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Transition to the Private Sector, Part II
How to Look Before You Leap
Action: A) If you’re an A-player, stay. B) If you’re an A-player and leave, do great things on the outside and return to government service at some point. C) Send me your transition questions and let me know if you’re interested in a seminar on the below topics.
At least a few times a month, people looking to jump ask about my transition, which has led to me consolidating my comments below. To be up front, some of what I write will be controversial and all of it is biased. This is Part II of III.
• Part I addressed the basics of how & where there are differences between the Agency and the private sector, an assumption of what aspects of government you’ll miss based on my own nostalgia, as well as how to characterize old skills to new roles, job hunting advice, and resume missteps.
• Part II, below, addresses criteria for choosing your next role, the most common types of business roles that formers go into, and how to think about big vs small company risks and current markets.
• Part III will be about title and compensation (salary + equity + bonuses) and resources you can use.
1. I’m planning to leave within the next year, what should I be thinking about?
What’s your why?: First, understand your why. If you’re resigning mid-career, why is that? Not the superficial answer, but the real answer. As the quote by author and physicist Richard Feynman goes, “The first principle is that you must not fool yourself, and you are the easiest person to fool.” There is an aura you get working in the intelligence community, partially because of the mission and partially because of exclusivity. You may not have your college roommate’s finance job pulling in a high salary with bonuses, but you have something far harder to obtain, an affiliation with a cadre that’s so elite, it’s secret. We all seek belonging with an in-group and you’ll be leaving yours. For me, it felt like leaving a major part of my identity behind. This can be jarring and you really need to dig to identify what you’re walking away from and what you want to be walking toward. Knowing your why will help you make peace with the identity shift that is going to happen. I also suggest finding something you can strive for on the outside that is adjacent to the sentiment that pulled you into public service.
My own why: The future of national security is in technology, and I wanted to learn about emerging tech and capital markets so I could go back into government at the intersection of national security & technology policy better equipped and networked. The only way we’re going to secure our future is for the government and private sector to leverage each other’s strengths and mitigate each other’s weaknesses. Our government has a dangerous speed to market problem that bureaucrats alone cannot fix, even the best of them who usually start well-intentioned but become risk averse and ossified over time, not wanting to jeopardize their standing and sadly becoming what they set out to change. Tradition needs to be challenged from the inside, and one of the few ways to address this, aside from greater accountability, is to create an ethical revolving door between government and industry to serve as a refresh button against stagnation and risk aversion, with strong incentives led by the government. But that’s a post for another day.
How much time do you have? You’ll need to network with as many people as possible and ask them about their careers, ambitions, let downs, and get a sense of what they do all day and how they find meaning from it. Conservatively, I met around 40-60 individuals across various companies for one-on-ones before I left. There was a huge overhead to this and your timeline for leaving will dictate how much groundwork you can do. In all cases, it will be a balance of the time cost of gathering more information vs the benefits of making the leap more quickly. It took me about eight months. Reaching out to formers who can help with introductions and suggestions will help you exponentially.
For each of the industry verticals, I spent weeks to months researching the technology, reading forecasts for various companies and many related books, then hours that could be measured in days scrolling LinkedIn and Google sleuthing to find the best POCs to contact. For first contact emails or messages on LinkedIn, I spent at least 15 minutes tailoring each one for the best response or impression, then at least 30 minutes to an hour researching the person in advance of a call/meeting, 30 minutes to an hour with them, and then at least 15 minutes writing a thank you or follow-up email. Some meetings were in-person so add in transit time. When you work in the building you might as well be marooned on a desert island; you either have to take time off work or find someone who’s willing to talk with you early morning or evenings, as well as do all the research work early mornings, nights, and weekends. It’s daunting but you can do it. Much like good target selection is the key to good recruiting, zero in on the contacts most likely to talk with you based on their online engagement (do they post and correspond a lot with others on LinkedIn or Twitter?), or someone who is already a friend of a friend.
Where you’re (likely) limited: Your government-only experience has hindered your world view. Yes, you, world traveler who has seen and done things most people cannot imagine. You likely don’t have a good understanding of budgets, finance, and capital markets. Yes, you may have managed budgets before, even large ones, but budgets aren’t that hard when it’s taxpayer money. If you don’t meet your revenue numbers in industry, you either have to raise more money or you have to make cuts elsewhere. The first rule of startups is not to run out of cash. Many do and it’s lights out for the entire company and layoffs for people with families. Not exactly imprisonment or death, but still very consequential to people you care about.
There is a lot to learn on the outside. Some of the biggest failures are those who come out of a government-only career, especially at senior levels, with a sense of entitlement. Yes, you navigated bureaucracy well and probably pulled off some major coups in your time (not in that sense), but your war stories will only be good the first two times and perhaps over beers. What got you here won’t necessarily get you there. Take heed not to let your confidence dwarf your knowledge, because you can mistake self-belief with self-delusion. Adjust accordingly by combining a beginner’s mind with your ability to navigate stakeholders & equities and you’ll do well.
Big or small?: Decide if you want to join a big or small company. Choose big for stability and higher salaries. Choose small for learning, growth, and impact. In large companies, they usually want to put you in a narrow and specific role. Though you will have more roles you could move into if the first one isn’t a great fit. At small companies, you wear many hats all at once. I wanted to understand the daily challenges a company faced at the senior levels in trying to push a new technology in government markets, commercial markets, and how capital flows impacted all of this. In order to get these levels of insights and learning, I needed access to the source of where those decisions were made, which meant I had to go small. However, a bigger company is more defined in terms of a 9-to-5. I work just as much now as I did in the field. And though I work from an office most days, I also work from home, which affords a lot of flexibility because I’m not chained to a SCIF.
If you join a big company, assuming it’s public, you’ll get stock which immediately can translate into financial gains assuming the company performs well. The salaries are almost always higher. You can get rich in a big company (at least by our humble government standards), but rarely wealthy based on returns from that company alone. You can get wealthy with the right startup, but many startups fail, so it’s a long-shot. Of course, “wealth” is subjective. More than money, most of us crave impact. Both are possible on the outside.
What would you like to do? Some roles for former C/Os:
• Business Development or “BD” roles: When you describe what a C/O does, most larger companies will see that as a sales or business development function. You’re out shaping the perception of your company in the market (networking), determining leads, and making contact with leads. The larger the company, the more they’ll separate out BD and sales, with BD focused primarily on lead generation and sales focused on sealing the actual sale of the product or service.
• Sales roles: The sales cycle is similar to the recruitment cycle. At a small company, you have the ability to do the whole cycle, which pulls in strategy, BD, sales, and customer success: figure out what you should sell, who you should sell it to, how to get in touch with them, actually get in touch with them, sell it, keep selling to them and make sure they’re happy (customer success), and at some point, decide whether to move on to better sales targets, or convince your company they need to be selling something different. At a large company, sales usually means someone else has done the broad shaping for a potential customer, you just have to go in and work through the mechanics of selling them on your product or service.
• Customer Success roles: This is handling. You make sure the customer is happy and keeps buying, preferably more.
• Security roles: Some people from the Agency gravitate to security roles, and I’m sure some are quite relevant. An issue I found is that while I may know a lot about tradecraft-related security and how to hopefully stay alive for the first couple minutes of an ambush, I know very little about things like building security and computer systems security. Some companies will see a CIA background and confuse it with roles that are more akin to FBI or law enforcement. You can probably learn it and integrate well into those teams, especially if you worked in an actual cybersecurity or security role. I was turned off after someone told me, “If you’re the Chief Security Officer, you’re the last person the CEO wants to hear from.” I imagine that’s controversial and I welcome feedback from those in the security realm.
• Trust & Safety roles and Threat Intelligence roles: These seem especially appropriate for targeters and analysts. I know a lot of formers who have joined companies in this capacity and seem to be doing well. This includes business intelligence. The role broadly is to protect a company and its people/users, or provide a service to other companies doing so by tracking bad actors & threats. Sometimes these roll up under a security division, though for many companies, this is the entire company.
• Government Affairs/Legislative Affairs roles: These are lobbyists who engage with policymakers on a company’s behalf. The larger the company, the more they’re paying to have people represent them on Capitol Hill and advocate for their interests. For those with significant experience engaging with and briefing the Hill, this is a possibility, but that probably means you’re more senior, and you’ll be competing against staffers rotating off committees who are actually much better equipped than you as far as networking and know-how. Many start-ups can’t afford a full-time government affairs person, or a very senior hire, so they pay a lobbying firm at first. You may be able to step in once they want to transition into a salaried role for this, but keep in mind that they’re looking for the Hill contacts that you already have, as well as your ability to work the legislative process, not just your briefing or networking skills. Saying you’ve briefed CODELs likely won’t cut it. You may be able to join a larger company’s government affairs team at a more junior to mid-level, and you’ll probably find your skills most relevant to a company that works on national security-related issues.
• Strategy & Operations roles: These roles help make sure vision, resources (budgets), and the market opportunity are aligned. They help figure out what to do to make things go right, and what to do when things go wrong, and usually work closely with the CEO or CFO. The smaller the company, the bigger your chance at a role like this. Larger companies primarily only look for someone who has an MBA, experience with one of the big consulting firms, or experience doing the job already, which creates the chicken and egg challenge. There are some business operations roles, which can be a more entry level. Ultimately, one could work their way up to potentially a COO or even CEO role, but this will vary widely at different companies and industry verticals. A Chief of Staff role, for example, is largely a strategy role, but is heavily dependent on what the CEO/company needs and wants. I’m the person who tells our CEO what he needs to hear, not necessarily what he wants to hear, and serve as an executive advisor from product strategy to setting business milestones to working with investors. I also work closely with all members of the executive team, the Board of Directors, and Advisory Board. I think it’s ideal for a former C/O, but I’m obviously biased.
• Entrepreneur: A successful CIA officer must be able to operate amid ambiguity and make judgment calls that require strong second and third order thinking. Achievement focused and good storytellers, they know how to figure things out, “read the room,” and assess & mitigate risk. Most people believe C/Os and entrepreneurs are big risk takers, when, in fact, they’re more risk mitigators. If you find an A-player CIA officer jumping into a founder role at a mid-way point in their career, stay close to them, they’ll probably go on to do great things. They’re the equivalent of someone who drops out of Harvard business school to found a company. They have enough confidence in themselves to leave without the safety net of a future pension as well as the energy, ambition, and know-how to navigate uncertainty. The same EQ and approach that attracts investors will also attract excellent employees.
• Venture Capitalist: An early-stage VC is almost the exact same job as a C/O. Spot, assess, develop, recruit, and handle founders building a company amid an uncertain operating environment that will bring a heavy return on investment (ROI). Just as CIA is the highest-status intelligence organization in the world, the more prominent you are as a VC, the more inbound you get (volunteers), yet outbound (targeting, developing) still matters. Both involve some levels of luck and timing misattributed to skill. The biggest difference is in the VC world, nobody is going to die. Much like many C/Os, VCs guard their cadre as an exclusive club.
• Retirees: Leaving with your full pension means you’re likely going to fall into working in four general areas if you choose to keep working. This all depends on your seniority and the level of outward facing roles you had. It’s no surprise that some officers work hard to get public-facing roles that relate to technology or other posts that benefit their post-Agency job search. CIA needs reform here, and not in the way most people think.
2) sit on a company Advisory Board or Board of Directors
3) serve as an executive at a small company (you’ll be expected to actually work, not pontificate & delegate) or mid-to senior level at a larger company (you might just be a face)
4) get hired by Wall Street/Private Equity/VC firms assuming you’re senior enough and have enough New York or Silicon Valley connections
For 2-4, you’re generally being hired for your name and the introductions you can make assuming you’re within the top 15 of leadership.
Boards: People sometimes ask the difference between an Advisory Board vs Board of Directors. An Advisory Board, you guessed it, provides advice. Depending on the agreement, the company formally meets with its Advisory Board anywhere from once a quarter to once a year. Advisory Board members individually field weekly to monthly emails and calls from the company executive team to provide feedback on strategy & positioning and make introductions. Advisory Board members are often paid in a balance of equity (stock options) and cash (“cash” is the industry term for money wired to your bank account). A Board of Directors (BoD) is more formal and provides governance and financial oversight to the company. They can vote to hire and fire the CEO. CEOs seek their consultation (and often must seek their formal approval) for major strategic decisions such as acquisitions, major budget changes, hiring of C-level executives, etc. Formal BoD positions are harder to come by. If you’re an A-player from the senior-most ranks, I urge you to consider joining a private company board if you’re aligned with their mission and team. They need you.
For me, personally: People at startup companies in the senior ranks usually call themselves operators. Obviously, that’s a different definition of the term. I knew I wanted to stay/go into an operator role because that’s where the business learning I sought would happen. I didn’t want to turn around and have to sell back into the IC, because I didn’t want to leverage my contacts so tactically, but plenty of people do it (and we need good people to do it, we all know how badly the government needs commercial technology solutions). From the start, my job was closest to a BD role. Because it was a small company and I was going from top-down with the CEO rather than responding to a job advertisement, I was able to craft my function and initial title as, “Senior Director of National Security Solutions.” I began writing unsolicited strategy docs for the CEO, which ultimately led me into a strategy role, which led me into a strategy & fundraising role. I also took an advisory role with another startup working on national security technology, QuSecure.
2. How should I think about risk and how can I mitigate it if joining a startup?
If you decide to join a startup, know your appetite for risk. If you’re really bold, join an early-stage company (seed stage, Series A), but have conviction around the team. You may need to cover some portion of your own salary for a year. If you need to make a salary equivalent to what you make in government, target startups that have closed a Series B round within the last few months. If you’ve received a formal offer from a startup, you should offer to sign an NDA and ask how much runway they have. If they won’t sign an NDA and discuss any aspects of runway or value of the equity package they’re offering, look elsewhere. If there is enough interest, I can do a separate post that discusses funding rounds (pre-seed, seed, Series A, B, C, etc) and runway and why this matters, as well as what is considered “an exit” for a startup.
Look before you leap. Talk with multiple employees at the company. Try to talk with an investor in the company. Research their Board of Directors and Advisory Board members and contact some of them. Look for people on LinkedIn who used to work at the company and reach out to them and ask why they left.
A year of employment is enough to “prove” that you can hack it in industry, even if the startup fails. Being part of a “failed” startup is not the badge of dishonor you might think. Many startups fail, especially those in the early stages, and it’s more about the quality of the startup and what you did and learned. So long as you and the company weren’t pulling an Elizabeth Holmes or otherwise operating unethically and illegally, it’s not necessarily a red flag on your resume. This sort of experience matters far more to a prospective tech startup employer than the decade+ that you put in at the Agency.
After the six month to a year mark, if you’re in a sufficiently senior or in a unique role (or have a technical degree), you may begin fielding inbound soft recruitment attempts from other startups. This will increase with added time, responsibility, and the prominence of your company.
3. Should I be worried about the current job market right now? I hear it’s bad.
Yes, it’s bad, especially for tech. You’ll no doubt have heard about layoffs throughout industry. We are in a time of high inflation, which has led to high interest rates. This essentially means that it “costs more” to borrow money now. In the last decade, money was essentially “free.” Startups could borrow and spend (and pay salaries) with no need to turn a profit because they could chase growth over profits, yet still go public and cash out some of their stock and become wealthy. Investors funded these companies so long as they had strong narrative leverage. This is no longer the case. A common way to extend runway or increase shareholder returns is to cut entire programs to cut expenditures and conduct layoffs that cut labor costs, which is what we’re seeing.
Do firm due diligence on where you land. You don’t want to jump and then because you’re the new person, be first in line in the next wave of near-term layoffs, or find out that the company only has a few months of runway and they can’t raise their next round. Economic recovery may not happen until late 2024 or later, so always have a plan B and C brewing.