One of the startup blogs that I follow is written by Sean Murphy, who does sales and business development consulting for startups. A recent post he wrote contained a great passage in response to an article by Morgan Housel titled “I’m Just Now Realizing How Stupid We Are”.
Sean Murphy highlights one of Housel’s lessons learned:
I’ve learned that people’s expectations grow faster than their wealth. The country is richer than it’s ever been. I don’t think it’s as happy as it’s ever been.
and relates it to a startup:
Too many entrepreneurs think that wealth will solve their problems or make up for other shortcomings. I have watched a lot of people get wealthy, very few were improved by it. If they were unhappy or held back by bad habits wealth enabled them to engage in worse behavior and only pointed out the need for personal transformation.
It got me thinking as to why people become entrepreneurs.
There are many reasons to start a business. There may be an opportunity to create a product or service that provides value to businesses and/or consumers. You have a problem that you want to solve that you know others have. You want to follow your passion and do something you like. You want to generate personal wealth.
Of all those reasons, I would caution one to be wary of starting a business if the main or sole purpose is to get rich. Sure, everyone who starts a business want to make it big, but of all the startups that form, only a small minority generate significant wealth for their owners. Most will fail. The rest require persistence, perseverance, and a lot of patience in order to stay afloat. If you’re not committed for the long haul from the outset, the chances of your startup surviving are slim. Your why for starting the business will need to be strong enough that it can drive you through the ups and downs that you will be subjected to. And when your startup survives and you make it big, will you want to be remembered for becoming wealthy, or will you want to be known for making a significant contribution that benefited others. In other words, will getting rich be enough to satisfy you?
So if you’re looking to start a business and become an entrepreneur, have you determined what’s your why?
By the way, I’d strongly urge you to read Morgan Housel’s entire post. It’s a fun read that contains a lot of good observations about human nature as it applies to investing and the economy