There are different approaches to entrepreneurial careers: either the entrepreneur quits their 9-5 job to fully focus on their new venture, or they try to balance an old job and a new venture side-by-side, until one of them becomes more dominant down the line. When talking to younger generations, one can often hear the argument of “Why stick to a 9-5 office job when I could be the next Google or AirBnB by simply quitting and working for myself?”.
American venture capitalist and author Patrick McGinnis believes in an approach he calls the 10-percent entrepreneur, through which people can pursue their entrepreneurial path while maintaining their typical day job.
Business Forward sits down with McGinnis to dissect his approach, understand why he vividly believes that it is the future and why one should diversify one’s work activities.
What is a 10-percent entrepreneur and how did you build your approach?
The reason I did this goes back to when I was working in Wall Street and my company went bankrupt during the financial crisis of 2008. I realized I had never diversified myself and decided I need a way to do that. So, I started pursuing my own ventures on the side to build a portfolio of economic activities that would be mine.
The 10-percent entrepreneur is a great way to get started in entrepreneurship. Some people will go full-time entrepreneurial and that is great. But there is a very small percentage of people who have the financial flexibility or the courage to become full-time entrepreneurs. For everybody else, this new approach is a great way to start small and build from there – namely using 10 percent of your time and resources to work on the new venture. It provides a person with the stability of a day job, while they can still enjoy the upside of entrepreneurship. You get the diversification and you get to be the owner of something. You learn how to be an entrepreneur.
Could the 10-percent entrepreneur approach curb risks associated with the full-time entrepreneurial experience?
That is one part of it. The other part is that we live in a time when entrepreneurship is the fastest growing part of the economy. There are so many risky opportunities that we can take part in. And that is a great way to explore entrepreneurship in a risk-mitigated way.
What does one win and lose by becoming a 10-percent entrepreneur?
Benefits are that we live in a time where it has never been less expensive and easier to be an entrepreneur. So, ventures can scale up from startups to million-dollar companies in a few years, if it really goes well. The fact is that you do not need tons of capital to do it. The risks are that, statistically, if you look at the numbers, most startups fail. Even if you have really smart people and you get great investors, and you have a good idea, chances are pretty good you are still going to fail. And so, if you go into your venture full-time, even if you thought it through and prepared, you could still fail, while starting with only 10 percent of your time can be a great way to avoid that situation.
Could the 10-percent entrepreneur approach be implemented across the globe, regardless of the maturity of ecosystems and levels of education?
My book “The 10-percent Entrepreneur” includes case studies from all over the world. I made sure that no matter where you are, you find examples that are relevant to you. It is a very flexible model. I receive emails and tweets and messages from all over the world from people who are actually implementing the approach. I am pretty convinced that it does work.
It is an advantage when you receive a fancy education. You have a network and you have access to capital. However, I did not want people to read this book and say: “Easy for a guy who went to Harvard.” I did not want to hear that. So, I made sure that I included people from all over the world.
Why do you think the 10-percent entrepreneur approach is the future?
Because [people who adopt this approach] are innovating outside their day job; they are going to learn entrepreneurial skills and think like innovators. And they will make sure the companies they work for are able to compete and innovate. I think it is so important for companies to have employers who are innovators.
How would you describe a successful startup?
The founding team should have relevant experience. The team should have complementary skill sets. Instead of building something and hoping it works, they should spend a lot of time testing the market and ensuring that they adapt their product to the means of the market. Finally, if it is not working, they should not keep trying to do it; quit and start something new. All these things are what make a successful startup.