Full Transcript The Illusion of Job Security 0:01 Welcome to the Startup Physicians [music] podcast where we explore how 0:05 doctors lead healthcare innovation. Please like and follow our show to join 0:10 our community of physicians [music] contributing to meaningful change. 0:16 Fear [music] of economic uncertainty is what stops physicians from becoming 0:21 founders. I've been there and I've walked through it. Being a founder isn't 0:26 for everyone. But if it's pulling at you and fear is what's blocking you, there 0:31 is a pathway that doesn't put your finances at risk. You just need to know 0:36 the pathway and the details of how to build the plan. Welcome to Startup 0:40 Physicians. I'm your host, Dr. Allison Kerman, and we are going to dive into 0:45 the illusion of security of a W2 job and how that can sometimes cost founders the 0:52 chance to follow their vision. So, I want to challenge the word guaranteed. I 0:58 see a lot of people who feel trapped in their current working situation and 1:03 people who might want to start a company or startup, but they just couldn't. They 1:07 say there's no way that they could start a company. They don't have the money. 1:12 They can't quit their job. They can't do this. and they flat out don't have a 1:16 capital strategy for how they would initiate a new concept or or really get 1:22 something off the ground. I have left multiple W2 jobs in my career and I have 1:29 built companies and and walked away from that security and I talk physician 1:35 founders through exactly this every day. Most of the fear about taking a leap is 1:40 fear of something that isn't there. So, let me show you what I mean. Here's what 1:45 I want to walk you through. First, we're going to talk about all the ways you can 1:49 make money because you have more levers than you think. And then I want to walk 1:53 through the personal financial model because before you build a business 1:57 plan, you need to know your own numbers. These are real important decisions to 2:04 make. You can't just not feed your family. So, you want to take risk, but 2:08 take risk responsibly. and only once you've really verified how you're going 2:13 to pull it off. And then we talk about the business model of your actual 2:18 concept. This is something that a lot of people actually don't know how to do is 2:21 building out a financial model and making sure that you model in what your 2:26 compensation is going to be and your capital strategy and then how to derisk 2:31 the whole thing on paper before you ever make a jump. And by the end of this, I 2:36 want you to see something clearly. the leap that most people are afraid of. 2:41 Most of the time it's not a huge leap. It's just a stepbystep process where you 2:46 do math and you find opportunities and you take the next step. It's it's one 2:51 step forward at a time. Um and very few people are just jumping off a cliff. So 2:57 a big mindset shift for me happened when I decided that I absolutely believe I 3:04 have unlimited ways to make money. That doesn't mean that I'm like completely 3:09 loaded. I don't want you to think that. It means that when I started to look at 3:13 leaving my job at multiple times in my career, I did a lot of assessment first. 3:19 So, I did an assessment of how much money I actually needed. As a doctor, 3:25 you really have so many opportunities to make money. And it may not be as much 3:30 out the gate of as your W2 job. and you may be essentially making an investment 3:35 of your time and your energy for a for a lower rate in the beginning to build 3:41 something bigger. So the opportunities you have you could do locoms, you could 3:46 have a PRN job, you could do telealth, urgent care, expert witness work. When I 3:50 was building my most recent business, I did take a locoms role at a really great 3:55 children's hospital. I actually had a lot of fun doing it, but I would fly 3:59 there and work four shifts a month. And that four shifts because of the 4:04 situation of the hospital and the amount they were paying, it basically was 4:08 similar to what my full-time income had been. And then I had the other 26 days a 4:13 month to build what I was working towards. So, the new business 4:18 development, the the business that wasn't making any money yet, I was able 4:21 to buy myself a runway of how I could fund my time and and maintain the things 4:28 that I needed to cover in life to be able to invest in the next business 4:34 model. And the difference between creating a business model and just doing 4:39 shift work is I can't 10x my income doing shift work. I don't have 10x the 4:45 amount of time But if you actually give yourself some 4:48 time to build a b a scalable business model, you can absolutely 10x or more 4:55 scale the revenue from that business model. So you have to be able to find
Understanding Personal Finances 5:00 those measures of how you can create space for yourself to to really pull 5:05 these levers. And it's really very uh what the options are. So, 5:12 another example is that when I move, many of you know I moved from St. Louis 5:16 to Nashville to work at a firm and um I wasn't ready to give up clinical 5:22 practice and I actually stayed on staff in the ER in St. Louis. And that's 5:27 another lever for me personally, financially is that I can still go back 5:31 and pick up ER shifts there. I'm I'm a PRN and not a locom. So, it's not at a 5:36 really high locoms rate, but they're not going to get rid of me. I go and pick up 5:40 weekends. I visit my mom. I bring my kids and it's just another lever. It's 5:44 it's a lower hourly rate than the locom's work, but it was flexible and I 5:49 kind of dial it up when I want to visit family and make more income and dial it 5:52 down when I don't. And it serves another purpose for me, too, which is to stay 5:57 clinical and stay credentialed and stay practicing and seeing seeing patients. 6:01 So, those are just a couple of examples. you really have a lot of these options 6:05 and you're not focused on them because you've been focused on what am I going 6:11 to do if I don't have my job? What about benefits and what about insurance and 6:16 how am I going to make ends meet? I I need that security of a paycheck all the 6:20 time. And I I get that. I I completely get that. I've been through this thought 6:24 exercise before. But I mean, even things like benefits, like all of this is math. 6:28 Like it's really all math. You can buy insurance. I there's actually a doctor 6:33 who I had on my podcast who started a company to get group rates on health 6:37 insurance for physicians. So there are options and so that's really the income 6:42 side. You can create pathways to kind of bring together different opportunities 6:48 for income if you really want to take a different life path and and get out of 6:52 the W2 space. Um that's the income side. But before you look at that, you 6:56 actually have to also look at your expenses. I definitely went through this 6:59 when I was leaving a very high paid administrative position. Um, it was a 7:04 lot higher than what I could generally have made in my specialty. I was in a 7:08 leadership role and it was well compensated and I walked away from it. I 7:13 was really unhappy in that role and with the work. It was not aligned with my 7:18 interests or my passions and I did have something I wanted to invest my time in 7:23 even though it didn't have a clear path to revenue yet. Um, and it was a very 7:28 personal decision. My husband and I before you don't just quit your job. You 7:32 have to do calculations and really see what am I walking towards and how could 7:37 I build this and make it work. So, we we did a deep dive on our finances. We took 7:42 all our financial data and put it into a personal financial model. And I like to 7:48 really look and say like what if what if we reset everything? What if we 7:52 cancelled the gym membership and maybe the kids don't do summer camps this 7:56 year? in what if I did that or that or that. And recognize that when you're 7:59 building a personal or a business financial model, everything is just an 8:03 assumption. So all the assumptions you make about the expenses you have to have 8:07 versus the ones you don't. And so I really build like three budgets. Now 8:12 when I do this for either personal or business, I really try and get down to 8:16 the bare bones um expenses. are the line items that I really am committed 8:23 already for mortgage or utilities or groceries and then uh the medium budget. 8:29 So if you um were to kind of add in like something to make it a little bit more 8:34 comfortable but still kind of watching things and then what you would consider 8:38 like a more comfortable budget. look at that on a um kind of a monthly and an 8:44 annual basis and it gives you like a really clear understanding of, you know, 8:49 what what do I need to make and and are these other income streams or these 8:54 levers of of ways that I could start making money outside of my W2 job, could 8:58 that start to cover my core expenses? Um, and it makes it a lot less 9:04 stressful when you're like, well, I don't necessarily have to replace my 9:07 whole income if I want to make a change. I just need to cover my core expenses. I 9:13 certainly see some cases of people talking online of people who are like 9:19 six or seven figures in debt from school loans and high cost of living and 9:23 they're paying really high costs for every piece of their life and the math 9:27 just like doesn't add up and they're sinking. And that's what happens when 9:32 you're not really doing the math where you got to a certain salary and it came 9:36 to a with a lifestyle creep and now you have mortgage and private school and 9:39 cars and debt. And I'm not saying you need to move into a shoe box, but um 9:43 there there are like pretty drastic life resets that people could do for a couple 9:48 of years and get back on track. And I am most certainly not like a personal 9:52 finance guru and I'm not really meaning to go into finance so much, but it is 9:57 something that I see holding people back from building something that like, oh 10:03 well, I couldn't quit my job. Well, that's that's not exactly true. Nobody 10:07 just quits their job and says, well, I wonder what I'm going to do next. You 10:10 actually do a lot of planning on paper. So, understanding your personal 10:15 expenses, understanding personal, you know, ways to make money. if you were to 10:20 reduce your W2 job or or leave it. Um, and and what you can build either on the 10:26 side or if you want to actually like completely dive in. And so I run the
Building a Business Financial Model 10:31 three income bands as well as like here's the worst case, a moderate, and a 10:36 stretch. Like if I only had these core income streams, the ones I'm confident 10:40 will be there, what would I be making? That's the floor. Um, and then if you 10:45 want to increase your assumptions, if you were to add in, you know, speaking 10:49 gigs or expert witness work or more locom shifts, you can map them against 10:55 each other and say, "This is what I could get through. This is a plan of how 10:58 I could get through the next, you know, 6 8 12 months." That was really building 11:03 like a personal financial model. And then on the other side, you build your 11:09 business financial model. So if you're building a startup, you can build a 11:14 financial model before you spend any money. You do this on paper without 11:18 investing in the business yet and you want to start pressure testing all the 11:22 variables. So um and and you can look at different capital pathways. What would 11:27 happen if I raised money? What would happen if I used my own money? What 11:31 would happen if I built a revenue stream early that could start to support me? 11:38 Um, and then how do you actually build founder compensation into the model? 11:43 You're not going to go build this business without taking a salary at some 11:48 point. So, it really has to be in the model. In general, I don't map income to 11:53 myself in planning a new business until that business has like 6 to 12 months of 11:58 operating expenses and then I pay myself because I am self-funding my businesses, 12:03 not raising money. But if you're raising money, you have a different ramp. But 12:07 the discipline is the same. So the founder comp can be put in the model 12:11 from day one and you can kind of have a projection of when you would start being 12:15 able to take a compensation from your concept. And all of this planning you 12:20 can do without spending any money. This is just your brain, your ideas, and your 12:25 time. But you can't skip the math. And I want to flag something about this wall. 12:32 You're um still a W2. did a lot of planning, networking, and modeling while 12:39 I was still working on my W2 job. I think you should definitely check your 12:46 employment agreement cuz some employers claim that anything you make while 12:50 you're employed by them, they can have a stake in it. But what you can do while 12:55 you're still a full-time W2, you can network, you can ideulate, you can build 13:00 a model, you can create a vision, you can think and plan and brainstorm, and 13:04 you can do all of that without spending any money on your business while you're 13:09 still employed. And what comes out of this modeling is a plan that tells you 13:15 what I'm calling like the gates. So the things that you do not pass go until 13:19 they get unlocked. So in our incubator program the first gate is we have um you 13:25 know creating an MVP of a product plus a financial model and once you can improve 13:30 the the unit economics work that unlocks the next gate which is going into more 13:36 the business development marketing messaging and pre-selling. And the great 13:41 thing about being a solo founder these days is that you actually in these early 13:45 stages really don't have to hire contractors. You don't have to spend 13:49 much money. AI has opened up so much for solo founders. So even things like, you 13:55 know, you can make your own logo. It might not be the most beautiful thing in 13:58 the world, but it'll be something to get you started. You can have a marketing 14:01 plan. You can have um all your core product that you can build again as a 14:07 solo entrepreneur with the right tools. Um which is one of the things that I 14:12 work with founders to to develop. And then you can actually get to the 14:16 point where you can pre-ell your product. And this is before launching, 14:22 like before you've even raised money or quit your job. You can create the model, 14:28 the plan, the messaging, pre-ell it, and and then determine based on your capital 14:34 pathways of either early revenue stream or raising money, which it's way easier 14:39 to raise money when you've pre-sold it. then you can have a plan that you're 14:43 easing into. So it's not like I'm going to quit my job, stop making any money 14:48 whatsoever, think about things and figure out what 14:52 the path forward is. No, you you have a very clear plan and you have an 14:56 understanding of if I could find a pathway to start making this amount of 15:00 compensation by this month, then I could dial this down and my backup plan is I'm 15:07 going to make sure I get um credentialed with a couple of clinical sites so that 15:12 I can add that in. Um so, going back to pre-selling, I think that um a lot of 15:17 founders think, how could I possibly sell something that doesn't exist yet? 15:21 It might sound insane, but it's really not. You can pre-ell a model if it's 15:26 solid. And this is what most companies are doing when they have derisked their 15:32 concept. So, you can get like a letter of intent from a desired customer that 15:37 basically says, "As soon as this is ready, we're going to buy it." Um, 15:42 pretty insane. Like, why would someone do that? But it's all related to the 15:46 business development and the way you are building your model and finding those 15:51 aligned incentives. Our first startup, we closed a nine figure contract before
Pre-Selling and Funding Strategies 15:56 we had a single employee. And so I'm telling you that because I want you to 15:59 know it's possible and we will that that's what we focus on a lot in in the 16:03 incubator program. This is how venture builders work. We build a model. We 16:09 derisk it. We pre-ell it. We figure out what the unit economics are and then you 16:15 fund it and the funding pathways are much more broad and wide open when you 16:21 have that sort of a foundation. Once you have the evidence, you have real options 16:27 on the capital. You can self-fund. So I have self-funded most of my recent 16:31 businesses. You can partner with someone who has capital and operations and give 16:36 them equity. You can raise an angel round or venture funding. And most of 16:41 the time people that work in venture have done this hundreds of times. None 16:44 of these is the right answer for everyone, but they're real options on a 16:47 menu. And so my vision is to help physicians 16:52 see the light that when they have a vision of a clinical model or something 16:57 that could make life better for their patients, that you do not have to walk 17:02 away from your job that instant and and jump off a cliff and be like, "Oh, I 17:06 hope this works out." you can actually create an exit strategy from your core 17:11 job into this entrepreneurial world with real consideration for your personal 17:16 finances and for the business finances. And and you can actually this is a 17:21 replicable process. And the funny thing is the reason why most founders who 17:26 successfully scale a company then go on to build a bunch more companies is 17:30 because it's a formula. And so most people never get to these options 17:35 because they haven't done this before. And I I think that that's one of my 17:39 visions with working with physicians is how I can bring this sort of model and 17:46 idea and and pathway to doctors with really good ideas. I think patients need 17:52 us to be innovative and to be leading the way with health tech. So I really 17:57 want to bring this all back together. I know sometimes we feel that just putting 18:01 your head down and staying at a W2 job even if it's um you know not aligned 18:08 with your passion or what you want to do might feel a lot less risky but I just 18:13 wanted to walk through why that's a little bit backwards. Um it you know you 18:17 can take calculated risk, you can take really wellplanned risk. I don't take 18:23 risks that are really uneven or or unlikely to result in in safety for me 18:28 and my family. I plan things really carefully and then I am able to 18:32 visualize it so clearly like oh well these four things have to happen for 18:38 this next thing to open up and and that would be a decision point to quit the 18:43 job or cut back or something like that. um you have more income levers than you 18:48 think. A and a lot of us who are over on the entrepreneurial side will have like 18:53 a number of different income streams um because it's diversified and in some 18:59 ways that's actually probably better than just relying on one W2 job. And 19:04 every one of these is a lever you can dial up or down. More levers, more 19:09 diversification, and that actually can be less risk. And then your personal 19:14 financial model is your foundation of understanding what's sort of the bare 19:18 bones of what you need to get by for you and your family. What's like the medium 19:23 or the comfortable zone. Those are three different expense bands. And then you 19:29 want to map your potential income bands. And then you can kind of understand 19:33 exactly what you can weather. Your business model that you're going to 19:36 build has your founder compensation built in from day one with the different 19:40 scenarios whether you self-fund partner angel venture and it's really a menu. 19:45 You derisk all of this on paper. So that's what I really like to emphasize 19:50 is that it doesn't really cost a lot of capital to be planning pre-ell before 19:58 you go investing and building this million-doll product. You want to make 20:01 sure someone's going to buy it. and you don't pass go until the math works. 20:06 So, if you've mapped all your levers, if you have a diversified plan, it's so 20:10 much less risky because honestly, even with your one W2 job, it's that's just 20:16 one source of income. So, if you can actually learn this skill of how to 20:21 manage your personal and your business finances to create what you want to 20:26 create, it's actually like doesn't feel like that big of a leap. I mean, I have 20:32 a lot of levers that I use for locoms work, PRN work. I do expert witness 20:37 stuff, speaking. I have my educational programs. I know personally which of my 20:42 expenses are required and which ones are kind of optional. And I'm pretty loose 20:47 about what I consider optional. A lot of things in my life that I feel like I 20:51 could just cancel tomorrow and it'd be fine. So, the more you know about your 20:55 personal numbers, both sides, the less that the leap looks like a leap. And the 21:01 math doesn't really feel like it maths when you haven't done it. It just feels 21:05 like this big black hole of like scary stuff like not having a paycheck. But 21:12 you can make the math work if you know the strategies. It does not have to be a 21:17 massive risk. There are ways to engineer it. I even think about like previous 21:21 podcast guests that I've had who didn't even mean to start a company. They kind 21:25 of like started it as a side thing that they were just building a tool for their
Creating a Pathway to Entrepreneurship 21:29 own practice and then it started to get some momentum and interest and then they 21:33 started to build a business model around it. Like there are ways that people I've 21:37 seen start to build something that you know they were able to start to see a 21:44 revenue stream coming out of this idea and they waited until that materialized 21:50 to turn down their FTE. You build your personal model, you build your business 21:54 model, and then you map your levers and you find your gates. Like, don't pass go 21:58 until the math works. So, that's what we do in the incubator. Um, that's what I 22:03 did when I left my multiple W2 jobs that I left to do something else and to build 22:09 on my own. In most of those cases, I uh never had to go without a salary um 22:14 because it was all planned. And you don't have to either. So, if you want to 22:20 learn more about this, if you have an idea of something that you would like to 22:23 build, but it's always been holding you back because it feels just completely 22:27 out of reach. I I hear people say that um with, you know, sometimes commenting 22:32 on things that I say like, "Oh, really wish I could do that, but I'm just not 22:37 in a position that I could do that." Well, you're not because you haven't 22:40 planned it. Yeah. And you don't have the road map. So, if you want to take this 22:44 further, um, I would suggest you download our initial founder resource 22:49 guide. The link is in the show notes and it's at startupf 22:54 physicians.com/resources. It's the most direct thing you can do 22:58 with what we covered today. So, we don't cover personal finances in that road 23:03 map, but it will give you a good idea of like what does it take to become a 23:08 founder and how much of that could you do while you're still working. We are 23:12 often very tied to our beliefs about what our lives have to be. Um, some of 23:19 these are through conditioning, some of these are um because of fear. 23:25 But the more we can untether ourselves from some of these beliefs, the more we 23:30 just create this very open opportunity to um to really create the 23:36 life that we want. So, for those of you who are interested in becoming founders, 23:41 I highly recommend you download the guide. Do your exercise with mapping out 23:46 the the opportunities for both where your expenses and income are right now. 23:52 Um, and kind of what I call the minimum viable product. Like you want to just 23:56 really understand what would it take for me to be able to like break free from 24:00 this more traditional environment. So, I know that I have had a very 24:06 non-traditional career. Other people have found that interesting, and I 24:10 wanted to share a little bit about my insight on how you too can look for 24:16 different ways to to make your income while you're creating [music] the health 24:20 care system of the future. So, thanks for joining me. Thanks for listening to
Overcoming Fear in Entrepreneurship 24:24 the Startup Physicians podcast. [music] This community was built for doctors who 24:28 want to contribute to the future of healthcare. [music] We offer support for 24:32 physicians who are ready to make the next step towards building the career 24:35 they've [music] dreamed of. Visit startupphysicians.com 24:40 to learn more. And if this episode resonated with you, [music] share it 24:44 with another friend who needs to hear it. Let's change the future of 24:47 healthcare together.
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