Marine Corps and Startups
Wait, these two have nothing in common. Well, sort of.
It’s the Marine Corps birthday today, which of course has me thinking. Well, it has me thinking about lots of things, but one of them is about the past. I know, I know… you can’t change it so it doesn’t do much good to think about it, but I’m human. As much as I’d like to claim some superhuman ability to be “present” and not dwell on the past or dream about the future, nights like tonight I have a hard time not reminiscing.
Tonight’s topic: how is it possible that it’s 17 years after graduating from college — 3 years from retirement if I had stayed in the Marine Corps on Active Duty — and I feel so far from financial security?
To be clear — I’m not broke. Financially I mean. Emotionally is a post better saved for a longer night! Seriously, though, I grew up with blue-collar parents in a middle-class house in a great small town. Went to school for “free”, had a guaranteed job with great starting pay, and have enjoyed white collar salaries since getting out. There’s food on the table and a roof over my head. This isn’t me writing out a “woe is me” sob story about my life. It’s been privileged on a lot of levels.
Instead, it’s just me trying to think through and figure out the answer to that question: how did I get here? Here being about to turn 40 and not feeling particularly financially successful given the amount of work I’ve put in. I think the answer lies in the title — Marine Corps and startups. More specifically, what the two have in common: risk.
My wife likes to joke “I should have known your judgment was off when you chose Marine Corps instead of Navy.”
But I think she’s right. From that initial service selection on through to job selection later in life, I keep choosing the riskier option. To be fair, I’ve always viewed it as consciously choosing the “harder” option with the idea that eventually somewhere down the line that will pay off. It has in some ways — the experience I’ve gained so far in terms of leadership in the Marine Corps and starting and growing companies at startups has been phenomenal. I think both the Marine Corps and startups repeatedly put me on the steep part of the learning curve, which is where most of the value is gained. That said, they’ve not been financially rewarding. While the military pay is not bad, it’s not amazing and I wasn’t in for that long, only 7 years. Startups, though, are pretty bad when it comes to salary, especially when you consider I had a family and high medical expenses added on top.
Granted I got some small amounts of equity, but the ugly truth is that unless you’re the VC or the founder, you’re equity probably isn’t worth much. Plus, as an employee, you don’t have that many companies that you’ll work for in your lifetime, so statistics aren’t exactly working in your favor since you’re not able to diversify the investment of your time across 30+ startups. Even if the equity is worth something eventually, it’s completely illiquid for a very long time. Which brings me a second level and related question — how have I worked so hard and not gotten financially rewarded?
Thinking about this I come up with three reasons:
1. The steep part of the learning curve = hard work, not financial rewards
2. Financial rewards aren’t the reason I’m on this path
3. I’m not at the end of the road, yet
What I mean by the first is that if you look at the specialization of society, we are more and more rewarding specialization with outsize returns. Warren Buffet had a great quote about this at his annual shareholder meeting where he explained this as follows (really bad paraphrasing to follow): long ago if you were the best farmer you might make twice as much as the other farmers; 50 years ago, if you were the top 1% of basketball players you could make a living playing basketball; today, the top 1% basketball player can’t play college ball, but the top .001% makes millions of dollars. (How bad did I butcher it?) The point is, society values and pays for specialization more and more as time moves advances. I’m mostly not specializing, some of it intentional (functional role and location) some of it not intentional (industry), so I shouldn’t be surprised that financial rewards haven’t accrued.
The idea of long-term financial rewards were a big part of why I started down the startup path, but they’re not the only reason and definitely not why I stayed on it for so many years — despite the strain it caused my marriage. I stayed on the path because, quite frankly, I loved it. It’s fun to be in a startup for so many reasons. Many of the same reasons I loved the Marine Corps exist in startups— great people, great mission, dynamic environment, lots of unknowns, time-constrained, requires a bias for action… it really is a great fit. The downside of both the Marine Corps and startups is the risk. In the Marine Corps the ultimate downside risk is death; in startups the risk is that the paychecks can and have stopped — multiple times; the investment, first of time and more recently of money, can and has been lost.
That said, a lot has changed since that original decision to make my own way in the world of startups. One, I had kids. Two, my values changed; the best summary I can think of is that a lot of deep thought about the topics in Clayton Christianson’s book How will you measure your life has made me think examine and realign my priorities. Three, seeing how the stress of startup life made me a worse husband and father and thrust so much unintentional stress on the family, especially these last two years while I was CEO, made me act on those thoughts about realignment.
After thinking through it all, that really is my conclusion: I’m not at the end of the road (or at least I hope I’m not!). I’ve consciously chosen the steep part of the curve to understand every functional area in a startup. While that may not be valued by corporate America because I lack specialization, it is a valuable skillset. In combination with my experience at early-stage companies, it means I can take an idea and grow it from zero to something. Someday I’ll do that with an idea of my own and that will likely result in the financial reward missing thus far. However, for now I’ve got three great kids that need a great dad to match. Time to focus on that because it’s worth more than money. Sometimes I just need to be reminded of that.
