In 2008, Patrick McGinnis was working on Wall Street at AIG, working his way up, doing everything he was "supposed" to do. Then, in the depths of the Great Recession, the company received a government bailout, its group was put up for sale, and the AIG bonus scandal made headlines. Suddenly, everything McGinnis worked for was tainted with the letters A, I, and G at the top of his resume.
So he diversified his life, of course.
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He started a few small investments that grew and grew alongside a new philosophy he explained in his book, The 10% Entrepreneur:Live Your Startup Dream Without Quitting your day job . We asked McGinnis how to dip a toe in the water of business ownership.
Most people think of entrepreneurship as an all-or-nothing proposition. Why is this wrong?
The falling price of technology coupled with widespread connectivity has clear implications for anyone who has dreamed of doing something entrepreneurial. I would say that it has never been so economical and easy to start and run a business, technology-based or otherwise. You need little more than a laptop, an internet connection, and a smartphone to run the day-to-day operations of a small business. It also made it possible to run a part-time business, on the side, while maintaining your day job. You can be entrepreneurial, tailoring your commitment to your life, resources, and interests and passions.
For someone looking to take the leap into entrepreneurship, why would 10% be better that 100%?
Starting an entrepreneurial business on the side helps you alleviate some of the biggest challenges of full-time entrepreneurship. You can test ideas, try out business models, and fail without having to worry about paying the bills. By starting something on the side and making sure it works before you go all-in, you give yourself the lead to get it right. Basically, you reduce the risk of the pattern before you go all-in.
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What do people need to plan for before they make that 10% leap?
The biggest downfall from full-time entrepreneurship is – being since you only spend part of your time on your side business – you will progress more slowly than if you were working full time. It's a reality. But here's the other reality:The typical startup takes seven years from founding to exit. Despite the legends and myths, there really is very little overnight success. So adding months, or even years, to a company's schedule to minimize the construction process is a reasonable compromise.
How do you manage that without bothering your everyday boss?
A cardinal rule of the 10% entrepreneur is that your day job must come first. After all, it's your day job that builds your 10%. You must act with integrity at all times regarding the division between your day job and your side gig. Blurring this line is much more prevalent than you might imagine. In fact, at a time when more than 30% of Americans are having hustles, it's not an uncommon concept at all.
Are there types of entrepreneurship that are better suited to this foot-in-hand approach water than others?
I've seen 10% entrepreneurs in all kinds of industries. Invest in real estate, technology, restaurants, fashion, old economy companies, etc. That said, the best businesses are ones where you can build them gradually and don't need to deploy a significant amount of capital up front. Plus, you'll be more effective when you can leverage technology (from your smartphone to social media) to get things done. Asset-intensive industries that require raising external capital are not as suitable for 10% entrepreneurs.
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This article originally appeared in the June 2017 issue of SUCCESS magazine.
