When the next financial crisis or recession strikes, don’t be caught off guard. Just ask me.
In 2008, I was working in the emerging markets private equity division of AIG Investments, happy to be at a high-flying division of a globally-respected company. You might remember what happened next. AIG blew up spectacularly and overnight I became a casualty of global events beyond my control. The fallout of AIG’s implosion threw me off my game entirely. Never mind my MBA from Harvard Business School, my stellar professional track record, or my network of similarly pedigreed friends, I was now branded with the Scarlet AIG.
That’s when I came to a pretty frightening realisation: I had no idea what I was going to do next. Having advanced through the first decade of my career in a series of step functions, I had never bothered to formulate a Plan B. All I knew for certain was that I would never again bet the entirety of my career on the fate of one company.
But what was my next move? With the finance industry in tatters, I considered pursuing entrepreneurship. After all, the tech industry continued to boom. But I soon came to the conclusion that I wasn’t made for startup life.
Or was I? That’s when I realised that I could have the best of both worlds by integrating entrepreneurship into my career without abandoning a day job. Rather than seeing entrepreneurship as a distinct path from corporate life, it could be an enhancement to my career and an avenue to career diversification. In fact, it could actually be my insurance policy – and it could be yours too, if you become a 10 per cent entrepreneur.
Here’s how it works: your day job gives you the skills, the cash flow, and the connections to generate investment opportunities and then to participate in the most interesting of these projects. These investments can create streams of income that are largely uncorrelated to your day job. That’s important so there’s no conflict of interest.
Depending on the nature of these investments, you can build a series of diversified revenue streams that will provide steady income and have the potential to generate significant upside. While your investment may take the form of cash, you may also find that you can contribute your time, or sweat equity, in lieu of a financial contribution. You can be an angel, an adviser, or part-time business owner. That way you can live your startup dream, while not quitting the day job.
Over the last five years, I’ve invested my time or money in over 20 projects – from tech startups and real estate deals to a play in the West End – as a part-time entrepreneur, or what I call a 10% Entrepreneur. In doing so, I’ve made real money while creating significant upside for the future. To date, I’ve realised nearly two times my investment in cash, and the market value of my remaining holdings exceeds ten times my initial investment. In addition to making profitable investments, I’ve had a lot of fun and I’ve worked with some fantastic people.
I have just one regret: why didn’t I start before? If I’d woken up the day after the implosion of AIG with a portfolio of investments to provide me with safe passage until my life and my career stabilised, the entire experience would have been far less fraught and painful. Rather than mourning what I lost, I would have been able to direct my energies into something positive.
It’s never too late to rethink the contours of your career. By spending a portion of your time and, if possible, capital investing in endeavours on the side as a part-time entrepreneur, you will generate both a Plan B and upside, all while making life richer and more interesting. You may change your career multiple times in a lifetime, changing functions, roles, and companies, but you’ll always be creating value for the most important employer of all: you.
Patrick McGinnis is the author of The 10% Entrepreneur: Live Your Dream Without Quitting Your Day Job (Portfolio Penguin, £14.99, paperback original).