Failing at Entrepreneurship While You Are Young Is Great
My Perfect Job
It was early 2006, and I had what most people would consider a perfect job.
I worked as a Developer Platform Evangelist for Microsoft Corporation, delivering labs worldwide to Microsoft Partners and teaching how to migrate applications to 64-bit computing. I was working as a contractor, commonly called a v-(dash) in the Redmond/Bellevue corporate lingo.
My life was great, and it was also great for my main employer. “Rent-a-geek” as I call it, is very profitable given the right customer, and we always delivered to Microsoft on time and on budget.
One week, I was in Silicon Valley, then London, India, Seattle, Sweden, Boston, the Netherlands, Korea, Building 20 (the old main campus training center), and the list goes on. If you are curious, you can take a glimpse of my globetrotting in my post, Road Warrior.
The usual joke with my fellow trainers was, “What continent are we in today?” We lived in an eternal state of jet lag, but who doesn’t want to travel the world, all expenses paid, while doing something you love? It was the perfect job.
Then I quit my job to go headfirst into entrepreneurship.
And it was the best thing I could have done in my life.
It all started when I received an email from an ex-Microsoft employee who was starting his own company and asked me to help him with a potential project he had. I traveled to Seattle and was interviewed by a project manager (although if you have worked at Microsoft Corporation, you might notice that everybody seems to be a project manager).
The interview went great, and the project was approved.
That same night, I got a “formal” proposal from a hotmail address. A very nice rate for a three month project. Three months! It seemed like a tough choice and a risky one as I had a perfect job, and I'd been working for more than five years with the company that gave me the opportunity to work with Microsoft.
On the other hand, I had an offer for a short term contract that might be extended and turn into something better… Or maybe not.
Did I mention that, in my home country of Costa Rica, severance packages are mandatory and pretty high, unless you quit? It wasn’t an offer to start a company; it was a leap of faith to do a project, and if it worked we could take it to the next level.
I also had a hunch that this guy may not be the best choice. I ignored it.
What I learned: A hunch or gut feeling is your subconscious detecting a pattern that you can't yet explain. Listen to it, but consider all factors as sometimes making the wrong choice can be good for you as well.
Letting Go of the Perfect Job
And I did it anyway. I picked up the phone, called the Human Resources department, and told them I was leaving.
Did I fear failure? Of course, but not enough to hold me back.
I also learned: To move ahead in life, you need to take action. John Sonmez said it very nicely in his Soft Skills book. If you start moving, it is easier to correct your course because you will have momentum.
Sometimes, you overthink too much, commonly called analysis paralysis, and opportunities pass you by. More than opportunities, life passes by, and you may wake up one day and regret everything you had an opportunity for and your own inaction.
Human resources tried their best to keep me in the company. Just as an interesting note, I'd been asking for a raise for a while, and they always said no. They were probably very confident that no one would leave the perfect job. They offered me heaven and earth, including doubling my salary. That actually made me want to leave even more as it just reinforced how valuable I really was to them.
I sent in my resignation letter that same day.
It was a very direct and friendly Dear Company, I quit. Thanks a lot! letter. I still had a good relationship with them, so no bridge was burned. I was counting on it in case my contract was not renewed after three months, forcing me to crawl back with my tail between my legs to ask for a job at half my leaving salary.
Something I learned: Leverage is really powerful. You might be in a position where you are 100% sure you are being downplayed, but if you don’t hold enough bargaining chips, you might not come out with flying colors out of the negotiation. I am not saying you should quit to get a raise, but it has worked for me twice in my life.
And a word of advice: You have to be also very careful of not falling completely on the other end of the spectrum. Some people believe they deserve more than what they have earned. I’ve seen this trend especially with very young developers who think they will land a job at Facebook or Google right after graduation and make several hundred thousand a year.
You first need to work hard to reap the benefits. You need to earn it first.
And then my adventure began at age 26. I took a plane straight from Boston to Seattle without going back home to Costa Rica. All the time that I was traveling, I was using a corporate credit card, which I had to send back.
I only had $300 in my wallet and a $500 limit on my personal credit card. Finances were tight! I was young and totally used to swiping my corporate credit card and sending an expense report. This was a totally different experience as I was on my own.
I landed in Seattle and rented a car for a week (goodbye $500 limit on the credit card) and stayed for the first few days in a $29-a-night room near the Seattle airport. In theory—cross my fingers—I was going to get a cash advance from the new project and then get all the details sorted out.
About one week later, I got a $1000 cash advance, and soon after, all legal and financial details got sorted out. I could finally move into a shared apartment near Lake Sammamish in Redmond, about two miles from Building 120 where I was going to provide my rent-a-geek services in Microsoft’s main campus.
The cheap hotel was one hour away, but it is impossible to get anything cheap in the Bellevue/Redmond area.
What I learned: Sometimes getting started means you have to take a chance or two, and you will probably have to make sacrifices and compromises. Measure your risks, take action, and hope for the best.
I Am on My Own
I started working with Microsoft InfoSec, helping secure high business impact information. This was the three month project. It went well so I got another project, this time with Microsoft Consulting Services creating a SharePoint portal for CEOs and business people. I participated in a few more projects until, one day, I had a talk with the person who hired me.
At this point, I was providing consulting services on a one-project-at-a-time fashion, but he got me thinking: what if I went back to Costa Rica, and we started a company together? It sounded like a good opportunity to scale and get the company to grow. We were going to be business partners.
What I hoped for: For this job, I got paid per hour worked. Creating and scaling a company (even at small scale) means getting people to work for you and getting paid for the hours they work, not only your hours. And I knew that I wanted to create my own company.
Starting The Business (The Second Opportunity)
It was another opportunity, so I took it. Without telling anyone, I booked a flight back home. I remember getting to my parents place to say hi, and they asked me with a very surprised face, “What happened?”
Nothing happened. I just took a chance to create something bigger.
A few months later, I bought a house, and it was still empty; thus it became the first company office. Two floors, three bedrooms. I lived in one bedroom, and the other two became offices.
In a stroke of luck, I had two friends who quit their job recently, and they were working on their own dream—game design—but needed work to support their initiative. So they joined as well, and one of them is the best developer I know. He was known as TOC, or table of contents, as he always had the answer for your question. I still admire his skills to this day and hope to get the opportunity to work with him again.
We started to scale.
My now business partner who lived in Seattle was in charge of selling, managing US financials, and getting contracts. I was in charge of delivering, hiring, Costa Rican finances, legal work, dealing with bureaucracy, programming, project managing, pre-sales, delivering, presentations, demos, and pretty much anything required to grow the company.
I was basically the jack-of-all-trades swiss-army-knife guy for a while. In fact, I hired an assistant until we hit the 12 employee mark and an office manager at the 20 mark. The office stayed at my house until we had 8 employees. I took the “he lives at work” phrase literally. Even days when I had parties at home, I always had to remind my guests not to use the servers to place food or beverages!
What I experienced: Unless you are a funded or backed up startup, it usually means that you may have to do all kinds of work. I was president, janitor, and everything in between.
Growing the Company
The company kept growing, projects were delivered, and we kept hiring. It was quite a challenge, more than I am sure my business partner ever realized. We had a couple of problems.
Our first problem was that we were a small startup company where the office was in the 26-year-old president’s house in a third-world country ,and we were providing services to Microsoft Corporation. If I brought in someone for an interview, it may sound a little bit farfetched. If we were providing services to one of the biggest companies in the world, shouldn’t we also be in a fancy office?
People tend to forget how some big companies start in a garage. When you are getting started, it is critical that you plan ahead and save as much money as possible. Contracts and payments from customers may delay, but payroll must never be late. You should never ask your employees to wait for their paycheck!
Something we did right: If you keep your burn rate low, it gives you more runway to scale and adapt. Extra cash means being able to hire employees before you need them, allowing you to train them and get them up to speed instead of hiring them when there is an urgency and throwing them to the wolves to fend for themselves.
So many projects fail because people are not trained properly, and that’s why online training is so important, as Pluralsight can indicate.
But the first problem did not come alone. I ran face first into Costa Rican culture. In my home country, the employee mentality is rooted deep down in most people. Entrepreneurship is not the most common way to go.
Instead, everyone wants to get a job, work their hours, get a paycheck, rinse, wash, and repeat. When I was hiring, I had to inspire people into joining this small company that would grow and do great things! Come join me! You can work on world class, bleading edge SharePoint or Dynamics CRM projects!
Whenever I was doing an interview, if I liked the prospect, I had to switch hats and sell him or her the idea that we were what they needed to get ahead in life. It was tiring, but I did a very good job as I hired some great guys.
What I learned: If you inspire people, you can get them to work for more than just a paycheck. They can join you in a quest.
I also had to pull a few Houdini’s from time to time. Two weeks before we got our first real office, we received an email that a Microsoft Director of ISV Marketing and the CEO of a Microsoft Partner were in town and wanted to see the office. Crap! Which office? The unfinished one or my house full of cables and servers?
Also, being young, I had two big, off-roading, vintage Land Rover cars with no windows and an oversized, lifted Dodge Ram that was in no way fit for carrying around a couple of execs. I solved this problem with flying colors by:
- Asking my uncle for his nice executive style car to tour them around
- And instead of taking them to the office (or my house), I took them around the Free Trade Zone office complexes where Intel, Amazon, HP, Sykes, Microsoft, Boston Scientific, and many more transnational corporations have their technology and support centers. I made such a good impression that the CEO of the marketing company opened an office in Costa Rica which now has about 200 employees.
As a side note, Costa Rica used to be big on coffee and tourism, but now it has evolved into technology and call centers. After my initial failure, one of my next ventures includes owning a small call center, and my US customer is delighted with our level of service!
What I learned: Do the best you can with the resources at hand. You will be impressed at what you can do with some imagination and careful planning.
Realizing I Made a Mistake
Time went by, and that’s when I realized how I made a mistake.
When we decided to open a company in Costa Rica, we never discussed what was my percentage of ownership. We talked about ranges but we never decided an exact amount, and worst of all, we did not put it clearly in writing.
You see, when we started, it was all very fast, so we started under my Costa Rican company with an aim to create a new and fresh company once the startup took off. This could’ve been potentially disastrous to me if the startup failed as debts and employees were solely my responsibility.
As a real world example, one of my college professors started a game development company with some people from California, and when the company failed, he was personally liable for all debts, which he will probably have to work for 150 years to repay.
Luckily for me, that’s not what happened, but it could’ve ruined my life early in my twenties.
What I learned: Just like in the story of the chicken and the pig, be careful if you are committed while others are just involved. Take risks, but calculated risks. Share financial responsibilities with the others involved, and always make sure you know what the worst case scenario can be.
When it came time to take it to the next level of creating a fresh new company, that’s when it bit me in my behind. As the percentage of ownership was not clear, I couldn’t negotiate more than 5%, when I was personally responsible for the development success.
I am horrible at sales, but without my development lead, the company would not have grown the same way. If you need some help in estimating your percentages, there is a great method called “The Founder’s Pie” that I recommend you take a look at.
What I learned: You need to put everything clearly in writing as early as possible. You need to think of any possible outcomes and be in a position that you are comfortable with. My grandfather was a very prominent politician, and he used to say, “I trust you, but sign here first.” Sadly, I failed to follow his advice.
Something else I learned: Don’t ask for too much, but don’t undervalue yourself. That’s the part I always used to fail at. I usually undervalued myself too much. And yes, it is hard to estimate what you are worth.
But how am I so sure of my value? It is very simple.
I already had a few difference of opinions with my business partner, but the one I think was the trigger of me leaving was that, in a Starbucks in Bellevue circa 2008, we negotiated what was going to be my end of year bonus as a partner in the company if we reached a certain amount of sales.
Our agreement was clear to me. He offered three bonus levels based on company performance. Given that I trusted him, we didn’t put in writing the exact scenarios with amounts. I flew back home hoping for the big paycheck next year when we met our objectives.
As you probably are already expecting to read, when the year was over, we met and exceeded the quota, but my partner used the “we need to save cash” excuse to avoid paying me what I was owed.
He knew the number, he knew I was right, but in an episode of undervaluing myself, I accepted only 10% of what I earned in all rights.
But it wasn’t the crisis. Now that we were profitable, I think greed took over, and he realized that he didn't want to share the profits with a 20-something even though I was the reason the company flew.
I later found out this was his third attempt at creating a company; the previous two failed.
So I decided this was the end. It was Friday morning, and we were having a heated conversation. I just told him, “Find someone else,” and hung up.
This was probably the most stressful couple of days for this guy since I just hung up and never took any more calls from him, being as upset as I was. And even though I was the owner of only 5% of the company, I had unlimited power as president of the company—and did I mention we had a quarter of a million dollars in cash in the bank?
With this money and current contracts, my full bonus was not that significant. The story could be totally different for everyone involved, but it wasn’t. As I left the building, I just logged into the online bank manager, paid myself the last two weeks salary, and took off. I didn’t take a cent more, not even what I was rightfully owed.
Word of advice: Be careful with money. I could’ve taken my bonus and severance, but that would’ve probably ended up in a legal battle and I did not want to take it to that level.
The Beginning of the End
My business partner flew from Seattle, and negotiations were very sour. I still owned the domain and access to a lot of things that he didn’t even have. If he didn’t get everything I had from the company, it could be badly affected.
But this is not only a company.
It was a group of 24 hardworking individuals and their families. If I did something to hurt the company, I would also be hurting them. I ended up negotiating with one of my initial hires and gave up everything for a fraction of what my shares were worth. It was a big loss for me, not only in terms of money but also because I loved the people I worked with in Costa Rica.
What I did: I chose to lose to avoid affecting those I cared for. Don’t be evil. Karma will take care of you later in life, so don’t be the one causing damage. And always keep a cool head and avoid your impulses. You are a master of those words that you keep but slave of those that you say.
Starting From Scratch… Again
This was me starting from scratch again, just like that day I took a plane to Seattle to stay in a $29-dollar-a-night hotel. However, my situation was different now since I was engaged. I was on my own then, but not now.
I left the company on February 13, just one day before Valentine’s Day, and I was going to get married in 4 months. All preparations were ready for the wedding, but now being “jobless” and really tired of the drama was totally different than 2.5 years ago when I was excited to start a new adventure.
What I learned: When you are down, it is time to pick yourself up, shake your shirt, roll up your sleeves, and move forward. And so I started my new journey.
The Effect of Me Leaving the Company
I mentioned before how I thought I was one of the main driving factors for the company’s growth. Why am I so sure? As soon as I left the company, it slowly started to downsize even though it had some of the best developers I’ve worked with. The company went from 24 employees down to 3 after about 4 years, at which time it was salvaged (acquired is a more friendly term) by another company.
So the reason it was moving forward was simple: I led the company to deliver results. Remember, delivering matters.
And so I started the next phase of my life at 29. It took me a day and a half to find a contract, not a job, and I have moved forward since then. I became a Pluralsight author and an author for Syncfusion Succinctly Series; run my own blog; own a small Support Center; created several cloud applications (success in progress, as I call them); have spoken at several conferences and meetups, including Microsoft’s SharePoint Conference, Atlassian Summit; and have been working as a consultant on multimillion dollar enterprise search projects with Apache Solr and FAST in addition to other areas like JIRA Agile, and Microsoft technologies.
Life has been great, and I am thoroughly enjoying every step of the way. I am working on things that I love, and it keeps getting better. If I think about it, had I not made the mistake of leaving my perfect job that spring of 2006, I would not have experienced all the adventures that I’ve had and would probably be working for the same company from 8 to 5 on a different project.
This mistake taught me how to run a company, and more importantly, it taught me what I want to be in my life.
Let me finish by adding a few more things that I have learned along the way:
- Take opportunities in your life. A single email I sent out of the blue is how I got started as a Pluralsight author. That’s how I met John Sonmez.
- There is no shortcut or easy path—at least that I am aware of. You need to put up the hard work, and it becomes easier as you get more momentum. Yet a lot of people spend their nights watching TV while saying what they want to do. Stop saying and start doing!
- If you start young and with less responsibilities, you can take more calculated risks. Now I have two daughters with whom I love spending time with. But this means that I start working later every night, usually from 9 pm to 11:50 pm. I do it strictly Cinderella style—that is, I am in bed before midnight. And this is on top of my 40 to 45 hour work week.
- Entrepreneurship is a marathon, not a sprint. I have this rule to work strictly until midnight because if I stay up too late, I’ll be next to useless the following day.. You are going for the long run; don’t burn yourself too quickly. But this is my biological clock. Yours might be different. And yes, I love so much what I do that sometimes I want to keep working, but a rule is a rule.
- A failed project may turn into something good. I tried to set up a reseller service for an automotive SaaS (software as a service) product from a US corporation in Latin America. We failed, but this lead to an opportunity to set up a call center for this company, and I have been providing this service for three years now.
- Every decision I make and every action I take is a stepping stone to becoming a better person and a better developer. I am working hard at mastering my craft and gaining control of my life, which brings a question to my mind: are you in control of your life? I recommend you read this post as well.
- There is one constant in life: it goes on. Don’t live in the past, but learn from your mistakes.
- And making mistakes is ok in most cases. There is always something that you learn out of it that can help you in the future. A mistake can be success in progress!
Since the day I failed I have been working hard day and night to create my dream. Yes, everybody dreams, but only those who take action, make a plan, and move forward get ahead.
Be positive. There is a sea of opportunities out there but only for those willing to devote themselves entirely to making them happen.