Bringing Wall Street to Main Street
They're young, talented and well-funded--but how are these former financiers faring as entrepreneurs?
Lauren Imparato, 28, has always worked long hours, a standard during her employment at Morgan Stanley, moving million-dollar deals and jetting around the world to set up business operations in cities like London and Istanbul.
Good thing, too. It's helped ease the transition into her new career as an entrepreneur. In April, she resigned from the financial services firm to be founder and owner of I.AM.YOU. studio in New York City. The studio mixes an intense workout with a "kicking" music soundtrack, a combination Imparato never encountered in the many yoga classes she attended--and something she thinks can evolve into a global lifestyle brand over the next few years.
She doesn't regret leaving Wall Street behind, though the learning curve has been treacherous at times. "I'm actually busier now than before," she says. "I have to juggle a thousand different contacts in different industries I've never met, without knowing their protocol or how they operate."
But Imparato's banking experience has helped her do more than cope with long work days. She built a strong foundation for her business by going through the right channels, and makes it a point to operate at maximum efficiency. Better still, spreadsheets are her bread and butter.
In fact, Imparato used her personal savings to fund all launch costs, and returns have exceeded even her own expectations. "We've blown past my revenue projections," she says. "Our classes sold out so we had to add more, and in the first month, I expected to be 50 percent lower than we were."
What's interesting is that Imparato originally intended to run I.Am.You as a side business. "But all I could think about was the development of this," she says, "and that's when it became clear I had to resign to give it 100 percent--and I went all in."
Her advice to up-and-coming entrepreneurs? Learn as much as you can. "Soak up everything all around all the time," she says. "Every single experience I've had has come into play, getting this thing off and running the way it is." Keeping an open mind is equally important. "Even if you didn't always know it was your dream and it kind of falls in your lap, you've got to follow it."
On the Road to Happiness
Shu Kim, 40, and Khanh Pham, 33, would definitely agree with Imparato. The two met at Lehman Brothers--Kim did law, Pham finance--nearly seven years ago, but were laid off in the spring. In late May, the pair launched Shustir, an online marketplace that offers small-business owners an easy-to-use social media platform to improve sales and expand their networks. (Random fact: Imparato met Pham on a yoga trip and now has a business listing up on Shustir.)
"If everything was status quo, chances are Khanh and I would still have been [at Lehman], discussing the subject of starting a company, like we'd been doing since January 2008," Kim says. However, with layoffs came the opportunity to concentrate on Plan B. Their new start hasn't come without sacrifice (i.e. their equity and savings), but both seem satisfied. "We couldn't have made it to this point, this quickly, without our decision to focus on it," asserts Kim.
They're happy, too, because Shustir can make a difference for other entrepreneurs. "Small and local businesses will be a big part of the recovery," Pham says, "and Shustir can help them." Kim agrees, adding, "We wanted to give back to the community, leverage our understanding of finance--every aspect of what we learned at Lehman--and put it into something we believe in."
That understanding of finance has contributed to a lot of progress in a few short months: They nabbed funding from an angel investor in an extremely tough market, and have promoted Shustir smartly and effectively. According to Pham, growth is steady, and hopefully by fall, there will be enough storefronts and customers to move to the next level.
Shustir helped Kim and Pham reinvent themselves, so as slippery as success is, they're all about the silver lining. Kim trusts that when the people look back in a decade, they'll see a long roster of great companies founded during this recession. "I think.the spark of creativity and ingenuity begins when you're forced to re-think what you want to do."
And, adds Pham, taking the chance to become an entrepreneur means you can focus on what really makes you happy. "We definitely feel a sense of camaraderie with others who are turning this situation around to work for us."
Mapping New Terrain
If that's the case, they'll be rooting for Dustin Dolginow, 26, who was laid off from Lehman last fall. Rather than looking for another job, he's starting his own business. His vision: Graffitto, a site that pulls information from credit card statements and allows users to share their thoughts on places they've visited--like a Google map controlled by a timeline, he explains, with areas to input trip information and merchant recommendations.
Dolginow's still building the site with his web developer, but a few years working on "the Street" gives him an edge over the average early-stage entrepreneur. First, there's his network. "I've been the lucky recipient of advice from many friends who've started ventures," he says. There's also a respectable pool of money. Although the crisis derailed his original plan to save for a while more before striking out on his own, he's still managed to buy himself two years to build up Graffito.
Plus, he has an understanding of cash flow and credit cards that's enabled him to seize on what he believes is a great business opportunity. And of course, he's used to working 80 to 90 hours a week. "I have done it before, and I'm more excited I'll be doing this for my own business," Dolginow says, laughing.
Still, he anticipates major hurdles ahead. "I'm the first to admit that ideas can float or flop--that's what it means to be a startup--and I don't know how people will react to the idea of opening up their credit card statements," he says. "And other people think it's a good idea, but want to know where revenue will come from."
Besides, Dolginow already knows the pain of trying to find talent willing to put up with startup headaches. "I guess good back-end programmers in New York City are in high demand, unlike bankers," he quips.
There is, however, a tip he can share with other entrepreneurs just starting out: "Whatever your industry, do your homework," Dolginow says. "You don't want to look like an idiot and come into it thinking and acting like it's cake. It's great, but every day I'm realizing how much harder it is than I originally thought."
One thing seems certain, though. With so many Wall Street pros becoming entrepreneurs, the future of Main Street looks bright indeed.