The Big Reveal


Big news! After a lot of hard work, sweat, and tears, Ryan and I are ready to show off Retrium to the world.

Here’s The Plan

I’m a presenter at the upcoming Big Apple Scrum Day conference (on June 1st) and my talk is titled “Distributed Scrum — Why It’s So Difficult and What We Can Do About It”. The Big Reveal is going to happen during the last 10 minutes of my talk when I invite the audience to participate in a live Retrium-powered retrospective.

The subject of the retrospective? My talk.

Yes, I’ll be opening myself up to real-time criticism, and yet I can’t wait.

Minimum Days Off and Establishing a Culture of Trust


Traditional Leave Policies Can Be Disrespectful

Sometime late last year, before I had decided to quit my job and co-found Retrium, I started thinking about my then-employer’s leave policy. It was a pretty standard leave policy for the corporate world: we accrued roughly 2 “personal days” every month which we could use as we wish. The more I thought about it, the more I found this policy, along with all “maximum days off” leave policies, to be moderately disrespectful to the employee. That’s because an employment contract to me is, or rather should be, an agreement that relies on mutual trust — on the employer’s side, trust in the employee to get the job done; on the employee’s side, trust in the employer to be able to pay.

By limiting the number of days off an employee can take, the employer is implicitly telling the employee: “I don’t trust you to take off a reasonable number of days each year, therefore I’ll arbitrarily set a contractual limit.” It’s as if you, in the eyes of your employer, were a young child eating too many candy bars. “But Mommy, can’t I have just one more!?!?”

But are Unlimited Vacation Days the Answer?

I’m not alone in feeling this way. Over the past decade, there’s been a trend emanating from Silicon Valley towards a policy of granting unlimited leave to employees. Take as much as you want! We trust you! Upon first glance, this seems to be an optimal solution: the employer is demonstrating its trust in the employee to do the right thing. It makes the employment contract a contract based on trust and respect, at it should be.

But there’s a catch. Without a guaranteed number of vacation days each year, employees no longer have control over their ability to take leave in the first place. Employees who work under traditional leave policies accrue days off; in other words, taking a day off is an employee’s right. With unlimited leave, a bad boss can actively prevent an employee from taking a day off because days off are not the employee’s, per say.

As a result, unlimited leave gives the employer even more control than it had with a traditional maximum days off policy. “You already took a few days off last month, Jon. Don’t you think that’s enough?” Or, even worse, “Sorry, Bethany, if you take more vacation this year you might not get that promotion we were talking about.” Think that’s unrealistic? Possibly, but the “fairness” of unlimited leave policies is entirely dependent on good corporate culture. And it also relies, scarily, on the whims of your particular boss.

Is There a Better Solution?

So, are we eternally caught between the traditional annual leave world, in which employers demonstrate a lack of trust in their employees, and the new, hip unlimited vacation day world, in which employees place an incredible amount of trust in their employer to treat them decently? I don’t think so.

Here’s my suggestion: why not give employees a minimum number of days off each year that employees have the right to use, while at the same time establishing no maximum? (Note: after doing some research, I also realized that I’m not the first to think of this. Credit where credit is due.)

What excites me most about a minimum leave policy is that it combines the best features of traditional and unlimited leave policies into one. By establishing a minimum number of vacation days that an employee must take each year, it solves the problem with unlimited leave policies: employees now have the right to take vacation every year and don’t need to trust that their employer will allow them to take time off. At the same time, by not establishing a maximum number of days an employee is allowed to take, it fixes the problem with traditional leave policies by placing trust at the core of the relationship between the employer and employee.

In essence, the employer that offers a minimum day off policy is saying to its employees:

I trust you to take an appropriate number of vacation days each year and therefore I am not setting a maximum. How many days you take is up to you. Just get the job done. At the same time, I want you to know that you have the right to take time off and therefore I am establishing a minimum number of days which are yours to take as you wish.

Because I eat my own dog food, a minimum day off policy is one of Retrium’s core values from day one. What do you think?

LLC vs Corporation: A Lean Perspective


One of the first decisions I had to make as co-founder of Retrium was how to legally form my business (I chose an LLC). You can find many articles online comparing and contrasting LLCs with Corporations, and as a founder, it’s well worth your time to understand the implications of each option. In a nutshell, an LLC has two key features that make it very attractive. First, as a pass-through tax entity, it avoids double taxation. Second, it provides personal liability protection for the owners of the business. (Note: the advantages and disadvantages of LLCs vs. other business types is a very complex subject — so please do your own research.)

Despite these advantages, it’s rare to find startups that have formed as an LLC. In fact, if you search on Google for “Startup LLC or Corporation“, the vast majority of the articles you will find argue that tech startups should be structured as a corporation. In most cases, I disagree. And it’s because I’m a lean startup aficionado.

Why Most Startups Should Form as an LLC

Like most startups, I’m going to assume that yours has limited cash and therefore a short runway. The number one risk factor for a startup in this situation is your ability (or, rather, inability) to find your first customer. If you can’t find that elusive first customer, you’re done. Out of Business. Kaput.

As a result, you should have a laser focus on finding someone to pay you for whatever it is that you are building. That means saying ‘no’ to any expenses that don’t directly support this goal. Which also means saying ‘no’ to forming as a corporation. Corporations are like bad boyfriends or girlfriends. They are expensive. Expensive at the beginning (formation costs are high) and expensive to keep (annual filings are complex and costly). LLCs are the opposite. Formation costs are minimal and they have very few ongoing legal requirements.

Delay Expensive Decisions Until You Have More Information

By choosing to form as a corporation early on, you’re basically saying: “The best use of these few thousand dollars is to form a complex legal entity.” Not to build your product, not to advertise, not to do market research. To form a legal entity. Are you sure that’s the case?

Here’s an alternative. Form as a low cost LLC. You can always switch to a corporation if you need to (for example, if you are closing in on a funding round and the investor requires it). Yes, there are associated switching costs, but I recommend it anyway. Here’s why it’s a good, lean strategy:

  1. It keeps your costs low while your runway is short
  2. It tells investors you know how to spend money wisely
  3. And most importantly, it extends your runway by delaying your decision to spend significant money on business formation until it is required

The Key Takeaway: Be Lean

The key takeaway here is to apply lean startup to as many decisions you are making as a founder as possible. Lean says we should follow the “build-measure-learn” feedback loop. In other words, we should build a small bit of product, test it in the marketplace, learn what works and what doesn’t, then start all over again. Applied to the choice of LLC vs Corporation, here’s what build-measure-learn looks like:

  • Build – form as a low cost, inexpensive LLC (that’s your small bit of “product”)
  • Measure – see if it’s working for you (can you find funding as an LLC? is it preventing you from giving equity to employees?)
  • Learn – if the LLC is preventing you from achieving something critical to your business, switch to a corporation; if not, don’t

Then, rinse and repeat.

In fact, the principle of build-measure-learn can be applied to almost every decision you have to make as a startup founder. Keep that in mind as you continue on your entrepreneurial journey.


March 2015: Reflections on Being an Entrepreneur


No office. Work when you want, from wherever you want. #Nomad for life. Sounds groovy, doesn’t it? Why, yes, I happen to agree. I’m a few weeks into my entrepreneurial adventure as co-founder of Retrium, and like clockwork, the winter grays are in the rear view mirror. It’s 75 degrees out and sunny. The coffee is strong, the music is playing, and spring is here.

As I continue to adjust to the daily #startupgrind, from time to time I plan to share some insights into what bootstrapped start-up life is really like. For those of us who live outside The Valley, and especially for those of us who live in a “suit city” like Washington, D.C., being an entrepreneur comes with certain stigmas and assumptions. What is it like working without an office? How do you know what to do all day? Can you actually make money being an entrepreneur? That, and more, coming your way. These are my random thoughts and reflections, so read at your own risk Smiley

Lessons from March 2015 (Month 1)
The open-ended nature of building a business is simultaneously empowering and exciting as well as confusing and overwhelming.

There is so much to do when building a business from scratch. We have to build a website, build a product, build a customer base, build a marketing plan, build a business model, build, build, build, and build some more. Since there’s only two of us (myself and my technical co-founder, Ryan), there’s a constant nagging sense that we aren’t accomplishing enough on a daily basis because there’s just so much to do. At the same time, the fact that on any given day I can work on anything I want is incredibly empowering and exciting. It’s a strange dichotomy that, I suspect, will persist for a very long time.


Working in the same physical location as your co-founder is both challenging and invigorating at the same time.

As a cash-strapped startup, we have no office space. Some days, Ryan and I choose to work separately from our homes. Other days we decide to meet and work together out of a coffee shop. As a social guy, I thought that I’d prefer working with Ryan from the same physical location. Sometimes I do. But working together also presents challenges of its own. It can be distracting. It can be far too easy to disrupt each other. At the same time, being together enables you to easily share the joy you get from tweets like this:

It feels great.

I finally feel that I have control over my own life. I no longer have a one hour commute every day to and from the office. I no longer have to request days off to take care of a sick child or to celebrate a holiday. I no longer feel like a bad employee when I have to go to a doctor’s appointment in the middle of the day. At the same time, I wake up excited to start working. The day goes by in a flash because more often than not, I’m in the flow. Assuming the whole “I need to make money” thing solves itself at some point, this lifestyle is far superior to the 9-5 office job.


Friends and family are genuinely interested in what you’re doing at work.

“How’s work going?” used to be a relatively empty question. Sure, I could give an answer, but with the exception of my spouse, my parents, and perhaps a few others, no one else really cared that much. That’s no longer the case. Friends, family, former colleagues, and even random people I meet genuinely want to know how Retrium is doing. It’s kinda cool.


That’s it for this month. Now, back to work Smiley

Values on Day One

The idea behind Retrium, that distributed scrum teams should be able to run effective sprint retrospectives, was born many months ago on a park bench in Washington, DC. Early on, my co-founder and I agreed on the need to establish a set of core company values that underpin who we are as a company, as well as how we interact with each other and our customers.

We are excited to share our first list of values with you. While we are confident in the values we have identified as core to our company’s ethos, we are also sure that our culture will change as we grow and mature as a company. Without further delay…

Retrium Values

Respect and Trust

  1. Everyone gets a minimum number of days off each year (this one requires further explanation and I will follow up with a blog post soon)
  2. Work from anywhere, at anytime
  3. Respect the flow of others; use non-intrusive communication whenever possible

Measuring Success

  1. Quality of your work over number of hours you put in
  2. Failure is an opportunity to learn

Company Structure

  1. Holarchy over hierarchy (title doesn’t matter; good ideas do)
  2. Everyone, from the CEO down, is responsible for customer support

How We Act

  1. Be the first to identify and flag problems; be the last to brag about successes
  2. Be part of the community, by volunteering in the physical world and open-sourcing what we can in the virtual world
  3. Be curious about our market, our product, our business, our customers, and ourselves. Continuously improve in all these areas

Remote teams, retrospectives, and the death of post-mortems (Video interview)

Last week I was fortunate enough to be interviewed by Lisette Sutherland, virtual team guru and author of the upcoming book Collaboration Superpowers. The interview started with a discussion about what works — and what doesn’t — for remote teams, and then delved into using retrospectives to catalyze continuous team-based improvement. Hope you enjoy, and if so you might want to check out the other interviews on Lisette’s podcast.

The 5 Hidden Costs of Getting Funding


Coins Money

Funding, funding, funding. It’s all many founders, and most of the popular media, seem to care about. Yet, getting funding is not a guarantee of success. Far from it. In fact, there are a number of hidden costs associated with getting funding that founders ignore at their own peril.

1. Trying to get funded is a full-time job (or, the opportunity cost of courting)

When you start a business, you know it’ll be a full-time job (and almost certainly more). And that doesn’t even include trying to get funding. Unless you already have product/market fit with an established customer base that provides growing monthly recurring revenue (and, if you do, chances are VCs are approaching you), getting funding is hard and time consuming. You may have a great idea, but so do most other founders who approach VCs. Given the shear quantity of companies courting VCs, it’s not hard to see why you will get rejected, time and again, by most of the VCs you approach. This is a major time suck and an emotional drain.

Even worse, there is a significant opportunity cost associated with trying to get funding. Think of all the other things you could (and in most cases, should) be focusing on: building the right product, talking with potential customers, hiring the right people, setting up marketing campaigns, establishing the right culture, and much, much, more. So while getting a few million dollars in VC funding might help your company grow, the question you should be asking yourself is actually much more complicated: “Does the high cost of looking for funding outweigh the potential benefits of actually getting funded?” In many cases, the answer is ‘yes’.

2. Funding can actually reduce your runway

This is a seemingly counter intuitive point. Runway is defined as “the amount of time until your start-up goes out of business, assuming your current income and expenses stay constant.” So it would seem that getting funded would increase your runway. Not necessarily.

To understand why, we have to delve into a bit of elementary math. A simplified way to calculate runway is:


Supposing your company had $100k in the bank, your monthly expenses were $20k, and your monthly revenue was $10k, your runway would be:

png (1)

In plain English, that means that all else being equal, your start-up has 10 months left before it runs out of money. Now, let’s imagine you received VC funding worth $1 million. Here’s your new runway:

png (2)

Great news, the $1 million in VC funding gave you an extra 100 months of runway! Not so fast. To arrive at an extra 100 months of runway, we’ve made one critical assumption: that after receing funding, your expenses will stay the same. For most start-ups this is not the case. Think about it. You didn’t raise a bunch of cash to let it sit in the bank. No, you raised the cash in order to hire more people, lease additional office space, put new marketing plans into action, provide additional perks to employees, and more. Thanks to getting funding, it’s easy to imagine your expenses increasing from $20k per month to perhaps $150k per month. Let’s look at your new runway:

png (3)

The extra $1 million in funding has actually decreased your runway by over two months! Yes, I’ve assumed that your monthly revenue doesn’t increase as a result of the injection of cash, but the point remains the same. VC funding can, and in many cases does, decrease your runway.

3. Loss of control

This one is perhaps more obvious. Founders quit their jobs to start their company for many reasons, but one of the most common is that they want to regain control over their lives by becoming their own boss. For bootstrapped companies, this dream can easily become a reality. Not so for venture-backed start-ups. Most VCs will want a seat on the Board of Directors, many will involve themselves in the company’s strategic decisions, and some may even make their funding contingent on replacing you as CEO. Depending on your goals as a founder, this may or may not be acceptable, but getting a VC involved with your start-up certainly involves giving up a lot of control over the business you worked so hard to found.

4. Loss of potential upside

The potential for a large financial payoff may not be your primary motivation for starting a company (in fact, it shouldn’t be). Nevertheless, have you ever met a founder who didn’t dream of financial success? Me either. With this in mind, think twice before accepting VC funding. To explain why, let me paint a picture of two successful companies:

Company A

This company is bootstrapped and the sole founder controls 100% of the shares. It recently sold for $10 million (yay!), and the founder keeps all $10 million.

Company B

This company took multiple rounds of VC-funding, and as a result of dilution, the sole founder controls only 10% of the equity. In order for the founder to make the same $10 million as the founder of Company A, his company will have to sell for at least $100 million (10% of $100 million).

Building a $10 million company is hard enough. Build a $100 million company is a completely different story. For most founders, the trade-off is simply not worth it.

5. The goals of those who fund are often not the goals of those who found

VCs and founders don’t always see eye-to-eye, to say the least. The VC business model relies on positioning companies for a quick and highly lucrative exit (irrespective of whether that exit is via acquisition or IPO). Without an exit, VCs will never make enough money to justify their initial investment. In fact, the type of company that VCs hate the most is the “living dead” (companies that are not hitting it out of the park, but aren’t running out of cash either. These zombie companies simply live forever, making reasonable, but not incredible, amounts of money. VCs hate them because they are a time-suck. They are still part of the VC’s portfolio, yet their potential upside is limited).

Living dead” companies may be a VC’s worst nightmare, but for many of their founders, they aren’t so bad. They might not lead to a $100 million IPO, but they can still easily lead to becoming part of the 1%. In short, founders of most “living dead” companies are able to live a very comfortable lifestyle.

But since VCs want a big exit, they will push you to make decisions that lead to a big exit. While on the surface this sounds great, there are consequences. As a founder, you may wish to grow slowly as you find product/market fit. VCs probably won’t like this. As a founder, you may have an offer to be acquired, but might not be ready to give up control and want to decline. VCs may not like that, either. In short, the goal of every VC is to make a lot of money, as quickly as possible. That’s not the goal of every founder, every time.

In Summary

All this goes without saying that for some start-ups, getting funding can be the right choice. The word “strategic” is overused in the business world, but in this case it applies. Start-ups should look for funding for strategic purposes only (for example, when the success of the business depends on being able to expand quickly, or when the business is capital intensive). In all other cases, founders should think twice before approaching VCs. The hidden costs in getting funding can be quite high.

How Lean Startup Gave Me The Confidence To Quit My Job and Launch My Startup

I’ve been a “wannabe-preneur” my entire life. I always told my friends and family that “one day I’ll start my own business” but deep down, I didn’t truly believe what I was saying. I had a comfortable corporate job, a good salary, and a relatively easy life. Like most other wannabe-preneurs, I had plenty of business ideas that I became excited about from time to time. But I never became fully committed to any of them, and certainly never quit my job to work on them full-time.

In short, I suffered from three diseases that prevented me from becoming a fully committed entrepreneur:

  1. Analysis paralysis (Is there a market for my product? How big is it? How much can I charge for it?)
  2. Fear of failure (What if I fail? How will I support myself and my family?)
  3. Golden handcuffs (Do I really want to give up my comfy corporate lifestyle?)

That is, I suffered from these diseases until I found the cure. When I first found it, I didn’t realize it was a cure. Instead, it simply seemed like a useful framework for validating business ideas. While that is indeed true, it also cured me of my three diseases and gave me the confidence to become a full time entrepreneur. More importantly, it can cure the diseases that prevent you from starting your business, too.

The framework I refer to is called Lean Startup. And this is how I used it to overcome my fears and start the company of my dreams, Retrium.

But First, Some Background (You can skip this if you know about Lean Startup already)

Lean Startup is a methodology first proposed by Eric Ries in 2011 that emphasizes short development cycles, frequent customer feedback, and “validated learning.” A complete description of the Lean Startup methodology is well beyond the scope of this article, but if you’re considering starting your own business, I strongly encourage you to read about it (start with The Lean Startup, by Eric Ries himself, followed by Running Lean, by Ash Maurya).

For the purposes of this post, here’s what you need to know. Lean Startup encourages you to “get out of the building” by talking to, and learning from, potential customers early and often. So early, in fact, that you don’t even need a product to start talking. All you need is an idea and the courage to talk to others about it.

How Wannabe-preneurs are Different From Entrepreneurs

Both wannabe-preneurs and entrepreneurs typically start with the same drive: a love of building things. What separates wannabe-preneurs from entrepreneurs is that wannabe-preneurs tend to be focused on product alone, while entrepreneurs understand that building a product is only a part of building a business. Building a business also requires marketing, sales, customer development, business models, pricing strategies, HR, and more. Wannabe-preneurs start and end with product. When it doesn’t catch on, they give up.

The trouble with building a product without simultaneously talking to potential customers is that you’re just guessing. You’re guessing that others will find your product useful. You’re guessing that people would pay for it. Most wannabe-preneurs never gain the confidence they need to quit their job and start a business because they are just guessing.

Enter Lean Startup

Lean Startup fixes this problem for you. It encourages you to “get out of the building” by talking to potential customers in order to learn from them. It forces you to validate your business hypotheses early and often. It forces you to iterate on small bits of product by testing them in the marketplace. And best of all, you can do all of that before you build a product and before you quit your job. With Lean Startup, you no longer need to guess that your business idea has a real chance at success. You’ll know it has a real chance at success because potential customers will have already told you that they would pay for your product. And all this, before you even quit your day job.

Here’s My Story

For me, it all started with a simple hypothesis: that it’s difficult for distributed scrum teams to run effective sprint retrospectives (if that sounds like a bunch of mumbo-jumbo, don’t worry, you’re probably not in my target market!). Here’s how I used Lean Startup to test this hypothesis and cure myself of my three diseases.

First, I started talking to people I knew who were in the broader software development space. I did this on weekday evenings, after dinner and after I put my kids to bed. I quickly learned that most people I talked to did not suffer from the pain points I was trying to solve. Good thing I hadn’t quit my job yet! Instead, I simply narrowed my early adopter target market to Scrum Masters of distributed teams. Since I didn’t know too many of these people, I turned to Twitter, found a group who were in this target market, connected with them, and asked to chat. Most were happy to oblige (thank you!) primarily, in turns out, because they did suffer from the pain points I was trying to solve. Great news! I had found my initial target market.

Within two weeks, I had talked to over 25 potential customers. Over 95% had the paint point I was trying to solve. Most were actively looking for a solution, but couldn’t find one. Best of all, the majority of people I talked to were willing to pay for the solution I was proposing.

Notice that I still haven’t talked about actually building a product. That’s because I didn’t have one, nor did I need one yet, as long as I kept working on validating my problem hypothesis. And the more people I talked to, the more I became convinced that I had an idea that could really work. And not just as a cool product, but as a business. In effect, my potential customers had convinced me that the primary risk of going full-time on my startup was no longer whether people would pay for my product, but whether I could build such a product in the first place.

Did you hear that? Product! The thing that wannabe-preneurs are good at. The thing I know I’m good at and my co-founder is good at. I now had the guts to quit my job and start Retrium, the company of my dreams.

Lean Startup As The Cure

Let me end by going back to the beginning. I had three diseases as a wannabe-preneur: analysis paralysis, fear of failure, and golden handcuffs. Lean Startup cured them all. It allowed me to gain confidence that there was a market for my idea (overcoming analysis paralysis), it helped me validate my problem statement (overcoming fear of failure), and it let me believe that my startup could realistically lead to financial success (overcoming golden handcuffs).

Lean Startup can do that for you, too. All you have to do is start talking.

Why Retrium?

This past week, I told my boss at work I’d be quitting my job to be the co-founder of a startup, Retrium. Over the years, I’ve had plenty of ideas — some more successful than others — but I never quit my job to work on them. One might reasonably ask: why go “all in” on this one? In other words, what makes Retrium different from my past entrepreneurial endeavors?

Good question! Here are three reasons why I believe Retrium has a really great shot at becoming a very successful company:

1. Broader Market Forces

Retrium is a toolbox of facilitated retrospective techniques built specifically for distributed scrum teams. If you’re not in my target market, that might sound like a jumble of jargon, but it sits at the intersection of two powerful market forces:

  1. The increasing popularity of remote work and distributed teams
  2. The incredible adoption rate of agile and scrum within the software development community

Let’s start with the first one: the increasing popularity of remote work and distributed teams. According to ESNA, 20% of the global workforce telecommutes. More anecdotally, we’ve recently witnessed the incredible popularity of websites like Nomad List, which provides information about the “best cities to live and work remotely”. We also have lengthy crowdsourced lists of startups with a distributed workforce. In short, companies have begun to realize the importance of hiring the best talent, regardless of location. This trend is only going to continue as technology gets better and better at reducing the friction of a distributed workforce.

The second market force is the incredible adoption rate of agile and scrum within the software development community. The jury has decided, and agile has won. What began as a simple manifesto has turned into powerful force that is helping teams produce better software, faster. This is true, of course, for the startups of Silicon Valley, but it’s just as true for the multinational enterprises of New York and the nonprofits of Washington, D.C. After all, who wouldn’t want to be more agile?

Clearly, there are plenty of pain points left to solve in both of these relatively nascent markets. Retrium solves one of them.

2. External Hooks That Naturally Reduce Churn

The biggest challenge to the sustainability and profitability of any SaaS company is customer churn. The simplest definition of churn is “the rate at which customers cancel their subscription.” Why is churn so important? For each customer that cancels their subscription, a company has to find another just to maintain current revenue. If a startup wants to grow, then its customer acquisition rate has to be greater than its churn rate. Clearly, the higher the churn rate, the harder this is to accomplish.

One of the best ways to reduce churn is to have a high level of user engagement. After all, users who are engaged with your product are less likely to cancel. One of the things that excites me most about Retrium is the fact that it has a high likelihood of having extremely low customer churn.

Retrium benefits from something I call an “external user engagement hook,” which is something that encourages customers to use your product from outside the product itselfRetrium’s external user engagement hook is the scrum framework, which requires teams to run retrospectives on a regular — and frequent — basis. The hope is that every time a team needs to run a retrospective, it will be reminded to use Retrium. Having an external user engagement hook can be an incredibly powerful driver of low churn, and it makes me confident in Retrium not only as a product, but as a business as well.

3. I’m Passionate About It

One of the worst mistakes a founder can make is to start a company in a market that he or she is not passionate about. Popular culture would have you believe that founding a startup will lead to a glamorous life full of parties and ritz. The reality is quite the opposite — startup life means hard work — really hard work. As a result, founders of startups can burnout quickly, especially those who start companies in markets they aren’t personally passionate about.

As for Retrium, I’m fortunate that it’s at the intersection of two areas I’m truly interested in: agile software development and distributed teams. In fact, Retrium itself is being built with these concepts at its core. Not only are we using the scrum framework to develop Retrium’s code, but we’re also a fully distributed workforce (we have no office).

Looking Forward

None of this means that Retrium will, in fact, be successful. Most startups fail, and it’s far too easy to live in a positive echo chamber that can lead to overconfidence in your idea. Nonetheless, I truly believe the future for Retrium is bright. I’m excited to get going.

Coming soon: a post describing how I got the confidence to quit my job and start Retrium. I’ll give you a hint: Lean Startup.

Getting an MBA vs. Starting Your Own Business

kaboompics.com_Girl reading a notebook

Let’s start with the profiles of two high-success individuals who are about to embark on two different life adventures.

Individual #1 (We’ll call her Lucy)

After graduating five years ago with a bachelor’s degree in Computer Engineering from MIT, Lucy took a job as a software developer at a large corporation. Her starting salary was a healthy $90,000. In no time, Lucy was identified as a high potential employee. She was quickly promoted to project manager, then to senior project manager, and was correspondingly given multiple raises resulting in her current salary of $125,000. As she moved up the corporate ladder, Lucy started to realize that she lacked some of the foundational business knowledge that her older, more experienced colleagues seemed to have. So she decided that it would be a good idea to quit her job and enroll in a fulltime MBA program. As a star performer with great references and a solid academic background, Lucy was confident that she would get accepted to a top-ranked business school. She knew the costs are high: $170,000 in tuition payments plus an opportunity cost of $250,000 in lost salary, for a grand total of $420,000 in lost income over two years. Yet, with the support of her family, she decided to go for it. After applying, interviewing, and nervously waiting for a decision, Lucy finally got the good news: she was accepted to Harvard! When she told her parents, friends, and colleagues of her decision to leave her corporate job and get a Harvard MBA, they were immediately supportive (“you’re lucky to be able to attend such a good school!”) and wished her the best of luck.

Individual #2 (We’ll call him Tom)

Tom is a technical wizard and a natural leader. He’s the rare combination of a geek who is also an outgoing, personable guy. He’s five years out of Stanford University, where he graduated with honors with a Computer Science degree. Upon graduation, he was recruited by all the hot Silicon Valley companies – Google, Facebook, Apple. Now, he’s a rising star and a lead engineer and has been told by the suits that he has the potential to become a “big deal” at the company. His starting salary was $90,000, but he’s now making $125,000. He’s generally happy with his job, but he also feels that by working at a big company, he’s missing out on his lifelong dream: to start his own business. One day during his daily 6:00am morning shower, Tom has a flash of genius: an idea that could change the world! Tom hurries into the office, excited to tell his closest friend at work about his idea (and secretly hoping that his friend would be interested in becoming a cofounder). It works! Tom and his friend start working on the idea at night and on weekends. One day, after receiving yet another urgent email from his boss (they always seem to be urgent), Tom decides that it’s time. He walks into his manager’s office and tells her that he’s quitting his job. That same evening, he calls his parents to tell them the news. The reaction is predictable: “You’re doing what? Tom, you could lose everything! What if it fails? Are you sure this is a good idea?

What People Think About Lucy and Tom

The difference in reactions to Lucy’s and Tom’s decisions is not mere hyperbole; it’s how most people in our society think. At first glance, there’s a good reason for that: Lucy is smartly investing in her future by getting a Harvard MBA while Tom is risking everything, since the vast majority of startups fail.

What’s So Different About Lucy’s and Tom’s Paths, Really?

Let’s look at what Lucy will most likely get from her Harvard MBA:

  1. A really great business education
  2. An amazing lifelong network
  3. A guarantee of lost income in the short run
  4. Hopefully a lot of extra income in the long run

And here’s what Tom will most likely get from founding his startup:

  1. A really great business education
  2. An amazing lifelong network
  3. A guarantee of lost income in the short run
  4. Hopefully a lot of extra income in the long run

That’s the thing. The expected outcomes of getting an MBA and starting a business are nearly identical in almost every way. Both are opportunities to learn. Both are opportunities to meet people. Both are guaranteed to lose you large sums of money in the short run, while having tremendous potential to make you a ton of money in the long run.

What Needs To Change

Despite the similarities in outcomes between the two, most people consider quitting your job to found a company to be an extremely risky activity, while quitting your job to go back to school to be a worthwhile investment. This needs to change. Yes, of course starting a business is risky. But starting a business, like getting an MBA, is also a worthwhile investment in your future. And that’s true even if your company fails. The business skills you will gain and the people you will meet will, in the long run, open doors for you.

So the next time someone you know quits his or her job to start a company, treat it the same way you’d treat someone who is going back to school. Both are deserving of praise.