By Jay M. Jaffe
The Entrepreneurial & Innovation Section hosted a virtual town hall meeting in June (2017) featuring Patrick McGinnis, author of The 10% Entrepreneur. The book is an excellent reference guide for any actuary interested in becoming an entrepreneur. During the meeting, McGinnis offered advice about becoming an entrepreneur. One aspect of entrepreneurship that was not emphasized was passion. The word passion comes from the Greek and means to suffer. Passion is an intense emotion, a compelling enthusiasm or desire for something.
Passion increases the chances of success for a variety of reasons. First, if you are not passionate about becoming an entrepreneur, you’ll waver in your commitment to your project. Without a strong reason to become an entrepreneur you will become frightened in the face of adversity. Second, most new ventures fail. People without passion for an entrepreneurial project are more likely to “throw in the towel” earlier than they should when the project does not turn out to be an instant success. Keeping the focus can become the difference between success and an expensive experiment. Success can come in the second, third, or even the fourth iteration of an idea, or it might be generated by a concept that was tried and failed. Third, passion is contagious. A leader who isn’t passionate about what he or she is doing will unwittingly transmit lack of commitment to employees, investors and users of the product. It is a cliché, but a useful one, that entrepreneurship is “a labor of love.” Colleagues will find your passion infectious; they are more likely to follow you during times of adversity or when you’re at a tipping point. Fourth, sometimes passion can be born out of adversity. For example, if you want to prove something to yourself, passion could very well be the driving force. Or, if your personal life changes, the new circumstances could ignite a new passion. Being passionate about something increases the sense of self-worth, strengthens your community and is a catalyst for financial reward.
During the town hall meeting there was a question about whether actuaries have the personality to be entrepreneurs because they are analytical and aim at selecting the best among several choices. But when it comes to a career change, it is appropriate to be passionate (not just analytical and risk averse) because passion is a required ingredient for success.
Here are a few thoughts on passion for any actuary seeking to become an entrepreneur:
- Why do you want to become an entrepreneur? If passion is not part of your response, stop and re-consider your options. One of them is to find a job that suits your needs. Certainly, you’ll perform better if you are motivated;
- Think about how you can create a passion. Being around entrepreneurs and creative people can help you gain confidence. Consider enrolling in an MBA program or attending meetings where the themes are innovation, entrepreneurship or something similar;
- If you have a passion figure out whether it is at the appropriate area. As McGinnis pointed out, you can invest too much of yourself (in terms of time and money), and end up at a dead end. In these situations your passion creates stress and becomes a negative force. In other words, assess whether the environment in which you’ll operate as an entrepreneur suits your personality, risk tolerance and temperament;
- Don’t forget your family. Passion is usually a family affair. If your spouse and children don’t share your passion, you could end up jumping into an environment that quickly becomes stressful and toxic. Engage everyone in your household in your thought process, particularly if you’re going to take a big leap from a secure position to a risky one;
- Passion includes a willingness to make sacrifices. If you’re transitioning from a job to being self-employed, you may have to work two jobs until your company becomes established. Sacrifice can require a big commitment for you and your family, but it may be the only way to achieve your goals;
- Being an entrepreneur requires the ability to change directions quickly and often. While it may be easy to be passionate about your first venture, you also have to find ways to continually renew your passion even when things have gone well because yesterday’s success doesn’t guarantee a bright future.
Actuaries often ask me how have I been able to sustain my lengthy career as a self-employed consulting actuary? The answer is that passion got me excited at the beginning and kept me motivated during down periods. I was motivated by two conditions to open up my own consulting business. First, the desire to provide for my family while having the flexibility to spend time with my children. Second, while I enjoyed actuarial work, I wanted to serve my clients more creatively. I was excited by new ways to market insurance. By virtue of being self-employed I was able to find opportunities where my marketing interests and skills were employed and compensated. My non-traditional interests eventually led me to be more innovative in my work and to becoming part owner of some of the programs I helped develop.
As I think back on the events that shaped my career, it is now easy to see that not only was I lucky when I made decisions about my future, but that the career and job changes were aligned with my passions. Passion is a key ingredient to become a successful entrepreneur or innovator, but you can only find it within yourself. The search for passion may turn out to be as rewarding and enjoyable as the financial gains that result from becoming a successful entrepreneur or innovator. Happy searching!
Jay M. Jaffe, FSA, MAAA, MS, is president of Actuarial Enterprises, Ltd. He can be reached at +1-312-397-0099 and firstname.lastname@example.org.