During one of the final days of my 2014 entrepreneurial finance course at Harvard Business School, we had a guest speaker — Mitt Romney. It had been a few years since his defeat in the presidential election, but he hadn’t yet announced his next big thing. (Now he’s the overwhelming favorite for Orrin Hatch’s soon-to-be-vacant Senate seat.)
Mitt spoke to us for a few minutes about his past career, the election, and some of his political views. Then, in the final few minutes, he opened it up for questions.
I had one.
Earlier that year, I’d interned as a Product Manager at Google and had been offered the chance to go back full-time. I loved Google: The amazing technology, the fantastic peers, the inspiring leadership – and yes, Mountain View’s pristine weather. All the factors combined to foretell a great future and a great life for me and my family. (I was married with two kids and another on the way.)
But I hadn’t yet accepted Google’s offer; I had pushed the decision and the recruiters back – and back and back. I was ill at ease, unsure of what to do, and with something in me still believing there might be more to achieve than just that great career and lifestyle that I envisioned at Google.
So when Mitt asked for questions, I knew what I had to ask.
Now, regardless of your politics, Mitt Romney was a guy who’d reached what appeared to be the pinnacle of success in business, in family, and in civic life. No doubt he’d been faced with difficult, life-altering decisions between two good (even great) options — and had clearly come out on top.
I was about to make one of those decisions, so my hand went in the air immediately. Unfortunately, so did 30 other hands. After he took a few other questions — with time left for just one more — he called on me.
“A lot of us are making important career decisions right now,” I said. “For instance, I’m choosing between working for a big tech company or starting a new venture. How have you made those types of decisions throughout your life?”
He took a moment to gather his thoughts, and then shared this insight:
“Each step I took seemed right at the time.
“When there were big decisions to make, I asked myself if I would be working with people I liked and if we’d be doing interesting things. The great thing about our system is that it rewards success, but doesn’t penalize failure too heavily!
“I didn’t plan out my life, and everything that’s happened to me I never dreamed would happen.”
Each step I took seemed right at the time. I’ve thought about that advice often. After I processed it, what became glaringly obvious regarding my unease about Google was that it simply didn’t seem right.
And that’s because it wasn’t. I knew I was an entrepreneur at heart, and regardless of how great Google could have been, what I really needed to do was start my own thing.
Within a few weeks, I had started programming the first version of what would eventually become ZipBooks. And the most amazing thing? It was literally the day I had the idea for it, I knew that was the right thing. I was excited, the path forward was clear, and I couldn’t not work on it — I found myself working on it late into the night, excited about each aspect of building a new company. It was simply right.
Entrepreneurs often stress about the “worst case scenario.” But what Mitt helped me realize was that often, the worst-case scenario for venture-backed entrepreneurs is tolerable. Our system – as imperfect as it may be – truly does reward success while allowing those who have proven themselves to be honest, hard-working, and humble to come back from the most miserable of failures.
One of my professors referred to this as a “call option.” When you have a “floor,” the way to increase the value of the call option is to increase its volatility (the Black Scholes option pricing model, for the finance folks out there). Yes, the value may go up or down, but it won’t go beneath your floor! Correlating this to real life: if you’re employable, that’s your floor. So the way to increase the likelihood of wild success is actually to take more risk.
That idea gave me a lot of comfort as I moved forward. My final semester, I worked on the product, got some meetings, and received my first term sheet the week of graduation! We closed a pre-seed round within a couple weeks and ZipBooks had lift-off.
It’s been a sprint ever since, and it’s been hard at times. Very hard, even. But it’s always seemed right. And when it’s time for the next big decision, I know that one will too.
Tim Chaves is CEO at ZipBooks, modern accounting software for small businesses. Tim previously founded and sold two small businesses, and holds an MBA from Harvard Business School.