Recently, I’ve been asked for career advice by a number of recent college graduates, as well as more experienced members of the emerging workforce still in the early stages of their professional life. Given my broad experience across many different types of companies and roles, most of these ‘young guns’ seem to come to me for pretty much two reasons.
The first is that they’re looking for specific insights about an industry or company. The other is that they’ve been bit by the entrepreneurship bug and are attempting to start their own ventures.
No matter what their motivation, almost every one of them is very ambitious and driven to find a way to make a lot of money (at least compared to where they’re at today). I begin these discussions by framing the conversation and introducing my supposition that there are basically four routes to financial success over the course of a business career.
Each of these options has different applications, and implications, but following any of these four paths should pay off over the long term:
1. Paying Your Dues
This is the most traditional and obvious of the career paths, but the most obvious: get in at an established company and work your way through the ranks. Yes, I understand that this is old school and takes several years to work your way up the corporate ladder, but the fact remains that paying your dues and climbing companies’ respective ranks is still a great way to make a lot of money.
Note that I used the word ‘companies’ (plural) and not ‘company.’ This isn’t meant to detract from the value of gaining experience within a single established organization, especially if you find the right fit or a situation where you can accelerate your career progression.
This just means that working for established companies gives you the experience you need to be financially rewarded as you climb your way to the top – and reap increased dividends when you get there.
Conversely, staying focused on a particular industry, like CPG, tech, defense, financial services, etc. can catapult you to the C-Suite faster. All you need to do is read the financial filings of any public company to see the kinds of compensation packages the executive teams at these firms earn. Spoiler alert: it’s a lot.
As I compare myself to my peers back when I started out my own career path, I see that so many of them have risen through the ranks to the VP level or higher at some of the world’s biggest brands (such as GE, Pepsi, Kraft and Viacom, to name a few). They’ve worked hard to get there, but I’m telling you, based on the rich compensation packages, it’s pretty nice when that sweat equity finally turns into a tremendous amount of real equity.
The key for each of them is that along the line, they became functional or business experts and either concentrated on one industry or built a skillset that’s transferrable across adjacent industries. Most importantly, though, they stayed the course and didn’t jump to the next job at the drop of a hat. Instead, they stayed at a single organization for many years, climbing the ranks (and rolling up their sleeves) to reach a level with a large enough responsibility and scope to command a commensurately large paycheck. The dedication and commitment required for paying your dues pays off in due time.
You don’t even have to be an “A” player – you just have to be a solid performer and consistently deliver for the company. Even average performers and B players tend to keep climbing over the course of several years as they continue to amass the specialized industry and functional expertise required to make it to the top of the org chart (and pay scale).
2. Make Professional Services Your Product.
Working as a professional service provider is another way to make your career pay off. Some examples of these would be management consultants, investment bankers, lawyers, accountants, real estate agents, doctors, etc. In these or any type of professional services role, it’s more or less a meritocracy, so if you’re good at what you do and work hard, then you’ll get paid what you deserve – which is a lot, given the high demand for these highly skilled kinds of services.
The tradeoff, of course, is that it takes a while to start out on this path, which means that paying your dues can be a steep cost in the professional services arena. Most of these roles require extensive travel or exhausting hours. Typically it takes someone in professional services somewhere between 7-10 years to achieve the level of success required to finally get some control over your work life – and time to enjoy the financial rewards, which at this point, really start to scale.
On balance, if you’re willing to put in the low pay and luxury free lifestyle required for the first few years of starting out, this is probably one of the best risk/reward choices for a career path if, ultimately, your career choice is mainly monetarily motivated.
I’ve got several friends offering professional services in fields like law, management consulting or accounting who, after many years learning the trade at companies like McKinsey, PwC or Accenture, have had the ability to leave and set up their own shop with great success. While it obviously took some time and persistence for their practices to pay off, they’re now running successful firms – and reaping the financial rewards that come with it.
3. Be the Best.
Becoming truly world class at any profession for which market demand outstrips supply is one of the hardest career paths to pursue, but one of the most lucrative, too. Becoming truly world class at something for which there’s a real demand, whether that’s a scientist, mathematician, PR Manager, designer, software developer or whatever means that you’re a lot like a top-tier athlete hitting free agency: you can more or less write your own ticket (and paycheck).
If you’re one of the best in the world at something – anything – than you’ll be able to make a lot of money either working for a company that specifically needs to leverage your skills in order to succeed, or else creating your own company or consultancy as a one-man shop. You can also augment the often exorbitant fees companies and corporations are willing to pay for world-class expertise with additional income through such ancillary revenue streams as professional speaking and writing engagements.
The obvious challenge on this path is there’s no faking being the best. You need to be truly world class at what you do, and this takes years and years of dedication, passion and patience. And, since this career ladder takes perhaps the longest to climb, there’s no guarantee that what’s hot in the market today will still be in demand by the time you build up the requisite expertise over the intervening years.
Similarly, there’s no real guarantee that you’ll ever achieve a level of proficiency that legitimizes your claim at being among the best in the business. But if you are, and your skills are in demand, you’ll be able to bank on that expertise and reap the financial rewards that will almost inevitably follow.
4. Embrace Entrepreneurship.
This is one of the most common paths to pursue, and as a rule of thumb, it’s also the biggest risk of any of these career paths. But entrepreneurship also has the biggest upside when it comes to rewards, too. There’s already a ton of stuff written about what kind of person or profile makes the most successful entrepreneurs, and the various paths open to those who opt for the autonomy of entrepreneurship, from startups to small businesses to franchising.
Done the right way, any of these options can pay off, but as a warning, not everyone has the personality, risk profile and skill set to become an entrepreneur. Given the large standard deviation in possible outcomes and the requisite commitment to stand a reasonable chance at success, you’ve got to be self-aware enough to know if this path truly suits your competencies, mindset and compensation expectations.
My general advice to those thinking about pursuing their own ventures is to wait until you have some level of expertise in a specific area that can be applied to, and inform, your entrepreneurship. Having a unique skillset combined with a deep understanding of the market, competitive landscape, customer need and how to build a business around these dynamic elements requires some deep domain or functional knowledge.
Sure, there are a few very notable exceptions (Zuck, I’m looking at you), but these savants are obviously outliers, and, as they say on commercials, individual results will vary. That’s why getting the experience needed to solve any problem or business need better than what’s currently available should be the starting point of any entrepreneurial venture.
As I tell the folks who come to me for advice, remember that you don’t have to make a commitment to any of these options. It’s not an “either/or” proposition, and you’re not locked into any one, but beware that there are tradeoffs to pursuing any of these paths. As your career progresses, you’ll naturally close the door to some opportunities, even as others open. You can still be financially secure by mixing and matching two or three of these options, but in order to get to the level of wealth so many emerging workers expect – to really make it rain – you’d be wise to pick one lane and stick to it.
But remember: it’s not all about the Benjamins. And like any of these options, there are trade-offs that come with chasing a bigger paycheck – and if you don’t have a passion for what you do, there’s no amount of money in the world that can replace the value inherent to doing what you love.
Of course, for many of us, that’s making money, so if you want to rake it in, than choosing one of these four paths will really pay off. Promise.
About the Author: Ray Tenenbaum is the founder of Great Hires, an early stage recruiting technology startup offering a job slate interviewing platform and mobile application. Ray has previously spent half of his career building Silicon Valley startups such as Red Answers and Adify (later sold to Cox Media); the other half of his career was spent in marketing and leadership roles at enterprise organizations including Proctor & Gamble, Kraft, Booz & Co. and Intuit. Ray holds an MBA from the University of Michigan as well as a bachelor’s in chemical engineering from McGill University.