As an entrepreneur, I occasionally get to rub shoulders with the financial elite of this country, extraordinarily wealthy men (and a few women) who, in many cases, have lived with wealth since the day they were born. Occasionally the subject of the past comes up, and I enjoy observing their reactions when I tell them that for 5 years in the late 1980s and early ’90s I lived in poverty in Redwood City, California. Before they get too nervous, I explain: I was a graduate student.
Almost all scientists (with a few conspicuous exceptions), no matter how successful and famous, started off the same way you did: They were poor for a while. Graduate school has offered low pay and long hours since Copernicus passed his quals. When I was in graduate school, I earned $1025/month. If I had been married with two children, and if I was the sole income earner, as some of my classmates were, I would have qualified for food stamps.
Living on $1025 a month in the San Francisco Bay area was not easy. I lived in a not-so-good part of town. I did my laundry in the Laundromat beside the railroad tracks. For nearly a year, I didn’t own a car–unthinkable in California–and rode my bike the 7 miles (11 km) to and from campus each day. I shopped at the local discount food store (where dented cans were marked down 25%) and I, like every other graduate student I knew, developed a sixth sense for knowing when the dean’s office had leftover hors d’oeuvres after a reception.
The ability to live cheaply remains one of the most important skills I developed in graduate school. Although I have long since graduated from the supermarket’s dented-food bin, the many lessons I learned being “poor” have served me well as an entrepreneur. (The quotation marks around “poor,” by the way, are intended to signal an awareness that poverty is relative and that even during grad school we live very well by the standards of much of humanity.)
Entrepreneurship, either the capital “E” type or the small “e” type, is risky by definition, and some of the risks are financial. Many people unfamiliar with early-stage companies assume that entrepreneurs have to put their life savings on the line. This rarely happens, but nearly all have to self-finance the venture at some point. And leaving a scientific career to start a venture may result in little or no pay, at least for a while, and the necessity of finding a new job if the venture doesn’t work out. That’s real financial risk.
Learning how to survive as a graduate student gives you a tremendous advantage in an early-stage entrepreneurial venture.
On the personal front, years of poverty have taught you how to be extremely resourceful, making the most out of a meager stipend. You know that in a pinch, you can make do with a lot less, at least for a while. You know that discretionary spending can be dialed way back and that you can substitute expensive lifestyle choices (such as that annual ski trip to Tahoe) with something cheaper (such as a camping trip in the Adirondacks).
In graduate school, you also learned to be productive with a meager amount of grant money. I was in a relatively well-funded research group, and we still economized and pinched pennies like crazy. We not only cannibalized any and all broken pieces of equipment but also mastered shopping for bargains and secondhand items.
Because money is tight, graduate students often have to take on a range of responsibilities beyond bench research. My officemate was our group’s IT systems administrator, and another member of our group was the designated go-to-gal for repairing and servicing our metrology equipment. Some (although sadly not all) advisers engage their graduate students in preparing research proposals and managing lab activities. These “opportunities” can sometimes seem like an added burden on top of an already full schedule, but students who end up having to do it all also end up learning how to do it all. Doing it all is a valuable skill.
That sort of resourcefulness is very valuable in the early stages of a high-tech venture. Investors who buy into an early-stage technology company demand a high premium. It is not uncommon for a start-up backed by venture capital to sell more than 1/3 of the total equity in the company in the first round of financing (and more–much more–in later stages). Every dollar you save at this stage preserves your equity in the venture–and that means more money for you once the venture succeeds (not to mention more control over the venture’s fate).
Of course, doing things cheaply isn’t always a good idea. It is possible to be penny-wise, pound-foolish, and it’s possible for grad-school poverty to reinforce this tendency. Time is as much your enemy in an early-stage venture as expenditures. The fear of burning through all your cash too quickly can cause you to proceed too slowly. Knowing when to economize and when to pour on the resources in an early-stage venture is challenging and often comes only with experience. This is why having good advisers–in graduate school and once you’ve become an entrepreneur–can be so valuable.
Your classmates from college who went on to careers in management consulting, investment banking, or law never experienced the challenges you have. Most of them have long since become reliant on secretaries, nice offices, and abundant support structures. They don’t do their own programming, they don’t make their own PowerPoint slides, and they certainly don’t know the 1000-and-one recipes for Top Ramen that you perfected while a grad student. And, because they are used to earning a good salary, they have larger financial needs. For them, a period of substantially reduced pay would be unfathomable.
I mentioned small-e entrepreneurship. Your ability to live on the cheap can be a source of courage for all kinds of positive risk-taking. You can face career change with fortitude when you know that you can be financially resourceful during the period of transition. You can entertain all sorts of interesting career moves, including some that require internships or fellowships, most of which pay less than a normal professional job.
And keep in mind that there are lots of important problems in the world begging for smart, resourceful people like you. Often the jobs that have the most direct impact on the most important problems don’t pay much, at least at first. Sometimes the best opportunities to have an impact pay nothing at all–such as mentoring a child, volunteering for an organization, or campaigning for civic change. If you are dependent on a high income to keep your life in order, your opportunities to take such low-paying “risks” diminish. So what good is all that income in the first place if it just ties you down?
If you’re like me, the greatest lesson your years of grad-school poverty taught you is that once you get past the basics like simple food and shelter, professional and personal happiness have little to do with money. When I look back on my years in graduate school, the financial penury my fellow students and I lived in barely registers as an issue. Instead, I remember the camaraderie of my classmates, the many adventures we had on and off campus, and the excitement I felt as my research took shape and I published my first papers. Nearly all the things we did for fun were free. And although I certainly hope one or more of my entrepreneurial ventures becomes successful, graduate school taught me to be motivated not by money but by the desire to make an impact on the world.