Opportunities in life are like a train in an impoverished country. You better get on it whenever you see one going in the direction you want. Otherwise, you don’t know when the next one will come!
This post is a confession of my screw up where I passed on a rare chance to retire early….real early. Read this tale and avoid the mistake I made, so you can catch the express train to early retirement. Otherwise, you never know if it will stop by your station again.
Charles Dickens would’ve started this tale with “It was the best of times and it was the worst of times”. And he would’ve been right.
It was early 1998. The heady days of the dotcom boom. The story began in a city called Pittsburgh, far away from the ‘happening’ spots in Silicon Valley or the high finance of New York and Boston. In the interests of protecting the identity of all involved, I will not use names but the story is true.
One of my friends introduced me to an entrepreneur at a party we all went to. Over beer and appetizers, we were talking about jobs, women, Internet and, as every conversation in Pittsburgh eventually turns to, the Steelers. This entrepreneur had recently graduated in computer science, and his high school buddy who also graduated in computer science from another university, had jointly started a company, based on their proprietary software for data analysis they developed during their final year of college. This was long before the words ‘big data‘ were even coined.
This 2-person company wanted a CEO who could help them put together a business plan, pitch it to venture capitalists and build a team, while they focused on building their solution. They didn’t have any money to pay me. Being the naive guy that I was, I agreed to help these guys on a part-time basis since I had a demanding full time job already. A part of me wanted to get this ‘learning experience’ with startups without actually leaving my secure job. I studied their proprietary solution, did market research, analyzed competition (hardly any for their innovative solution), developed a customer value proposition, pricing strategy, and put together a business plan with detailed P&L projections and a crisp pitch presentation for VCs.
I spent several nights and weekends putting all this together while ensuring I didn’t slack in my day job. This side hustle – if I can even call it that – was consuming 25-30 hours a week, in addition to my full time job. We also did road shows with a couple of VCs, but luckily, we didn’t have to do much more. Two VCs we approached loved the plan, and the company raised $450,000 fairly quickly.
Here’s the stupid decision I made. I did not feel confident about leaving my job and joining these guys. My probabilistic attitude for risk had not developed well at that time. I felt like I played my role as I promised and got them positive results. I decided to stay put in my job and part as friends with the entrepreneurs. I compounded the mistake by not accepting any equity but when they sent me a $9,000 ‘friendship’ payment, I was moved by their goodwill gesture. This was accompanied by a nice Thank You note.
Even though there was no written agreement between us, they said they figured I should get 2% of the money I helped them raise. I promptly returned back the money saying every dollar is critical for a startup, and it was as much a learning experience for me and I had fun helping them out so I didn’t feel right about taking the money. Talk about being naive.
After this episode, I went on with my work, and left abroad for a one year stint in an interesting role with my company. The startup also moved on, of course, and found a new CEO, who was given a sizable equity stake in the company.
Fast forward almost 2 years. The company had 40 employees by end of 1999 and had opened up three offices across the country and the founders were debating between Frankfurt or London to open their first ever European office.
Around this time, the company got an offer from a large software company, and were soon snapped up in January 2000 for over $40 million! They weren’t making any profits then but their solution was apparently a ‘must-have’ for this mega-company acquirer. Of course, the bottom fell out of the technology market later that year but the timing for these guys could not have been more perfect. The entrepreneurs made out very well, as expected, and the CEO they hired? He walked away with a cool $3.6 million after just 1.5 years on the job!
Regrettably, I had taken the red pill. Nearly 15 years later, I emerge as a blogger with a strange nom de plume, mentioning the coincidental $3.6 million target figure ($10!). Fate, it seems, is not without a sense of irony. I had to channel Morpheus there to come to terms with my disappointment.
Folks, learn from this sorry tale. Grab a seat on that train whenever you see it, for this train may not come by your station again.
PS: I know this experience doesn’t change the odds of entrepreneurship success. But it still pains me to think how I missed cashing in on the biggest tech boom over the last 50 years. 😢
Raman Venkatesh is the founder of Ten Factorial Rocks. Raman is a ‘Gen X’ corporate executive in his mid 40’s. In addition to having a Ph.D. in engineering, he has worked in almost all continents of the world. Ten Factorial Rocks (TFR) was created to chronicle his journey towards retirement while sharing his views on the absurdities and pitfalls along the way. The name was taken from the mathematical function 10! (ten factorial) which is equal to 10 x 9 x 8 x 7 x 6 x 5 x 4 x 3 x 2 x 1 = 3,628,800.