The Power of Framing: Searchers Switching Jobs After 2 Years
February 15, 2020
by an investor in Palm Beach, FL, USA
I’ve recently learned some surprising news- that 70% of newly minted MBAs from the top business schools changed jobs before their second anniversary.
One of the primary reasons many highly talented people pass up on raising a search fund is because of the the fear of concluding a 2-year search without acquiring a company. A rationale concern.
Would more great people attempt a search if they framed their downside case as switching jobs after two years just like 70% of their peers do?
What do you think?
from HEC School of Management, Paris in Seattle, WA, USA
Career Trajectory - There is this notion that you have to show positive results immediately after your MBA. Many of us realize our first job post MBA is unlikely to be long term. It sounds really good in at the next interview to say "Hi, I graduated and did XYZ at McKinsey for the last two years" rather than "I graduated and make an unsuccessful bid to buy a company". The first case you have a very sought after profile, and in the second I don't even know how employers will look at failed searchers.
Experience - I agree with John, we learn a ton in the MBA, which is amazing, but we also learn just how much we still don't know. It can be easy to say "I'll just work in consulting for a couple years to gain more experience". I do think search funds are a much easier proposition to former entrepreneurs, but its still a big step larger than a startup with handful of employees.
Financial - Connor is also spot on about the financials. After 1-2 years without a salary, plus the cost of school, its very tempting to take the big bucks at a top consulting firm for a couple years to build a more stable financial base before starting a search fund. Especially when you've sacrificed saving for a down payment on a house or delayed having kids to get your MBA.
Career Center - Our school's career center has fantastic relationships with all the top consulting firms, banks, tech giants, etc. If you want a job there, they know exactly how to help. When you tell them your goal is to build your own startup or acquire an SMB, they just give get confused. Additionally top MBA programs are alway under pressure to boost their stats, which is passed along to the students as well. It looks really good for the school to say "Our top employers are Amazon, BCG, GE and our graduates make an average salary of $1xxK one year after graduation".
Then there are those of us that are just fundamentally unhappy working in a traditional corporate role and are drawn to the more adventurous path to become entrepreneurs or searchers.
from Stanford University in New York, NY, USA
For many people, I think it’s less about framing of the downside than it is about becoming financially secure (eg, paying down >$100k student debt). 2 years of search income is often significantly less than 2 years of income at a more traditional post-MBA employer from a top school (private equity, tech, or consulting). Adding 2 years of reduced (search) income to 2 years of taking $0 income while also adding on expensive student debt isn’t worth it to many of us. The risk of not acquiring a business is probably a risk most of us are willing to take, but layering that risk on top of reduced income and high debt can make the option unattractive. Anecdotally, the price of my monthly minimum student debt payments informed the options I considered immediately out of school; instead of something entrepreneurial, I chose a higher-paying job in a low cost-of-living city. Doing so — and therefore delaying my search — removed those financial distractions, and now I feel confident in my decision to search.
My friend’s take on 2.9 employers is that the first employer is for financial security, the second for work-life balance, and the third a platform for the duration of their career. Thinking of the 70% who change jobs — maybe there’s an opportunity to recruit those who passed on search after graduation, feel financially secure now, and are considering changing employers.