Terminal Value

Making a Successful Entrepreneurial Transition from you 9-5 Job

Janine Bacani

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We have Hadi Radwan with us today, and one of the things that we’re going to be talking about is making a successful entrepreneurial transition from your 9 – 5  job to running your own business. Now, this is a topic that’s actually very near and dear to my heart because my entrepreneurial transition was something that I always wanted to do, had always been in the back of my mind, but was not planned. And the reason for that is because I was fired without notice and without cause on April 20 of the year 2020, which, for those of you who are paying attention to the date timelines, is basically dead at the beginning of COVID at the exact same time that 40 million other people were unemployed. So that was decidedly not awesome. But that has actually kind of morphed into one of the things that I’m personally really passionate about, which is giving people the tools and systems that they need to make that transition for themselves if and when they decide it’s what they want to do. Because one of the things I firmly believe is that if you’re in a management executive type of career path, it is literally only a matter of time before that transition becomes necessary, unless you have managed to accumulate enough capital to where you can essentially retire on your own earnings. But the studies have shown that that is a very fast track to having your mind atrophy. So just understand that if you want your mind to stay sharp, you are going to have to keep it engaged, which in a lot of cases involves people running their own business. But I’m running on and talking too much. Hadi, please introduce yourself. 

Thank you for having me on the show. It’s a pleasure to be here, and thank you for the great introduction. So, my name is Hadi Radwan. I currently run an InsureTech called  Asteya World, and I’m a co-founder there. Our mission is to make income protection accessible for everyone in the US. And it has been a great journey. Before that, I used to work nine to five job with a big firm, a big four firm, as an auditor and then a financial analyst. And then I moved to a small family business where I met my co-founder, and then we went into the entrepreneurial journey. So that’s in a nutshell, my background. 

Got it. Okay, well, so tell me a little bit about kind of how your journey went, specifically in that what were some of the bumps in the road that you didn’t see coming? 

Yeah, that’s a great story. So you would hear different stories that some of them were successful, some of them were not. So there’s no one playbook that works in that case. So I’m going to share my experience, how I’ve done it, how I’ve thought about the process since my university days, and how I plan to get myself up into this entrepreneurial journey. That currently is successful for me. So when I started early in my career, I noticed, and this is just from observations, that

It’s important that first rule of getting into a successful entrepreneurial journey is to build your skill set.

You need to have a certain skill set in place because at the end of the day, an entrepreneur is solving a pain point for someone else. And to be able to solve a pain point, you need to be an expert, well read, you need to have a good team with you that gets you there. So first is invest in yourself. And that’s what I’ve done early on. I knew from day one I cannot be an entrepreneur because entrepreneurials in general are a risk taking initiative. There’s one out of ten successful startups, but you have other nine. So you look at the news out there and you get so motivated that, hey, I want to be the next big thing. But there’s this survivorship bias and all the stories of people who’ve lost their jobs, they took a risk on themselves and then definitely they went out of business because building a company is really hard. 

Although it’s funny when you say that, there’s two ways of looking at it. Way number one of looking at it is when you say that there’s only one out of ten success rate for new companies that are started. The first way is to say, okay, well, the odds are stacked against me. It’s a 90% stacked to get me. Don’t even try. Another time is to say, okay, just understand that it’s probably going to take me nine to ten times before I get there. 
Exactly. That’s the way to look of the glass quite full, right? Yes. But if you know numbers, if you know statistics, you want to bring the odds towards you, you want to increase those odds. So that’s why I structured it this way. I said to myself, let me get all the pieces in place and then once I start the company, I would at least have a higher chance of success. So skill set is important.

You need to learn how to market, you need to learn how to read a financial statement. You need to know what an accounting ledger is.

These are all the minute details that would help you eventually, as you’re building your company, become better at managing it. Because think about it this way, you start a company where you have an idea and you’re an expert in one field. What happens if you hire the wrong people? You will never be able to know if they’re making mistakes that are costing you money. So you need to be aware that if the team that you’re hiring is doing the right job, great, you’re successful. If they’re not doing the right job, you need to know what they’re doing that’s going to increase your chances of failure. Yeah, so that’s one skill set is key. And what I’ve done early on is I’ve studied accounting because I thought if you know your numbers well, then everything will pile up on top of it. Because investors like numbers, customers like numbers, your pocket like numbers as well. At the end of the day, you want to be rich, right? So accounting was key. I learned it. I went to a big four company where I learned as well, process bureaucracy and how the 9 – 5 job sucks. Sorry for that. Because you’re just a number in any company. You’re just a number. And at the end of the day, that allows you, once you want to start to build your company, to know which culture you want to build, which principles and values you want to build. Things that you don’t like, you’re not going to repeat in your company. And by the way, human pattern is quite easy to detect if you look at it. And a lot of people don’t like a boss who’s bossy or someone who doesn’t value them, or if they are working hard, they are not discriminated against. So these are a few things that you learn in a 9 – 5 job, in a bureaucracy, in a big firm. So skill set is number one, learning through Osmosis, through going through another company that you can suck all of this knowledge. And more importantly, you’re building a plan B. I’ve talked to a lot of investors, and most of the investors say, hey, you have a plan B. You’re not all in your company. I’m not going to invest in you. The smart thing is to have a plan B. But when you consider a plan A to put that plan B on the back burner, forget about it. It’s there. If things go bad with your company, you can go back to your plan B. And that’s what insurance is about, right? I’m in the insurance space. I don’t consider buying an insurance and investment. I consider buying an insurance at plan B, a fallback plan. In case something bad happens to me, I have this insurance to get me back on my feet. 

I should have you talk with all the people who try to pitch me on infinite banking then. So for anybody who is uninitiated, the idea of infinite banking, which is actually valid, is that what you do is you use a cash value insurance policy that you can take loans against to essentially bank yourself as opposed to borrowing from a bank. The thing that the infinite banking people rarely tell you is that the amount of commissions and fees you’ll pay for an infinite banking insurance policy to keep it conforming with financial standards is a tremendous amount of overhead on the capital that you’re putting in. Because I was interested in the concept, but I’ve never been able to see a scenario where the math would work out unless you had it, like, inside of a nonprofit or something, because then it could be a modified endowment contract without triggering tax penalties. But anyway, I’m getting far afield from the conversation topic today.

So skill set is number one. This is what I’ve built my early years on, and I’ve honed my skills. I’ve learned the finance side, the accounting side, and then I started to double and how to build a marketing plan, how to sell. So I read a lot of books on that. I’ve invested a lot of my time after the 9 – 5  job to learn this skill set. And what I’ve done unsuccessfully, which I’ve learned from, is start a lot of websites with a lot of ideas that failed. Even I started a restaurant, and I failed with that restaurant. Now, it costs money, but you learn things that you would not learn if you’re in a cubicle from nine to five. So I’ve learned SEO. I’ve learned digital Marketing. I’ve learned how to do supply chain. Some of them are relevant, some of them are not relevant. But as long as you do what I call a post mortem analysis. So what happened? Why did it happen? Can I learn from it? How can I use it later? Then you already have cut down your chances of doing that again in your future and over.

So skillset is 1 second. Two is go beyond those skill set and learn things and try things even though you might fail. So I’ve done just to count for you. I have, like, ten businesses which I started, but I did not continue. And I learned from there that it doesn’t matter what your idea is if you don’t execute on your idea. The idea is that and a lot of people say, hey, I have an idea, but I cannot share it with you because what if you steal it from me? Well, the reality is, it seems that your idea is not going to make it because you’re not going to execute on it. Because if you’ve executed, you know that it’s 99% of the success comes from execution and not from the idea. 

Yeah, I think that’s a lot of it is that people overvalue ideas in a lot of situations, and they undervalue how hard it is to execute on ideas.

Exactly Doug. That’s the second thing. So the third thing is

 Do not study only the successful companies. Study the unsuccessful. Because the successful companies, they will only show you what has worked for them, but they won’t show you what hasn’t worked. If you look at the unsuccessful one, you would see all the things that put them out of business, and then probably they would pop up in your business.

There’s a commonality. You run out of money quickly, you position your company the wrong way. You don’t talk to the customer. You have problems with your cofounders, someone embezzles you. There’s fraud, there’s unethical decisions. So you learn from the unsuccessful, more from the successful. So this is where I focus early on my effort. I read a lot of companies that died, and I wanted to know why is it the idea? Is it the execution? Is it the team? And you would find, interestingly enough in biographies, some learnings that you wouldn’t find on the internet.

I was just thinking that kind of reminds me of this is an ancient book by now, but the Noah Kagan is how I lost $17 million, because I think he was one of the early Facebook employees, but he got fired before they before they went public. So all the stock disappeared. 

Exactly. I learned the same, by the way, from another book on a Facebook employee called Monkey. I forgot the name, but it’s something monkey. I’ll look it up and he says that I had a lot of stock, but I didn’t know that the stock was in an option format. And the option means you have to pay for the stocks before you actually get it. I didn’t know about that, and now I know. So that’s important. When I offer my employees a stock option, I have to be very transparent with them that it’s not a free meal. You still have to pay because it’s an option. Pay for the stock, but at a much lower price. If you don’t have the money, you will not be able to cash out the funds. And that’s important for key employees in an organization. 

Yeah, exactly. Well, because I think one of the things that you were talking about that I kind of wanted to key on a little bit, because one of the things that I’m very fond of saying is that I think there are two key functions in a company that the owner founder always needs to keep their pulse on. One is the marketing, and two is the money. And my background is in finance, so the money part comes very naturally to me. It’s the marketing part that I really had to learn. And that’s because your marketing and the effectiveness of your marketing and tracking the effectiveness of your marketing is the way that you will be able to continue growing and scaling. Because if you could have the best product in the world and if nobody sells it, then nobody will buy it. One of my favorite things is if you build a better mousetrap, the world will walk right past your door unless somebody sells it. Even the best things in the world still have to be marketed and still have to be sold. That was something that I didn’t get when I was younger. I think that you can figure out a way to augment and outsource all those other functions, but you’ve got to keep your hand on that pulse as an owner, or your company will go off the rails eventually. 

Exactly. That’s a great way to put a Doug. Every function of what you mentioned is key marketing and sales and then finance because that cadence links all together.

Yeah, exactly. Precisely. I really like your skill based focus on as far as making the transition. But the thing I really want to unpack a little bit which is a fascinating perspective that I completely agree with which is study the failures and study the things that the failures that people don’t want to talk to you about. And I think probably one of the best examples I can think of at least just from my setting of putting this into place. So I spent the first 18 years of my career at intel and one of the probably most famous inflection points at intel. I think it was 1984, 1985. In the mid 1980s intel was losing money in the memory business and they had this little tiny microprocessor business that had great margins but low volume. And at that point Andrew Grove and I think it was Gordon Moore basically said okay well if we keep this going we’re going to get fired. And so then they said, okay well if we got fired and someone came in after this after us, what would they do? They go, okay well the next people who come in they would drop the memory business and focus everything on trying to make microprocessors to go. They go, okay well why don’t we just do that now? That’s what got to the famous memory inflection point decision. So

Sometimes when you’re running a business you have to say okay if I was fired or it’s like if I was moved out of my business because it’s struggling and somebody who wasn’t me came in, what would they do differently? And sometimes that’s the mental exercise you have to go through to make those hard decisions to do those pivots.

Exactly. And I think one key thing to the playbook that I’ve designed to myself is you need also to study the playbook of the people who give you the money because funding is key. So you have to understand how they think, what do they look at, how do they read the pitch. And then definitely you need to get an introduction to them. So if you know how they’re thinking now when you come with an idea that has grounds your chances are much higher to get funded. And I think that a lot of entrepreneurs that I’ve met don’t know how to do that. They just say hey I have an idea and then they called email an investor. It’s never going to work. Right? You need to show and not tell. You need to show here’s my MVP so that we can go into how we get there. But here’s my MVP, here’s some traction.

Here’s why I say MVP. What you mean is minimum viable product.

Yes, exactly. So it’s like the thing that would prove that your idea has grounds, and it shows that there are people out there willing to buy your product or services. And now an investor who looks at his money as a potential cash flow, they want to put it somewhere, and then they will get more out of it, if that makes sense to them. Now the chances of getting invested is much higher.

Yeah, well, at least just from my observation, because I’ve gone through a couple of different startups that ended up, well, not failing as in their dead, but failing as in they didn’t go the way that we thought, and we’re having to kind of step back. Pivot, reassess, et cetera. But the stage that a lot of companies, especially tech companies, go through basically, you’ll start off with an idea that you’ll put a valuation behind, and you’ll sell off a piece of that valuation. And then what you do is you take that capital from that equity sale. And then what you do is you work your way to the next milestone, and then you use whatever you created for the next milestone to sell off more equity to get the funding to go to the next milestone. Basically, what happens is you go in a continually accelerating path toward either an acquisition exit, an IPO or failure. 

Exactly. You named it. Quite right. If you want the roadmap right now, each one of them is much harder than the other. And for me, the first part so if I have an idea today, I’m an entrepreneur. I have an idea. I’m sitting behind a cubic. When do I pull the trigger? When I say, okay, I’m quitting, and I’m going out there. If I were to think in the shoes of that person. So how I would do it is I’ve built my skill set. I’ve read everything I know how to pitch. I have an idea. So before I go and leave my job, I want to make sure the zero to 100 customers, I have a plan to get them, and I go and get them. That’s what we call product market fit. So the idea is there. I’ve built some form of prototype, and I went to 100 people, and they said, this is great. I will buy your products and service. And the premise behind all of this is you’re solving a pain point if you’re a painkiller. You’re solving a pain point if you’re a vitamin. It’s a nice to have thing. Maybe those 100 people would buy today, but maybe you will not retain them. So the zero to 100 is a key indicator for you that you’re ready to switch. You have an idea, probably you’ll get funded. People are willing to pay for it, and then you go out. And I’m fascinated by the zero to 100. I did create my own podcast called The First 100, where I interview other entrepreneurs just to understand how they managed to get their 1st 100 paying customer. And you see a common theme. Every one of these entrepreneurs went out and sold the first 100 customers themselves. They knocked on doors. They tried things that did not skate. They failed multiple times. But at the end of the day, when this momentum starts to pick up over the hundred, they knew that they had a business that they can go out and raise money for. So this is just a small highlight of how I would think, when is the right time to switch from that nine to five to an entrepreneurial journey.

Got you well, and one of the things that I think is really valuable, especially if you’re talking about a founder who’s going out and personally selling the first hundred clients, at least 100 clients, I think the most valuable thing that you’re going to get from that is if you keep track well, you will be able to find out, right, what messaging resonates, what messaging doesn’t resonate, what type of cycle leads toward conversion, whereas what tends to result in dead ends. Because one of the biggest mistakes, especially in big corporations that people make is they will try to automate or outsource a product or a process that has not been leaned out yet. And so then what you end up doing is you just end up scaling problems, which tends to have very bad outcomes. 

Correct. And people rush into that. That’s the thing. They rush into that and it fails. And then it’s a catastrophe because they’ve left their job. So be smart. And when you want to switch, have a fallback plan and make sure your idea gets that zero to 100 traction. And then you have enough positive flags to say, I’m going to do that switch. Because a lot of people hate their jobs and they switch and then they fail and they have a mortgage or they have children that they need to pay their schooling allowance for. That’s a bad choice. That’s a bad choice. The numbers are stacked against you. Think about it this way. If you want to play in the NBA, you need to know that only 1% make it there. So if you’re not willing to have all your Ducks in place, it’s hard to get to that 1%. You might get to the G League, which is 10%, but probably that’s not the outcome you want. 

No, exactly. Well, or like for the and I’m going a little afield, so but I’ll take it back in a second. The the metaphor that I like to use for the NBA, right, is that there’s about 30 I think there’s 30 or 32 active teams. I’ll just use 30 to make sure there’s 30 active teams. And the active roster on each team is ten players. So that means that in order to be on an NBA roster, you have to be one of the 300 best basketball players in the entire world. And this is accounting for the people like LeBron James, like Dwight Howard,  like all the household names. So, okay, take those people off the list because you’re not going to push one of them out of their spot. And so now you have to crack that top 300 and have somebody notice you. It’s not impossible, but it’s a high bar. 

Exactly. It’s a high bar. And that’s why

 You need to have certain things in order. Skills, ability to lead, ability to manage, ability to solve conflicts. Because the moment you shift from a nine to five job, you’re a firefighter. Everything is your responsibility, and and you’re accountable, even if someone else does a mistake. So you need to have all of these in place, by the way. No one can be ready 100%. No one can be ready. Right. You need to practice. Practice makes perfect. Actually. Perfect practice makes perfect. Bad practice makes bad decisions at the end of the day. But at least practice is important. So that’s my advice.

That’s my five pillars of how I did the switch. 

Got it? Yeah. And if I could append with one, I would say that once you have decided to make that switch, to be all in on it and just understand that you are ready, willing, and able to pivot an unlimited amount of times until you get there. The metaphor that I like to use is learning how to walk. Right? For example, when kids are learning how to walk, people don’t say, okay, well, you know, they tried once, and we’re just going to give up on it. Well, okay. How long do you give your kids to learn how to walk? You give them until they learn how to walk. It’s the exact same thing if you’re trying to stand up a business, once you’ve decided that’s what you’re doing, that’s what you’re doing until you figure it out.

Yeah. And one more thing to add to that, Doug, is

You need to be very comfortable with rejections. You need actually to train to be rejected. You need to be trained to be said no.

One of the things I did in my early years is no one I hate it to be rejected. So most of the time, I did not try. And I learned that people say no, you have to be comfortable with that. And my training was to go to a Starbucks and ask for a 25% discount on every cup of coffee I asked for. In general, everyone’s going to say no. Right? No one’s going to give you a 25% discount, especially in Starbucks, but it teaches your nervous system to accept a no. So now when I go to a venture capitalist, I get 200. Rejections doesn’t demotivate me. I just keep going, just keep asking. I’m comfortable that I’ll get there. It’s a numbers game. It’s the same with customers. Customers are going to say no to your product or service. So you have to be accustomed not to say, okay, I’m a failure. Let me quit. So that’s one advice.

Got it. That’s awesome. Normally what I do at the end of podcast is I ask for one last inside or piece of advice, but I think you just gave it to us. So in this case, what I’ll ask for is, how can people get a hold of you? What’s your website? 

Our company is called Asteya, and the website is Asteya.World. We’re solving the income protection problem in the US. Less than 11% of the US population have some form of income protection. So if something bad happens to you, well, you’re in trouble. You cannot pay your mortgage. So that’s what we’re solving. We believe everyone in the US deserves the right to have access to this. Only 11% have and me personally, if someone wants to reach out to me, I’m on LinkedIn. I’m fairly quick to respond, so just send me a message there. I’m happy to connect. 

Excellent. Well, hey, Hadi, I really appreciate you taking the time today. 

Thank you for your time. 

All right.

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