Startup skills from your corporate job


on banking and startups

Following the financial crisis and the subsequent (and frequent) banker-bashing, I was often told that investment bankers had no transferable skills. While I accepted that this felt very true in practice,

off the trading floor, who else cares about the details of the VIX methodology?1.

this troubled my theoretical mind:

how can you be paid more than most other jobs for something that requires no skills?

It turns out, there is a great deal you learn in banking, but because these skills are indirect (not taught or requested) their value is often overlooked and dismissed. I hope these will inspire some bankers who are unhappy in their jobs to try their hand in a startup where much of the same skills can be applied. To some extent this can be applied to anyone in the services industry.

1. Focusing on P&L

In investment banking, there is one thing you learn true and fast. Money talks. The best banker is the one that makes the most money. You are told that the only metric is P&L, and if you are not in a P&L role, you are not really a banker. You just work in a bank. Initially, it is quite liberating having an unarguable single metric for success. As time passes you begin to value other qualitative metrics likes customer satisfaction and headcount turnover in the team. Ultimately though, everything always comes back to the P&L and all other decisions/actions need to be justified as leading to more revenue or not.

While this might appear as a cynical world-view, this is a critical skill when managing a startup, particularly in its early stages when every decision weighs heavily on time and resources. Many startups fail to turn good ideas into viable businesses because of this lack of revenue focus (VC cash also doesn’t help).

2. Risk management

Hand in hand with revenue is the inescapable notion of risk-return. In finance, bankers know there are no free lunches and that every silver lining has a cloud. Running a startup is like managing a fund. You are given some seed capital and you have to deploy it in a way such that more money comes back. That pressure to turn money into more money creates a strong culture of managing risks, planning for the unexpected and remaining rational about outcomes.

This is probably the most critical skill as it gives bankers an intutive control for “appropriate” monthly burn which can mean life and death for a startup.

3. Professionalism

There might be a few exceptions, but generally speaking, professionalism is key to a startup’s success. Professionalism is what gets people to give you money and trust you/your product. Acquiring the trust of a customer to part with their money is a banker’s bread and butter. Business relationships and legal contracts are very different to friendships and “I promise dude.” Being able to look the part, say the right things, write coherently and negoatiate legal agreements goes a long way towards getting customers to trust you enough to pay you.

A great deal of startups suffer from being too casual or unprofessional with their customers, particularly in the B2B space or when dealing with professional investors.

4. Selling the dream

Financial products don’t exist in reality. They are merely conceptual ideas formalized into a contract. The banker’s job is to make presentations, express the idea and persuade the other party to join them on this journey to bigger and better things.

Whether it is trying to find product-market fit or getting investors on board, startups spend their early days mostly selling dreams. Not only do bankers have that experience nailed down, they also come built-in with the ongoing (post-trade) dream management of the customer/investor as reality unfolds.

5. Hard work

This is quite straightforward. If you take people regularly working 14-16 hours a day in the trenches and put them in a startup, they will feel immense gratitude working only 12 hours a day and not wearing a tie. Working on weekends is common and working late into the night to meet a deadline is also typical. Bankers also have the discipline to do very repetetive and manual tasks (like data entry or creating mailing lists). Despite a startups best intentions shit is bound to happen and someone has to be there putting the hours in when the going gets tough.