In October, when Adam Herscher posted an in-depth essay about why he decided to leave his $255,000-a-year job at Microsoft to start his own software company, he was aiming to tap into Seattle's start-up community to build his network. He didn't expect the overwhelming number of comments from corporate workers around the country, asking for advice.
"It clearly resonated with lots of folks in corporate America who were apparently feeling something similar," said Herscher, who incorporated HasMetrics, a firm that makes customer-service evaluation software, over the summer. "It's a topic that they must have on their minds, this trade-off of having financial security vs. happiness [by] filling some greater sense of what they want to accomplish."
Disillusioned with corporate life, determined to take charge of their own destiny or confident their idea will change the world—the reasons why people leave the cushy confines of a corporate job to become a start-up owner are legion. Here are six lessons from young tech executives who left the salaried life behind.
1. The numbers are not on your side.
Launching a start-up isn't for the faint of heart. According to the Bureau of Labor Statistics, only half of businesses survive five years or more, and roughly one-third survive beyond 10 years.
But battling these odds doesn't seem so unusual for the recently graduated 20-something entrepreneurs that Silicon Valley investors prefer to back. Still, it's a big transition for workers who have risen through the ranks of an enterprise only to start all over and risk what they've saved of their fat paychecks on an idea that may or may not hit big.
"It was very scary leaving Google," said Anastasia Leng, a former Google product marketing employee who founded Hatch, a Manhattan-based online marketplace, in 2012. "You start to think, If I leave, will people respect me less? Will the doors that have been opened [because of my job] start to shut? How will you be perceived if your company doesn't work out?"
2. The right kind of fear can be a good motivator.
Leng's experience shows the more typical fear of failure, but fear can, and should, also be a motivator. Specifically, the fear that someone will beat you to your own idea if you don't take the leap fast enough.
"We have this fear that someone else is going to [execute the idea you came up with], and there's a tipping point where you're so utterly convinced that it forces your hand," said Matt Ellis, the former director of sustainability solutions for CBRE, the global real estate and investment services firm. Ellis left CBRE in 2012 to start Measurabl, a San Diego upstart that sells cloud-based software for sustainability reporting and data management—an idea he came up with at CBRE while working on ways to monetize new sustainability services.
3. Expect to start from scratch with everything you think you know about tech.
For Ray Gillenwater, the decision to ditch his high-paying managing director job at BlackBerry to run his own firm came at the last possible moment: the summer of 2012, when it looked unlikely that the smartphone maker would recover the market share it had lost to competitors like Google and Apple.
"It was hard to leave," said Gillenwater, who had been responsible for building the BlackBerry brand in places like Indonesia and the Philippines. "But I had made some great money, had some savings and could afford to better myself."
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With only corporate experience under his belt—Gillenwater's career started in the customer service department at Verizon—he spent a year touring the tech start-up industry, pursuing investments and taking on an advisory role with a business incubator in Singapore.
"I knew that the skills required to start a new tech company were different from the ones I had acquired," Gillenwater said. He studied how the upstarts were building products and automating technology processes on small budgets. "It takes a massive mental shift to apply [the start-up methodology] and learn it. It's counterintuitive to a big company, where you invest in something like crazy, built it and then push it hard with marketing and big budgets."
Once Gillenwater felt comfortable launching a start-up, he dusted off an idea he came up with at BlackBerry—technology that makes it easier for employees to collaborate and problem-solve—recruited a former BlackBerry boss and invested $350,000 of his savings to launch SpeakUp.
"With the exception of one investment that's paid out, I haven't had a paycheck since I left BlackBerry," Gillenwater said, who recently raised an additional $350,000 in seed funding. Today SpeakUp, which officially launched to customers in September, is based in San Francisco and Irvine, California, and has 14 employees and 300 corporate customers, including John Deere and Oracle.
4. If you're in it for the long haul, expect lifestyle sacrifices.
Kathryn Minshew, a founder and CEO of career-development website The Muse, has made similar financial sacrifices since leaving McKinsey in 2010. She and her co-founder have two of the lowest salaries at her 21-employee firm, which aims to coach millennials through the job-search process. Six-figure salaries are a thing of the past for Minshew, who saved about a quarter of her take-home pay she made as a management consultant for McKinsey from 2008 to 2010.
"Savings meant optionality; it meant I could do whatever I wanted to do without worrying about the financial consequences," said Minshew, who founded the New York-based careers site in 2011 after finding that searches on the big, well-known job boards turned up irrelevant results. "It also meant that I never got that second cocktail when we went out."
Minshew still hasn't made back the $20,000 she initially injected into the firm, which has 1.5 million users a month. "The value of my equity in the company is a massive multiple for what I invested," she said. "If we wanted to just make money from that, we could have taken one of the many acquisition offers we've gotten and walked away with a great big check, but we're in this to create something that is used by every single young person in America. That's going to take a little longer."
5. An 'itch' is not enough to build a business on, and the big idea can take a while to come.
For Anastasia Leng, the entrepreneurial call came more subtly, like an itch that wouldn't go away, about three years into her tenure at Google.
"I started to feel too comfortable," she said. "I started looking at other jobs, other start-ups, but nothing felt right. One piece of advice I got from someone was that every two years, pop your head up and see what else is out there—if you don't find anything, put your head down; the worst place to be is one foot out the door."
Leng eventually switched to a different division within Google—business development, which exposed her to dozens of early-stage exploratory deals—but "about two years went by, and I found myself getting that same itch," she said.
The lightbulb moment struck when a couple of friends were planning their weddings and couldn't find accessories exactly as they wanted them. Leng started to envision a marketplace where consumers could liaison with designers to get products in the exact shade or material they wanted.
"Once that nugget of an idea popped into my head, everything happened very quickly," Leng said. She left Google a few months later, in August 2012, had a website up by November and $1 million in seed funding by May 2013. "The biggest thing gnawing at me was that I didn't want to wake up 20 years down the road and be the person who talked about doing something but never did."
6. Prepare to learn jobs you've never done before.
What's one thing many corporate workers-turned-entrepreneurs underestimate? Their own limitations.
"At Microsoft, I didn't have to cold-call people to sell them what I was working on—you can rely on others who bring in whatever skills are needed," said HasMetrics' Herscher. "So how do you go from 'how do you build a business to how do you get your first or first 10 customers?' You think it's obvious, until you start doing a job you never had to do."
Herscher and his partner absorbed as many books, blogs and Stanford University business videos on YouTube as they could. He has also leveraged the network he built up while working overseas with Microsoft, asking former colleagues to step in to advise him on ideas and technology.
"I always knew I wanted to run my own business, but it's easy to lose sight of that," said Herscher, who spent nine years at Microsoft. "You get comfortable with the cushy job, benefits; it's a system designed to keep people satisfied.
"But at some point I had to ask myself, 'Is this it? Is this my life? Do I spend 30 years doing these same things because it's an OK experience, or is there something greater?'"