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10 Questionable Reasons to Become an Entrepreneur
If you are wanting to pursue an entrepreneurial opportunity, here are ten questionable reasons to do so.
Reason #1: Your friend did it, so can you
When you watch someone who has taken the plunge and become an entrepreneur, it seems like maybe you can do it too. What is “visible” is only the “actions” taken by this person (like writing a business plan, meeting with investors, raising money, incorporating, creating the product, getting early customers, getting media attention…). It may be tempting to see that you can “copy” the actions taken by this person and repeat the process and you can be successful too.
However, upon close observation you will also notice that there is a ton of things that are “invisible” about this person. These may include, but not limited to the person’s
- Support (especially family and friends)
And so on.
While the actions of someone can be copied, the “sort of invisible” attributes are hard to copy.
These attributes are not exclusive to the other person. You probably have all these attributes and a healthy dose of them too. However, the makeup of these attributes in that person’s case may be “right” for life as an entrepreneur and in your case they may not be.
The wisdom is to recognize this early enough so that you can avoid suﬀering later.
Reason #2 You want to get out of the “box”
Large organizations can put people in boxes. You may be in one of them right now. Sometimes you may get a feeling that you are overworked and underutilized. Being ambitious, you may feel a bit suﬀocated in that box sometimes and literally want to get out of that box.
You are smart and you know that there are MANY ways to get out of that box. For one, you can think about ways of “adding more value” to your current organization and execute on it. This may simply mean using a lot more creativity than what you have been using or walking the extra mile a few more times than your peers. You may say that the extra eﬀort to get out of the box within the current organization may be too much of a price to pay. You may also conclude that if you join another big organization, you may just end up in another box of diﬀerent size.
The solution, you say, is to just go and start on your own. That way you are “out of the box”.
It may be because when you start on your own, you get an initial euphoria of not having to answer to anyone and hence you are “outside of any box”. It may seem like it’s the best thing to happen. Of course, this is short-lived as you will soon realize the truth – while you may be the boss, you are more accountable than ever before.
You are answerable to:
And, in some way, to your
And so on.
In summary, you are not “out of the box” – you are just in a “bigger box” than before.
Reason #3: You can make a ton of money
Yes, you can, possibly. On the other hand, you can lose your shirt too.
Remember that for you to make money, almost EVERYTHING has to go almost right and for you to fail, only ONE important thing has to go wrong.
First, let us look at the employment option. Theoretically, as an employee, there is a limit to how much you can make. Most stock options are not worth much as the companies die at an alarming rate. Exceptions exist where employees have made a ton of money. Want proof? Ask any early employee of Google, Microsoft, Amazon or Infosys.
It seems like, as an entrepreneur, you have a better chance of making a ton of money. Just imagine a future event with your new venture – it can be sold, it can become a cash cow (and you can take dividends) or you can go for an IPO. Take any business magazine and you will read stories about how some entrepreneurs made it big. Some of these stories also contain details of exactly how those startups succeeded.
Yes, it does seem like you can make a ton of money being an entrepreneur.
If you are currently an employee frustrated with the knowledge of how much money you can realistically make with your employment option, you may be tempted to become an entrepreneur so that you can make a ton of money. Personally, wanting to make money is not a bad thing but starting a company with that sole purpose may be risky.
Rather than defending my claim, let me take a diﬀerent view on entrepreneurship.
Suppose you are currently an employee and you don’t want to be an entrepreneur. For the sake of this thought experiment, imagine that you want to be an entrepreneur in about a year or so. Just imagine that you take this seriously and start preparing to be an entrepreneur. You ask for help, read books, attend classes and couple with already successful entrepreneurs or entrepreneur wannabes. The topics of your discussions and small talk will change. The magazines that you will read might change and the events you attend might change. In a year, you will be transformed and become a diﬀerent person. At this time, you are “ready” to jump in and become an entrepreneur. At this time, you have a choice to NOT become an entrepreneur and continue as an employee.
Whatever you do, your life has changed and you have become a better person than before.
In summary, imagine becoming an entrepreneur for WHAT IT WILL MAKE OF YOU rather than just for making money. It will become a wonderful and transformational journey.
Money is always a by-product of success. When you try to become an entrepreneur solely for the purpose of making money, chances are that speed bumps will seem like road blocks and roadblocks will look like dead ends. In my opinion, money will come when you relentlessly go after a meaningful dream and make a diﬀerence through your (ad)venture.
Reason #4: You have a great idea!
Here is something on a lighter note: The only time you should choose to become an entrepreneur because “you have a great idea” is when you are sure that God personally sent you that idea with only your name put on it.
Many times you may feel that you have a “really good idea” and it is worth betting your farm on it and start a company. However, chances are that MANY other people in the world may have the same “really good idea” at the same time you had it.
A good idea is golden, but that is only a starting point. A good idea is necessary, but not suﬃcient to succeed. Without one, you may be at risk of a premature death. But with one, there is no guarantee of success.
When you have a great idea, the questions to ask yourself is
Now that I have this great idea, do I have the right conﬁguration to execute and make this dream a reality?”
Can I convince the marketplace that I can make this happen?
When you look at what it takes to put together a conﬁguration that can execute on an idea, you will see that in most cases, coming up with the idea is the easy part.
Next time when you pitch your cool idea and get turned down, think and see if it was THE IDEA that was turned down or whether it was their assessment that YOUR ABILITY TO EXECUTE on that idea that was turned down.
Reason #5: You have a project from your current employer
Imagine a scenario. You work for a large company managing the vendor relationship for a project that your company has outsourced. You are happy with the performance of the vendor. Over the years, not only have you learnt the business side of things, you have also learnt a lot of things about executing on projects from a vendor perspective. In fact, you have advised the vendor on several things and they almost consider you as their champion within your company.
There comes a day when there is a new project and you are contemplating whether to hand over that project to the same vendor or get a new vendor. Suddenly, it occurs to you that you could structure a deal where YOU could be that vendor. You can resign from your position and start a company and execute this project. You start exploring this idea with your boss and after a few discussions, he agrees to your proposal and oﬀ you go to become an entrepreneur.
The above seems like a fairy tale, but it is a possibility. It also seems like there is “zero risk” in the above proposition.
Because the biggest problem that someone faces when they start a company is to get your ﬁrst customer. You are covered there. So, unless you mess-up big time, it should be a smooth ride from then onwards.In reality, many things can go wrong. Here are some of them:
Unrealistic expectations: When you start oﬀ in a territory that you are VERY familiar with (you were an employee there before), everything seems easy. Right out of the gate, you are cashﬂow positive on a monthly basis. This rarely happens in a new venture. The risk here is that you may start “expecting” that things will continue to be easy.
Not able to build the sales and marketing muscle: What is also interesting is that you have a project that was pre-sold. You didn’t experience “what it takes” to market to and sell a new concept or a project to someone outside of your network.
Risk of complacency: When things go smoother than expected, there is a risk of getting complacent, leading to problems further down the road.
Risk of structural misalignment: When you start oﬀ executing on a project in a known territory, you also face the risk of building a company structure suited for executing a project. This structure may not be what you need to build a company.
In summary, it is easy to start a company with this setup (being handed a project to start with) but hard to maintain and grow unless you grow quickly. There are always exceptions and you don’t want to base your strategy on succeeding via statistical likelihoods.
Reason #6: You and your friends want to create something together
The scenario here is simple. You are a “bit” frustrated about your current job and the future that it holds. You start talking to some of your friends and believe it or not, they are a “bit” frustrated about the same thing too. With these discussions, soon the frustration among all of you increases gradually as everyone is feeding some more “frustration” to everyone else. Until one ﬁne day you or someone in the group proposes that rather than struggling with the job and being unhappy, you all should join hands and start a new company.
There is an overwhelming support from everyone else.
So, you begin your journey of entrepreneurship. Or, you think you begin the journey anyway. But not only does your project do not take oﬀ, you are also more frustrated with your current job as it is “coming in the way” of your dream project. It’s a double-loss really.
Over the last few years, I have met many such groups who are building a company in “stealth mode” and most often what has happened is that the groups get together in the evenings and weekends to build a “product” as a good product is the “foundation” of a company. When I dig deeper, I see some or all the following characteristics of the group:
No real leadership: They are all equal, they say.
No discussion of ownership: Again, sometimes they say that everyone is equal (which surprises me a lot) and sometimes they say that they will ﬁgure it out later. If pressed hard on the topic, the details can be scary as every team member thinks that they were the most “valuable” player in the group and obviously should get a lion’s share of the company.
No $$ investment: Everyone is putting in sweat equity. There is no money invested from anyone. So if the company goes down, all they have lost is the “time” that they put in. When I probe further on, they say that “time is like money”. That is true, only if they would have done something more “valuable” with the same time if they had not engaged in this activity.
Risk aversion: Everyone thinks someone else will jump into this full-time. When the time is right (meaning – when there is no risk anymore) they want to jump in.
No discussion of titles: Sometimes I have seen multiple people wanting to be the leaders and sometimes I have seen everyone wanting a CXO title. It is surprising and scary at the same time as most often, there are no individual qualiﬁcations (or accomplishments) to warrant those titles.
I can go on but the most important suspect in the above game is that the “conﬁguration” to start a company is purely based on two things
a) Shared frustration of their current situation and
b) “Friendship” with the band members. That, as you will see is not suﬃcient to succeed in the game of entrepreneurship.
Reason #7: Your company makes a lot of money from you.
You have been told time and again that you are VERY important to your organization. You have received awards for your service and every year you get a raise way higher than your peers. So the company actually backs you by words and deeds. You are happy with all the attention you are getting and the company is happy that you are happy.
However, recently you started looking at this more “logically” and realize that the company makes a LOT MORE than what you are actually receiving. You may really be short-changed you think. Rather than working hard for your company you could have worked hard for yourself and made ALL the money for yourself.
Thinking about this some more you realize that you pretty much operate autonomously today with little support from your company on all projects. So when you start on your own, you will not miss much.
Finally, you make a decision to become an entrepreneur.
Before you take the next step, please know that there is a ﬂaw in the above logic. While it may seem like the company is not supporting much, in reality, it does support you a lot.
Here are some things that the company brings today (these become invisible over a period of time) and you may be taking them for granted:
Your company brand: Do you have the same power without being associated with your current company? Maybe or maybe not.
Your company’s support system: Be it operations or human resources, when you need them they are there.
Your company’s existing relationships: While you may be thinking that you are doing your job autonomously, there are other people within your company who have relationships with your customers. Everything matters.
Your company’s history: When you launch your company, there is no history for it. But your current company has a history and if it is good, it matters!
Personal branding for key people in your company: Currently the personal brands of key people within your company makes a diﬀerence (individually and collectively). When you launch your own company, initially all you have is your personal brand.
In summary, there are many more things to consider before you conclude how much your company is making from your services. You should also consider that all these “invisible” things are not available to you in your own new venture immediately.
Reason #8: Everyone loves you!
You are the star of any party or get together and people really love you. You are the life of any group. You are popular among all class of friends and you are comfortable with that attention.
Some of your friends have suggested to you that you are not taking “full advantage” of the popularity that you enjoy. You should really be starting something on your own, they say.
While you didn’t have any plans of starting your own venture, hearing this idea from your friends over a period of time makes you think again. After a while, you start to seriously contemplate starting a company.
Let us analyze this situation a bit.
Ability to gain rapport with all kinds of people is a great asset to have but that is not everything that is required to start a company. It is great that people around you, love you. The next step is to know why they love you.
On a lighter note, this is what a friend of mine says, “People love to see a clown in a circus, but they won’t go to the circus to see a clown alone”.
It is just not the love, but the kind of love that becomes important.
Think about it:
You love to eat what a particular chef prepares at a restaurant and you are lavish in your praise for his work. However, if the chef comes to you and asks you to back him up to start a new restaurant on his own, you are not sure. You like him as a chef, but he has not proven to you as a business person.
You love a project manager from one of your vendors. He has been working onsite for a while so you get to see him almost daily. You openly tell him about how much you love his work. When he comes to you one day and asks you to back him up to start his own company, you are not sure. You like him as a project manager but he has not proven to you as a business person.
In summary, if you are popular, please enjoy the attention. However, if you are planning to use that as a basis to decide on becoming an entrepreneur, please think again.
Reason #9: You have inside information
You are reasonably well-connected in the industry and every now and then you get to hear some “inside” information. Most of the time, you don’t think about it much and get along with your life. Last time, though, when THAT inside information became public, it became a really BIG thing. You think about it and you feel like banging your head – you knew it way before everyone did.
Next time around, you think that you should act fast. Maybe there is an arbitrage opportunity and you can make use of it. Maybe you can just create a company and take advantage of the timing of this information.
Before you do something radical, think about this again.
Here are some points to consider:
Ideas are not everything: You are smart enough to come up with your own ideas and there is not a need to rely upon an idea to be prompted by some “inside information”. Ideas are plenty and as we talked before, ideas are only a small part of what it takes to build an enterprise.
Inside information may not be exclusive to you: The fact that you got that “inside information” is the proof that it might have been “leaked” to more people than just you. There is no guarantee that it was exclusively given to you.
There is no way to verify the information: Unfortunately (or fortunately) you can’t talk to the PR department of the company to verify this “inside” information….
Risks are unknown: One way is to take a calculated risk and the other way is to gamble. Using “inside information” to take a major step in your life is akin to gambling. You be the judge.
Ethics are (highly) questionable: Last but not the least, the ethics of doing something like this is questionable. Why would you want to risk your identity for something like this?
A shortcut is probably the longest route to success. Shortcuts are deceptive because they make you feel like you are winning in the short term, but only to make you feel ﬂat on your face later.
Reason #10: You have a lot of connections
There is a slight (but signiﬁcant) diﬀerence between you have a lot of business connections AND your company having a lot of business connections and you are just representing the company
In the second case, people talk to you because you represent THAT company. However, if you leave your current position and go somewhere else, those relationships will continue with the new person that takes over your position. At this time, if they don’t really “miss” you, then it is guaranteed that you never had those business connections, your position just warranted having those relationships.
Not seeing the above diﬀerence can be costly. If you don’t see this or such things, then you are at the risk of “not knowing your position” in the marketplace.
This is a common trap for very smart salespeople who have made a ton of connections. Most of these connections were the result of them working for their current or previous company. Their customers treat them well and are very nice to them, but mostly because of the brand that the salesperson represents. Unfortunately, not all of these people have built a powerful identity of their own.
The risk typically is directly proportional to the brand power of your employer. It is hard to know whether people are talking to you nicely because of you or the brand power of your employer. If you make a mistake there and start a company based on this false assumption, you will pay a big price later.
Let me outline a possible scenario:
You start a company based on the fact that you have a big network when in essence, the network really belonged to your employer.
You are smart enough to start the company in an area that is beyond the focus of your employer.
You ask for meetings from your old contacts and they gladly oblige. What you may not realize is that these meetings are “courtesy” meetings. The people who gave you those meetings have no intention of doing business with you. Remember that these people did business with your employer (which was way bigger than a tiny startup).
The meetings (coﬀee, lunch, formal, informal) meetings seem to go very well. They ask you a lot of questions about your plans (mostly out of curiosity) and ﬁnally request you to keep them posted.
After six months of marathon meetings and no business, you decide to close the shop.
In summary, before you start your entrepreneurial venture, please look at your business connections and determine whether they are the result of your company’s brand power or your personal brand power or both.
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