Sometimes I get the feeling I want to start my own business and fly free, without the constraints of working for someone. And while I know some smart friends who might join me, I still wonder whether I have the instincts and leadership required to launch a venture.
Forget, for a moment, your desire to fly free. Forget the “required” levels of instinct and leadership.And while you’re at it, forget your smart friends. To start a company, you need those things—eventually. But first, you need a great idea.
Not to discourage you or denigrate the entrepreneurial urge. To us, the gutsy individuals who launch ventures are some of society’s biggest heroes. And yes, there are people who dump their day jobs, hunker down in a garage or spare bedroom with a bunch of friends, and then five years later can be seen ringing the opening bell on Wall Street. But before you start visualizing yourself in that picture and make the leap from stability to startup, it probably makes sense to separate wishful thinking from the less rosy realities that usually characterize the entrepreneurial experience.
Let’s start with a favorite wish—you mention it in your letter—that entrepreneurship grants independence. True, you will become your own boss. But for months and even years, that choice will mean less freedom and flexibility, not more. You won’t control your life; your new business will do that for you. After all, when you have only two customers, you don’t tell them you can’t meet on Monday at 5 p.m. You smile when they show up three hours later. In your heart, you may be flying free, but in the trenches you’ll still be taking orders, just from a new set of bosses.
Another bit of wishful thinking is something you don’t mention, but it is common, too. It holds that entrepreneurship bestows financial independence. If only! Unless you’ve built up a pile of savings, no one is more “owned” than the founder of a startup. We recently met an entrepreneur whose venture was stalled because she was loath to give more equity to private investors or venture capitalists. “It’s bad enough to give up control,” she complained. “But if I keep giving away stock, I’ll still be driving my 1994 Honda Civic to my son’s college graduation.” Given that her son was an infant, she was joking. But the fact is, startups almost always make their founders poor before they make them rich.
Finally, there is the popular notion, to which you refer, that a bunch of bright people bursting with energy to “make it happen” can create a company. We’d call that partial information. Obviously, passionate, talented people are key to getting a venture off the ground, and yes, there have been cases of friends banding together to build something amazing from scratch. But those people usually had an idea to start with. The real engine of any startup is a product or service that fills—or better yet, creates—a market need. Several years ago we attended a celebration honoring the 50 fastest-growing entrepreneurial ventures in the Atlanta area. The room buzzed with excitement as everyone waited to hear who would get the top award. It ended up going to a three-year-old company that had discovered a better way to de-ice airplanes. Undoubtedly that outfit had great leadership, but its revenues were growing by 55% a year because it had an exciting idea that changed the market.
All around the world, we’ve seen successful entrepreneurs, young and old, changing the world for the better. So we don’t want to dissuade you from going out on your own. Just know that there is more to being an entrepreneur than meets the imagination. And if you don’t have a truly great idea to start with, there’s a lot more.
This question and answer originally appeared in Business Week magazine on June 04, 2007.
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