we’re great drivers,
We think we’re immune to advertising, and
We all think our startup is going to make billions.
Let’s talk about that third point for a second. Your checking account will shrink, you will take on credit card debt, you will be unable to attend your favorite cousin’s wedding in Italy because it’s too expensive. And you will fight about money with your spouse once you’re no longer getting paid every two weeks, and no longer have corporate benefits.
And no one will warn you about this, even though everyone’s endured it.
When you run a startup and you’re married, your CFO is your spouse. Except your new CFO probably doesn’t know what EBITDA is. They just know that bills need to get paid, and the checking account is getting smaller (incidentally, that’s probably the cleanest explanation of EBITDA you’ll ever hear). Make sure you get to some agreement about some basic financial thresholds: how much cash do you need in the bank to feel secure? Is it safe to dip into savings and investments? How will you pay for big emergencies (medical, taxes, home repairs, etc…)? How much do you need to contribute to retirement funds?
If you avoid that argument it will destroy both your startup and your marriage later on.
Sex Appeal Is For Suckers
The 60-year old guy who shows up at a rave trying to look cool, looks like a fool. The same is true for the post-corporate entrepreneur who launches an AI-startup. Don’t try to be the flavor of the month.
Solve an unsexy, painful, billion-dollar inefficiency that you can only see if you’ve spent 30 years trading derivatives, or underwriting insurance policies for metals and mining, or repairing tractors. You don’t want to be compared to the herd, so don’t compete with them.
Your first slide should be “WHY You Shouldn’t Do This”
When you speak to your first customers and investors, if you’re not a known entity, they will harbor a huge list of unspoken reservations. In their mind you’re an old, coddled corporate bureaucrat who’s been flanked by assistants, and chiefs of staff for 20 years. You don’t have the scrappiness to get messy, build, and launch. To them, you’re a PowerPoint jockey who hired agencies to do all your unremarkable marketing and engineering work. They will never tell you any of this. But they are universally thinking it. They’ve gotten to ‘no’ before you opened your mouth.
Which is why your first slide should be titled, “Why you shouldn’t do this.” In that slide be brutally honest about all the things you need and don’t have. This should include hard obstacles about your market as well as limitations in your team and technology. If it doesn’t hurt to say it, then you haven’t been honest enough.
Then ask, “If any of these are deal breakers, now is a good time to let us know. We’re happy to give you back your hour, and to move on with our lives. And if you're still talking to us, we want to share with you how we can solve this problem better than anyone else.”
What you communicate is “you can trust us more than anyone else trying to do the same thing.”
You’re not alone, so Find your tribe
One of the most pernicious effects of the mythology that founders are young is that post-corporate founders can’t find one another. They shoehorn themselves into communities that weren’t built to have them as a member. They borrow playbooks that were built for someone who has very little to lose if the whole thing blows up. I built Punks & Pinstripes for you. If you’re in NYC, and you want what we have you can apply before October 4. Apply here.
