“Entrepreneurialism isn’t part of my professional hardwiring,” says Sallie Krawcheck. “At least not until recently.”
Have you ever had one of those head-slapping, a-ha moments? An insight that, looking back, seems to divide things into “before” and “after”?
I’ve had a handful. This particular one hit me not long ago, as I was applying mascara: The retirement savings crisis is a women’s crisis—and not just because of the infamous wage gap, but also because of the much-less-discussed gender investing gap.
After a while, the idea of taking the plunge began to seem less abstract and more achievable.
“AFTER A WHILE, THE IDEA OF TAKING THE PLUNGE BEGAN TO SEEM LESS ABSTRACT AND MORE ACHIEVABLE.”
That was the founding idea for Ellevest, a soon-to-be-launched digital investment platform focused on women, which I’ve founded and funded—and the idea was the easy part. Much harder has been turning that idea into a business. As I wrote recently, entrepreneurialism isn’t part of my professional hardwiring, at least not until recently. Starting something from scratch—hiring the first person, buying the first computer, setting up the legal structure, finding office space? Not my expertise, and not my interest. And that’s not to mention the whole fear-of-failure thing. At first, I thought: Who needs it?
As it turns out—given the size of the issue, my background, and how much I love a new challenge—the answer is: me. I needed to do this.
Still, I wanted to reduce the risk as best I could, particularly since it required making such a significant career switch. So how did I get the confidence to make it, and “de-risk” the venture, as much as possible? I did a number of things.
My first step was to spend time with entrepreneurs so I could “try on” the idea. I was fortunate enough to have had a number of business leaders in my professional network to consult—people I’d connected with over time, and a few that I’ve mentored. So I turned the tables and talked with them about what they were doing, plus every conceivable aspect of business building and funding: How they spend their time, what obstacles they’ve had to overcome, the surprises of their journeys, how they manage the day-to-day pressure.
These conversations proved crucial. After a while, the idea of taking the plunge began to seem less abstract and more achievable. I decided I could see myself really doing it.
But I had to be pretty honest with myself: How would I feel about losing the rhythm of working in big companies—the executive assistant, the established ritual of business meetings and reviews, the paycheck? What about the softer perks, like people at cocktail parties instantly recognizing the name of company I worked for? (Or the softest perk of all: the warm cookies my office served at 3 p.m.? Okay, I could give those up.)
Some of these corporate-culture features might seem small, but if you’ve spent a long career working in big organizations, you may not miss them until they’re gone. If you’re considering striking out on your own, you have to face up to every change that awaits you, right from the get-go. You have to decide what’s really important.
My next, hugely important step was to find a cofounder with a very different background and business disposition from mine. I found that in Charlie Kroll, who’s been an entrepreneur since his college days. If I’m more the “fin,” he’s more the “tech.” We’re both deep into different parts of the product, and that natural balance makes it easier to divvy up key duties. Charlie has put our processes in place and holds everyone to them. He negotiates the contracts, and he’s pretty unblinking on keeping the team to our commitments and on deadline.
Entrepreneurship is about finding new approaches to problems, and discomfort can be an important part of that process.
“ENTREPRENEURSHIP IS ABOUT FINDING NEW APPROACHES TO PROBLEMS, AND DISCOMFORT CAN BE AN IMPORTANT PART OF THAT PROCESS.”
Soon after partnering, we set about building a team that is the most diverse of any I’ve ever worked with—diversity of background, thought, age, gender, industry experience, disposition.
And diversity isn’t something we thought hard about solely because Ellevest is a women-focused business. You may find it more relaxing to work with people just like you, but entrepreneurship is about finding new approaches to problems, and discomfort can be an important part of that process.
To further de-risk the initiative, we’ve engaged with our potential clients on the topic of investing almost constantly. We’ve talked and talked and talked with women in order to truly understand their perspective.
And we tested and tested and tested our potential solutions from the very beginning—before writing any code. I’ve learned as a result that some of my strongly held hypotheses seem to be on track; some of my equally strongly held hypotheses have proved dead wrong. But there’s no way to know if you don’t get out there and start talking to people.
(A side note: This testing process is completely new for me. I like to joke that when we built new platforms at big companies, we 1) did initial research; 2) spent $500 million building the technology; 3) rolled it out; 4) spent six months apologizing; then, 5) spent another $200 million fixing it.)
Many entrepreneurs don’t recognize the risk of bringing in the wrong investors—until it’s too late. We made it a top priority to search for the right ones. It was important to me that our lead investor (Morningstar) has a history of building businesses with an eye to the long term. And it was also important to me that all of our investors care about the broader issue and the problem we’re trying to solve with Ellevest.
Still, we may well fail.
Whenever you start a new business, the sheer number of variables at hand makes failure a constant possibility. But I’ve found that taking these steps has helped contain that risk as best as we can.
The reason I was able to overcome my hesitance to become an entrepreneur was because I kept coming back to the problem and poking at it.
“THE REASON I WAS ABLE TO OVERCOME MY HESITANCE TO BECOME AN ENTREPRENEUR WAS BECAUSE I KEPT COMING BACK TO THE PROBLEM AND POKING AT IT.”
Ultimately, the reason I was able to overcome my hesitance to become an entrepreneur was because I kept coming back to the problem and poking at it—talking about it at dinner parties (seriously, you don’t want to sit next to me at a dinner party), jotting notes about it, and asking other women about it.
I’m no longer a reluctant entrepreneur because I’m now more certain than ever that I had to take a run at solving such an important issue. It can take a while to establish that certainty, but it’s the foundation for everything that follows. If not me and my team, I finally decided, then whom?