Entrepreneurship after PhD

PhD is a passport to academic elite. But is this really true? Not really. To substantiate my claim, I will share with you the following figure from a publication in Nature Biotechnology:

(Source: Schillebeeckx et al., (2013). The missing piece to changing the university culture. Nature Biotech. 31(10): 938-940; Reproduced with permission from Nature Biotechnology)

As you can see, in last 30 years, only 1/8th of the PhDs in science and engineering ended up in faculty positions. What happened to the remaining ~90% PhDs? Probably they took one of the career paths discussed in the PhD Career Guide. 

In this blog, I will focus on pursuing an entrepreneurial career after a PhD. I will build a case by highlighting a few similarities between PhD and new venture creation.

1. Commitment: It takes ~5 years to finish a PhD. In some cases, it could take even longer! It is a lonely road that is full of hard work and frustration interspersed with moments of joy when experiments are working (which is rare :-)). To be able to effectively handle the frustration, one has to be committed to get a PhD. For those who lack this commitment, it is not uncommon to see them drop out of their PhD program. 

Starting a company is also a road less traveled. With >90% failure rate of startups, one has to be fully committed to the company. Unlike a well-cushioned job in a big company, starting one's own company will be full of frustration. Many things could go wrong e.g. co-founder leaving, no seed capital that will require bootstrapping etc., all of which will test the entrepreneurs perseverance. Depending on the product of one's startup, it could take anywhere from 1 to 5 or even more years before their startup becomes profitable.

2. Research: The core of PhD is research. The following figure depicts the recursive loop of doctoral research:

The above process is very similar to the development of a Minimum Viable Product (MVP). In the following infographic, Eric Ries (the author of "The Lean Startup") explains process of continuous innovation while developing an MVP:

Thus, we can see that the recursive hypothesis testing during PhD is very similar to the development of an MVP.

3. Handling Failure: During PhD, failure is an integral component of hypothesis testing. It is very rare that an experiment has worked in the first instance. But, based on each data point or more precisely building on failures, a PhD student keeps trying different hypotheses, various experimental conditions, discussing with mentors and fellow students and searching literature - one way or the other, the student makes the experiments work.

In startups, developing an MVP is fraught with failures. Until an MVP is ready, the founders have to keep trying. And, after customer validation, the MVP has to be improved further. Besides, there is >90% chance that the startup will fail. But, the entrepreneur keeps going - trying one hypothesis after another or in some cases starting one startup after another!

4. Pitching to investors: An integral component to PhD training is presenting at conferences, lab meetings and journal clubs. The presentations can range from discussing a journal paper over lunch or presenting a poster or giving longer presentations to a diverse audience. Besides, our friends and family are always curious to know why we are so busy!

Similarly, integral to entrepreneurship is pitching to the investors, who are not subject matter experts. Hence, jargon should be avoided and the business has to be explained in an interesting way. Alike PhD, when we venture into a startup, our friends and family are always curious about what is keeping us busy and where are all the savings gone! :-)

Thus, presenting our research as well as pitching to investors both require that the topic should be explained in a way to grab attention of the audience.

5. Handling rejection: PhD prepares us to handle rejection. For example, it is seldom that a submitted manuscript will be accepted immediately. In many cases, it is rejected or accepted with comments. The usual first response to the rejection is pain - why was it rejected? Given the effort that we put into writing the manuscript, we always find a reason to disagree with the reviewer's comments. Nevertheless, we have to respond to their decision. Either we can write a rebuttal or resubmit it to another journal or perform additional experiments that were recommended by the reviewers. Thus, one way or the other, we find a way to deal with rejection.

While starting a new enterprise, one will be rejected in many different ways. For instance, the customers may not immediately accept the product or in other cases the potential investors will reject the proposal. But, without loosing enthusiasm, one has to be determined and keep going.

6. Constant worrying: If a graduate student is not working at nights and weekends, then one is at least thinking about it! No matter how much one tries to take a "break", usually it does not last long. For many, these "breaks" turn to be eureka moments that help in making major progress in research. It is not unusual to have a "brilliant idea" while watching movies, in the middle of the night or while partying! I have seen some graduate students maintain an "idea book" to ensure that they do not miss any ideas.

Unlike working for an established company, where all infrastructure and processes are in place and the focus is only to "perform and deliver", nothing is in place in a startup. The product, website, brand, logo, strategy, sales, marketing, finance, human resources, legal etc. everything has to be put in place by the founders. This requires a constant engagement of the founders.

Thus, without being seduced by the potential title of "Doctor" or with the potential of making billions after exiting from the startup, both graduate students and entrepreneurs are constantly thinking about their research/startups.

7. Low income: Let the truth be told. The graduate student stipend is barely enough to make ends meet! In developed countries, it is still decent enough to afford a reasonable standard of life for a single person. In contrast, in countries like India, it is barely enough to buy a laptop on loan installments! (car is definitely not an option for graduate students in India). Nevertheless, we learn to manage with available funds and be happy!

The founder of a startup has to bootstrap (mostly without salary) until there is the first investment. Even after the first investment, the salary will not be equal to what one could get in an established company. Yet, the entrepreneur voluntarily accepts the economic hardship to "build" the company.

Given these similarities, in my opinion, PhD training provides the necessary foundation, soft skills and mind set that can make one an entrepreneur.