Back in 2008 Patrick McGinnnis was vice president of an emerging-markets investment fund in the US which happened to sit within a division of the insurance firm AIG. AIG had a trillion-dollar balance sheet and the division Patrick sat in had nothing to do with the risky investments that brought the company down. He thought his job was secure. He was wrong.
“Rather than working for a trillion-dollar business, I was now essentially a ward of the state,” he says. “I had naively expected the safety and security of one company to provide everything I needed. Unfortunately for me, that stability was an illusion.”
The experience taught him to never again bet his security on the fate of one company. He decided that if secure jobs could be risky, why not embrace risk and turn to entrepreneurship. He did not feel like an entrepreneur and was worried about how he could make it a sustainable choice, but building up his business pursuits alongside other work as well as mentoring those in the early stages of their careers made it seem much more realistic. Gradually he built up his self employed work alongside his day job.
After receiving a lot of requests for advice from people, including friends, who wanted the kind of portfolio life he had and having written about his experiences along the way, he decided to write a book. A friend put him in touch with a literary agent in London. The result is The 10% Entrepreneur: Live Your Dream Without Quitting Your Day Job, which is published by Penguin on 28th April. The book argues for a third way between the freedom and risk of running your own business and the relative inflexibility and stability of life as an employee.
Patrick says: “The book is a confluence of two things: traditional careers are not what they were and entrepreneurship still feels unavailable to many people. I wanted to examine how you can bring the two together,” he says.
He argues passionately that straddling both types of work increases your skills, your motivation and, hopefully, your earning power without any of the pitfalls associated with putting all your eggs in the entrepreneurial basket. Plus, as more companies seek employees with the kind of innovative ideas that will help them compete against dynamic start-ups in the technology age, he claims there is a virtuous circle of benefits. Each side of the work equation feeds the other.
He adds that companies are increasingly keen to teach their employees entrepreneurial skills, but says there is no better way to learn than by doing. Indeed he has been asked to speak about his model by a number of organisations, including Google UK.
Patrick chose the title of his book because he says 10% is a meaningful commitment without being a huge sacrifice. He says that there’s no need to keep it to 10%, though. “The more experience you have the more confidence you get and the deeper your network becomes so there is a snowball effect,” he says.
Patrick believes the 10% model can work for all ages of employee, but is particularly suited to those who already have a lot of experience. That includes many women who may be looking to try something new after having children.
Patrick has worked for some amazing women in his career and seen the trade-offs and challenges working mums often face and that many have taken having children as an opportunity to do something different that they would never have done before. That often leads them to consider entrepreneurship, he says, due to the flexibility, but also the challenge of building something new. And with more families relying on a dual income, it needs to be a sustainable option.
He says the 10% Entrepreneur model fits this need and is “where the economy is going”. He cites figures showing 40% of people in the US are projected to be freelancers by 2020. Entrepreneurship is different from freelancing, though, says Patrick, because freelancers are dependent on those who pay the bills and don’t own anything they are working on. “They are not building any equity for the long term,” he says. That means they are reliant on the next piece of work whereas entrepreneurs have a stake in a business that they can sell or profit from.
In the book he outlines what he says are the five types of 10% entrepreneurs. These include investing capital in other companies, using your expertise to advise other companies for a stake in the company and founding your own business.
The 10% can be a particular time of the week or can fit around other work. Patrick, whose day job is as a venture capitalist and private equity investor, says he has found he is much more efficient with his time – something many a parent can empathise with – since he started doing entrepreneurial work on the side of his day job.
The book goes into detail about the different types of entrepreneurialism that would work and includes case studies of those doing it, such as Ready Steady Mums’ Katy Tuncer, as well as practical advice on how to get started, how to build your reputation and how to overcome obstacles, including how to learn from failure. It is realistic that sacrifice will be involved to build extra time into your schedule, but says “your 10% should make your life richer and more interesting, but not at the expense of your relationships” and counsels that the support of family is vital. He cites cases too of 10 percenters who have involved their families in their ventures.
He writes: “Through part-time entrepreneurship, you will achieve more than just financial or professional diversification. You will embark on a series of adventures that will make your life richer and more interesting…Engaging in entrepreneurship on the side will grant you a level of freedom that you could never access as a full-time entrepreneur. You will be able to partake in the excitement that comes from building something new while avoiding the stresses that come with taking risks. You can experiment with idea that you might want to pursue full time, but you can do so without putting all your eggs in one basket or jeopardising your lifestyle. Instead, you can employ a sustainable, pragmatic strategy that will complement and diversity your existing career. After all, your life, like your investment portfolio, is best when it’s diversified.”
*The 10% Entrepreneur by Patrick McGinnis is published by Penguin on 28th April, price £14.99.