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