Starting a company is hard. Having been there, and still going through the process, I sometimes wonder why anyone would want to do it. People will question your decisions and doubt you. Customers will reject your product and your ideas. There are long hours working day and night for little pay. Your life is turned into a roller coaster of ups and downs. It’s challenging, to say the least.
However, when things are clicking, there can be nothing like it. Building a product that solves a problem, satisfying customers’ needs, and creating value make it all worth while. These are the things that keep you coming back for more. They’re the goals every entrepreneur strives for. But achieving these goals is not easy, and sustaining them is a near impossible challenge.
So why on earth would anyone ever want to “do” a startup?
There are many reasons why you may want to start your own company. Let’s break these down into what I consider the good reasons to venture out on your own, and the questionable or bad reasons to make the leap.
Good reasons to do a startup
- You’ve created a solution for a problem or need you have, which others have too
The best way to solve a problem or fulfill a need you have is to build your own solution. It’s even better if this is a problem that others have. By scratching your own back first, you get to do what’s call “dog fooding.” That’s when you use your own product before and while you’re marketing and selling it to others. A classic example of a company who uses the products they offer to the general public is Google. They use many of the products they sell for internal projects. It allows them to test the product and confirm that it does what it needs and is supposed to do. Also, when customers start using it, they get valuable feedback that allows them to refine it, prioritize feature development, and make it more useful for both customers and their own internal use.
Effectively, by scratching your own back first, you can verify that the product you are creating works, does what it needs to do, and adds value over competitive offerings. It makes it easier to build your sales and marketing materials, and it makes those first customers more comfortable knowing that you have a vested interest in making the product work well and succeed. - You have a desire to build something of lasting value
Starting a company is the ultimate exercise in building something from scratch – effectively creating value from nothing. It requires taking an idea, acquiring the resources and pieces to build it, assembling them, and arranging them in a way to create a machine that can operate on its own and has lasting value. Starting a company is not a goal that you achieve. When you decide to start a company, you have to embrace the journey as the reward. The point of building your own company is to push the limits of what you’re capable of, to learn and grow, and to find a way as well as the strength to enjoy every single day. - A burning passion
Some startup ideas are born out of the old adage, “you can run, but you can’t hide.” If you’re haunted by an idea that you can’t let go of and opportunities keep popping up, then it might be time to take action. It’s that burning passion, the fire that won’t go away. No matter how hard you try to let it go, or to put it behind you, it just keeps returning. If this describes what you’re feeling, then it may be time to just do it. Life is short. You only live once. Make the most of it. And remember, the success or failure of your startup won’t define you. Even if your startup fails, you can pick up the pieces and move on knowing that you at least tried. And you never know. Your passion could end up changing your life and the lives of those around you for the better, in ways you’ve never imagined.
Bad reasons to do a startup
- You just had a fight with your boss
Deciding to start a company should not be a snap decision driven by emotion. It needs to be rational and well thought out. While there is less and less security in corporate jobs, there is even less security in a startup. The vast majority of startup businesses fail. According to the statistics, only 1 in 10 startups survive for the long run, and only 40% turn a profit. So you might want to think twice before telling your boss to shove it, particularly if you depend on that steady paycheck, benefits, and 4 weeks of vacation. Keep in mind that these are in short supply and considered luxuries in a startup. - You’re tired of having a boss (corollary to had a fight with your boss)
I totally get that working for someone else is not glamorous. It’s soul draining. It’s a drag. The answer, however, is not necessarily starting your own business. You must understand that you will no longer have a boss when you start a business. You will have many bosses. Your customers will expect (demand) things of you. Your family, who enjoys their comfortable lifestyle, may want instant results so their lives aren’t disrupted. You will be your own boss and expect much of yourself. And if you raise any money, whether it’s from professional investors or friends and family, expect more people telling you what to do. In other words, being your own boss isn’t all it’s cracked up to be. In many cases it can be harder. On top of listening to all of your new bosses, you also have to be the manager who sifts and sorts through all the demands to determine what to prioritize and what to work on. It can get overwhelming, fast.
So before you fall into the trap of working for yourself, realize that working for someone else is not all bad. It could be that your current job is a bad fit. In that case, no one is making you stay. It’s better to find a new job than to start a company that could disrupt multiple aspects of your life. - You think you can do Facebook better
People love the underdog story. The small upstart that upends the giant behemoth at their own game. It’s way easier said than done. Established companies have lots of resources available in financial capital, human capital, and intellectual property. It’s true that big companies are like battleships that move and turn slowly. But when they do, they can unload a ton of firepower and obliterate your small business when it’s in their sites.
Successful underdog stories usually start out with a company servicing a market niche that allows them to grow and capture a share of the market. Like the frog in the boiling pot, the underdog slowly erodes the incumbent’s market share and emerges as a threat before the large company can properly respond. It’s a process that can take years to happen. It requires lots of patience, determination, and grit. If you’re going to take on the major market player, you have to be committed to being in it for the long-term. - You want to be a billionaire like Jeff Bezos
Making money can be a great motivator, and it can also be a measurement of value. Starting a company to make money isn’t a bad reason, unless it’s the only reason. From my experience, money isn’t something that is made in a startup, it is a reward that is granted for creating something of value. In other words, your focus needs to be creating a product or service that provides value to and services your target customers’ needs. If you do that, and do it well, then you will build value in your company, and the money will follow. Rarely does it work the other way around, and when it does, it usually doesn’t end well with WeWork being the latest example. - My idea is way better than the teen sensation who just got funded on Shark Tank
Perhaps the most important lesson that I’ve learned in running a business is that ideas are a dime a dozen. We all get them, and we all get a lot of them. Don’t believe me? Start telling people that you are going to start your own business. You will get all kinds of free advice and ideas about what you should do, and how you should do it. I’m sure there will be more than a few who suggest you go on Shark Tank.
The point is that it’s not about the ideas. It’s all about the execution. That is what really matters. Elon Musk wasn’t the first person to come up with the idea for an electric car. Jeff Bezos wasn’t the first person to sell products online. Steve Jobs didn’t invent the first personal computer, music player, or cellphone. What these individuals had in common was the vision, determination, and discipline to follow through, secure the resources, arrange them, and turn their vision into a reality.
So remember, it’s not the idea that matters, it’s the ability to act on it and make it real.
Doing a startup isn’t for everyone. Make sure you have the stomach to take rejection, that you have the perseverance to push through the low times and the temperament to realize that things are never as good as they seem, and never as bad as they seem. The truth is always somewhere in the middle. And just remember that there’s nothing wrong with the corporate world. If you’re in it for a paycheck, benefits, and 3-4 weeks of vacation a year, then the startup life isn’t for you. On the other hand, if you like adventure, enjoy learning, love working through the ups and downs of life, and have a desire to build something of lasting value, then you’re on the right track.
To be clear, I’m not trying to dash your dream or pour cold water on your hot idea. If you’re determined, then, by all means, you should go for it. I’m just making sure you understand how deep the water is before you jump in. There are no guarantees when you start a business. The majority of startups fail. Successful startups can take years to build. If you get it and are comfortable dealing with the uncertainty, then the next step is getting started, which will be the topic of my next Startup Lessons post.