We Don’t Encourage Individuals to Form a Startup

Real entrepreneurs don’t need encouragement to form a startup–although they may benefit from outside perspectives on their plans. Encouraging non-entrepreneurs to form a startup does them a disservice.

We Don’t Encourage Individuals to Form a Startup

“We are all here to do what we are all here to do.”
The Oracle in “Matrix Reloaded”

I have come to the conclusion that most entrepreneurship is involuntary. Either someone is an entrepreneur from the time they are young, which was my personal experience, or they are thrust into situations where their old career path(s) are foreclosed to them and they have to become entrepreneurial.

I have read a number of posts in the last few months about how a downturn–or now a recession–is a great time to start a company. For the most part they are written by folks who in some way make their living off of entrepreneurs, either preying upon them as investors or service providers.

We certainly provide services to bootstrapping entrepreneurs and I suppose it would be in my personal best interest to encourage more folks to start bootstrapping a startup. I don’t think for the most part it’s a reasoned decision. Successful entrepreneurs are certainly prudent in their approach to starting a new business, and disciplined in how they manage not only technology but also selling, employees, and risks.

The closer you get to becoming a real company,
the less glamorous reality seems

“What disgusted the ancient Romans about barbarians was their lack of discipline. Oxford Professor Peter Heather writes, “As far as a Roman was concerned, you could easily tell a barbarian by how he reacted to fortune. Give him one little stroke of luck, and he would think he had conquered the world. But, equally, the slightest setback would find him in deepest despair…” This is why, 2,000 miles from home, several hundred Romans could slaughter several thousand barbarians.

Startups are founded by barbarians. But to survive the ups and downs, you have to make yourself into a Roman. The most talented entrepreneur I know nearly self-destructs on the 18-month birthday of each of his ventures. By that point a startup isn’t brand-new anymore, and it isn’t Google either. The closer you get to becoming a real company, the less glamorous reality seems: you’re grimy from clawing for money and breathing hard now from exertion, which would be fine if you could convince yourself you’re not the only one struggling. Everyone struggles. Keep fighting.”
Glenn Kelman “First Time CEO’s Survival Guide“

I like Kelman’s perspective, highlighting the struggle and the uncertainty. If you find yourself thinking “how hard could it be?” you are probably not considering all of the risks. Taking the time to gain a thorough understanding of a market shouldn’t deter you from taking prudent risks, but will help you to avoid some risks that you might have otherwise blundered into.

Drama 2.0 (pseudonym) disagrees with Kelman (bold in original) in that he views entrepreneurship more as a set of traits that are learned young.

 

Although the Romans did assimilate the people they conquered, I’d argue that real Romans were born and taught Roman values by the time they were young adults. They didn’t just decide one day to become Romans.

It is true that people can change. At the same time, there are usually very real limits to how much individuals can change.

In my experience, entrepreneurs who are the metaphorical barbarians Kelman writes about don’t become metaphorical Romans. It’s a personality thing. It’s a culture thing.

An entrepreneur who sets out to conquer the world, celebrates before the battle is over, spends like a drunken sailor the minute he gets some booty and despairs when times get tough is probably not doing those things because of a conscious choice. He’s most likely doing them because that’s simply who he is.

Being realistic, maintaining humility, exercising some prudence and fighting smartly when disadvantaged are not things he is capable of doing well. It’s just not in him; he’s not “wired” for it.

Many of the young entrepreneurs that flock to Silicon Valley every year are barbarians. Their focus is on going from $0 to $100 million, not recognizing that most new businesses never even make it from $0 to $100,000.

On the other hand, there are plenty of entrepreneurs who are Romans. They’re strategic, well-equipped and well-trained. They developed discipline and a work ethic at a young age. They are not looking to deliver a massive blow to the market they attack by going from $0 to $100 million in a single strike. Instead, they pick and choose their spots, looking for opportunity and vulnerability.”
Drama 2.0’s “Romans vs. Barbarians“

Desire for Wealth Less Important and Patience and Self-Discipline

Individuals who are motivated by making a lot of money, in particular making a lot of money in a hurry, don’t seem to have the patience and self-discipline to prosper–certainly in a downturn/recession. So I would only end up encouraging the underqualified by appealing to their greed or their desire for autonomy.

Also the people who ask “should I be doing this” more than once or a twice a quarter (the “normal rate of doubts” among entrepreneurs in my experience) and look for reassurance in seminars and blog posts about why now is the best time to start a company should think very hard stepping onto the entrepreneurial roller coaster. I personally wouldn’t want be anywhere else, but then that’s just me.

I don’t like to discourage entrepreneurs either. I am always energized by the opportunity to hear bootstrappers’ perspectives on their business and their markets. If you have time, please drop by a Bootstrappers Breakfast in December or January and learn some of the realities of bootstrapping firsthand from entrepreneurs who are doing it.

If you have made the decision to team up with people you trust to form a software startup, you can definitely come to us for advice (free and paid) and we can help you not only avoid problems but pursue sound strategies for establishing your firm in a market and growing it.

Related Blog Posts

• “Doing Less with Less“
• “Overnight Success”
• “Using the Downturn to Launch Your Consulting Career“

Update Dec 6: Chris Balavessov left the following comment

Update Dec 8: Matt Maroon wrote a good post on this same topic “A Little Better Advice” which I intended to take in a follow up to this post.

Back when I was a B-list professional poker player I got a lot of inquiries from people I didn’t know asking me if they should go pro. A lot of other pros who were asked that question said no every time. And they weren’t really wrong to do so, because if you’re asking someone you don’t even know that question, no is at least 75% likely to be the correct answer.

It’s not a very helpful one though. I realized early that people aren’t really asking you if they should go pro. They’ll make their decision regardless what you tell them, and if they got far enough along in the process to start asking, the smart money was that they were going to do it in the near future. I’d bet that the majority of them did, even though almost all of them were told not to.

So instead of just giving them a flat out no, I asked them a bunch of questions. Do you have kids to support? How much do you need to make each month to make ends meet? Do you have enough saved up to break even for three months (or six if you’re playing live) and still have a bankroll left? What’s your win rate and sample size? […]

A lot of people probably ignored everything I told them anyway, just as they would had I said no (or yes for that matter, since they were going to anyway, though they’d blame me if it went badly for them). But I know I saved a few people from a lot of agony, and ended up encouraging a few who went on to have success with it. By not advising them one way or another, but rather giving them more information, I helped anyone who I could, and I at least didn’t hurt the rest.

Update Dec 12: I realize I addressed some of Matt Maroon’s concerns in “Entrepreneurs Need Gumption to Succeed.” We have 382 posts since October 2006, I will take some time to get a better index organized for cross-index and references.