A few years ago up until today, I would hear about the dawn of a new age. A time when every single person would have to figure out how to independently add value to the economy. A time when employees would no longer be of use.
Concepts such as “the sharing economy” and “3D printing” and “self-driving” cars would kill countless numbers of jobs, and it’s only the beginning. Paralegals are being replaced, and soon lawyers will too. Accountants too, and soon enough, even human doctors will go missing.
Those were powerful arguments for me. I thought I needed to figure out how to adapt. What would the future look like? What if I couldn’t code, I’d be completely useless to the human race? What would I do? Where would I go?
I would read articles that would pop up on my social media feed and they would all tell me the same thing.
“Start your own business.”
Woah, what’s going on? Those tricky algorithms sure knew how to grab my attention. Of course, I clicked on more articles and read about more people who ‘figured it out’, and they were all telling me the same thing. That today is the right time to be an entrepreneur, and that if I bought their course, they’d show me the way how they did. And then, I would be able to break free. And so I did.
I promised myself to take courses, read books, and do everything I could to educate myself on the topic, and I did, in between jobs, while attempting to start a company myself, I was constantly educating myself. Trying to learn about every tip, trick, hack, and shortcut that there was.
I even met people just like me, and it turned out they were even more obsessed.
They read more books, knew more about technology, and knew about every exit and IPO, every shortcut, all the latest trends. I felt I was even more behind than I thought I was. I had to catch up. How else could I survive the apocalypse?
But before I tried catching up, I wanted to learn more about who these magical people were, and why they were so adamant about starting up.
So I did what any serious detective would do.
I found one article that offered 20 different reasons to start a business. 20! That’s a lot of reasons I thought. And then another article with 10 reasons. I wondered if there was any intersect. But it didn’t matter, the more I read the more I was convinced. Confirmation bias? Who cares?
If you can give me 20 reasons to do anything, I’ll believe you.
Skip forward a couple of years, and I realized that there’s a lot more to this entrepreneurship thing than meets the eye.
I finally start to question my presumptions and take a closer look, to ask myself questions I avoided asking.
My first question was:
Is Entrepreneurship all Hype or is it The Real Deal?
Let’s start from the beginning.
In his excellent book, Sapiens, Harari points out what makes human beings so special. One reason, he states, is our ability to believe in a story. Mind you, Yuval’s definition of a story is quite broad. It’s quite close to the definition of an idea. Anyway, his definition states that anything immaterial that human beings collectively believe in can be considered a story. So that includes religious ideas, the value of money, nationalism, humanism, etc..
Entrepreneurship is a story. A great one.
It’s a story that is legitimized when more people believe in it. The more entrepreneurs there are, the more success stories there are, and the more success stories there are, the more entrepreneurs there will be.
And when enough time passes, regardless of the fail rate, the story gains in stature. So, if 1 in a 1000 entrepreneurs succeed, that’s not so good for the story of entrepreneurship if 1000 people were trying to be entrepreneurs.
But, if 1,000,000 people were trying to be entrepreneurs, and 1,000 entrepreneurs succeeded, that’s a different story. Books will be written, courses will be given, both online and on campuses all over the world. Stories will be told, repeated, and spread. Awards and competitions will develop. Accelerators and incubators will form, angels and VC’s will propagate, and the story gets even better.
Another human advantage that Harari talks about is our ability to connect with each other in large groups. Chimpanzees can collaborate in small groups, but they can’t collaborate in 1000’s. Human beings, on the other hand, through language and writing and technology, were able to communicate through time and space. Words could be transmitted to millions of people, and now, billions of people.
A powerful idea like entrepreneurship that is communicated by thousands of people who have found ways to profit from it, some legitimately and competently, and others by scamming whoever was naive enough to listen to them, has consistently grown in popularity and force.
Without entrepreneurship, the world would be a lot less interesting. We wouldn’t have Google or Facebook or Amazon or everything else we use on a daily basis to improve our lives and the lives of others.
And it’s only fair that these risk-takers when they do create something of real value, do get rewarded. And it would be of greater benefit to society if there was a way of capping the financial risks of those who fail.
“If modern society is to progress, we must honour the “ruined” risk-takers with as much respect as we do soldiers.” Nassim Taleb
So entrepreneurship is definitely good for society, but is it good for you?
Where are we headed?
As companies get wealthier, and technologies develop, and connectivity improves, employees will find themselves less valuable. As Harari points out, a useless class will emerge. This is a time when most jobs that were once considered meaningful and attractive to many people will become automated. The surplus of idle hands will create a state of distress in society, and these people will try to self-medicate by taking painkillers, playing video games, and living virtual lives.
It depends on who you ask.
Some people are perfectly content with an existence where they’re made to be useless but have enough security to perpetually entertain, feed, and medicate themselves.
People who think this way are hedonists. For them, life is about seeking out pleasure and avoiding pain. If something like Universal Basic Income existed, they could choose to do whatever they wanted with their time, and naturally, such a world can only be considered utopian. Unless, of course, they wanted to upgrade their lifestyles to seek out even more pleasure, in which case, they’d be hedonistic entrepreneurs.
Others are more concerned with deeper aspects of human existence.
The concern is, that absent meaning in a person’s life, a ‘why’ to get up in the morning, everything falls apart for the individual. He sees life as unchallenging and scorns his banal existence. He becomes depressed and self-destructive.
Even for people who haven’t articulated a “why” for their lives, the idea of just being employed and being a productive member of society, a good, worthy person, is enough to give people’s lives meaning.
Afterall, they’re not alone. That’s almost everyone they know. That’s most people in society. And sharing a sense of purpose with a broader community, particularly if you’re extroverted and high in conscientiousness, is often the only thing that stays standing when all else falls apart.
“He who has a why to live can bear almost any how.” Friedrich Nietzsche
Most importantly, these individuals have families. They are role models to their children, heroes to their spouses. The same ethical values of hard work and sacrifice that have been passed down from generation to generation are suddenly going to have to come to a halt.
And then a void is created, a new value system needs to be remanufactured, but based on what? And what social proof is there for it?
It’s easy to tell your kids to work hard and sacrifice for the future. But what happens when the cards get reshuffled and there stops being a safe, steady path to independence and success?
Maybe you push your kids even harder to not be useless. Maybe you strive to do everything in your power to make sure that your kids are going to be game changers, that they’ll become future leaders of society. That they’ll transform the world with their words and actions. But what if your child can’t do that? Do you get a society of children who have disappointed their parents because they haven’t been able to reach the heights of the top 5 percent?
The fear is that we live in a future where inequality skyrockets because the people that are useful will increase several orders of magnitude in their usefulness compared to the rest of the population. Where it becomes even easier for the Elon Musks of the world to leverage their strengths, and a lot more difficult for the average joe to keep up.
So how are we supposed to get out of this existential mess?
Become entrepreneurs. Stop being an employee for someone else, because you will soon be replaced. At least that’s how the story goes.
And if you’re replaced when you’re 40, without having developed new skills that could help you make it on your own, you’re in trouble.
That’s one way out, but being a successful entrepreneur requires you to be exceptional in many ways. And by definition, it’s rarely the case that you’re exceptional.
Harari, “If they want to continue to have a job, and to understand the world, and be relevant to what is happening, people will have to reinvent themselves again and again, and faster and faster.”
For most people, reinventing themselves isn’t so easy. When you only have a few hours to spare if you’re lucky, finding ways to become competent at new things is a fairy tale. A cruel one, too.
Unless you’re hyper-motivated, disciplined and intelligent, and have time, energy, and resources it’s unlikely that’ll you’ll be able to adapt well to the changing environment.
Assuming we go along with the premise that the future is bleak for those of us who aren’t in the upper percentile, how does entrepreneurship change the picture?
The idea is if you quit your job and try to become an entrepreneur gain back your time at the expense of your short-term security. It’s scary. You’re not going to have any idea where your next source of income is going to come from, if at all. But if you’re forced to swim, or die, you’ll learn to swim.
You’ll quickly learn to get out of your comfort zone and become much more efficient at creating value. And if you can manage to create value, then you’re going to get paid for your efforts.
Even better, you’re going to get paid for something you’re good at doing, at a problem that you chose to solve, on a schedule that you get to set for yourself.
You become truly independent. But, of course, you’re going to have to become a harder worker, more disciplined, and more alert just to be able to keep up.
It’s not going to be a walk in the park, but it’s a light at the end of the tunnel.
“True freedom is impossible without a mind made free by discipline.” Adler
That’s the promise of entrepreneurship. That one day, after working for an insane number of hours with a lot of sacrifices along the way, you put yourself in a position where you can finally get your time back. Where you can make investments with your money instead of time, where you can make time work for you, instead of the other way around.
Is it risky? Sure, but it’s also risky to stay in a job you’re not fully engaged in. Especially if that job can be replaced in the not so distant future. Especially if that job isn’t paying you enough or likely to pay you enough in the short to medium term to help you secure your future.
Here are other reasons why Entrepreneurship is a good choice.
- Become Innovative
By forcing yourself to innovate or die, you’re forced to experiment with a lot of different ideas. Since there is no one right way of doing anything, and many of the traditional systems seem to fail miserably, you’re forced to experiment with multiple systems, ways of thinking, areas of knowledge.
You can’t be rigid. As a result, you’re diversifying your field of knowledge, and you’re becoming better capable of handling change. You become more adept at adapting.
Imagine two worlds. World “Stable” is a predictable world. Things don’t seem to change much. The same jobs that were available in the past are still available in the present and will certainly be available in the future. There is no risk of being displaced by machines. The only way for people to get ahead is to achieve domain competence. To work harder than everyone else in their field, and get predictably rewarded. There is a lot of order and very little chaos.
And then you have World “Dynamic”, where all the rules are always changing. Unexpected successes seem to happen every single day, and traditional ways of doing business become outdated and useless at a rapid pace. This world is highly chaotic and contains very little order. People who innovate are highly rewarded, while those that choose a safer path are barely rewarded at all. Creativity is at a premium.
Of course, we still live in a world of order (World Stable) but we seem to be transitioning to a world that allows more chaos (World Dynamic). We have solid structures and foundations that are dependable and resilient, and they have allowed us to more freely experiment with chaos.
Today, we’re moving faster towards World Dynamic, and it’s both exciting and scary, as you might expect from something that embodies chaos. More than that, it seems to suit certain personality types more than others. If you’re low in openness, you’re probably not going to be very comfortable in a world where everything around you is always changing.
Whereas if you’re someone who’s high in openness, that world couldn’t come sooner. You’ve been yearning for a world that better rewards creativity and imagination.
- Make a Real Impact
Seth Godin and Tim Ferris advocate the offensive mindset that entrepreneurship forces you to be in. Most people play defence, they try to take the safe route, but to make a real impact, to add real value, and thrive, you need to be on offence.
“I look at the future from the standpoint of probabilities. It’s like a branching stream of probabilities, and there are actions that we can take that affect those probabilities or that accelerate one thing or slow down another thing. I may introduce something new to the probability stream.” – Elon Musk
When you’re on offence, you’re making things happen. You’re tilting future probabilities ever so slightly in your favor, and that might make the difference between success or failure.
- No Regrets
A lot of people go through life with many regrets. If you’re someone who has the urge to be an entrepreneur, but fear is stopping you, then you might one day come to regret not making the leap. It might be something that always haunts you as you get older, a grudge you carry against yourself for not being courageous enough.
I actually think this is a powerful reason. More powerful than most. Thinking about the emotional distress and torment that you would have to endure for not being courageous enough is a scary thought, maybe even more so than fear itself.
In fact, the reason Jeff Bezos says he decided to quit his high paying job to start Amazon.com was that he didn’t want to regret not making the leap. He called it the “Regret Minimization Framework”. He simply didn’t want to have a “What if?”.
When you’re an entrepreneur. Time is not your friend, it’s your biggest enemy. Sometimes, if you’re an employee, waiting for time to pass so you can collect your paycheck, or the weekend to come so you can finally relax and destress is okay to do. That’s not the case with entrepreneurship. When you’re starting a business, you’re thinking about your business almost all the time.
You feel guilty enough for not being employed, and want to waste as little time as possible. You learn like a maniac and work until you have nothing left anymore. And you do that every day, and that does do something truly magical for you. It forces you to grow.
You simply cannot afford to be complacent. And if you’re the least bit conscientious, you know it. As months go by, you’ll notice how much more knowledge you’re picking up, how much faster you’re acquiring new skills. Pushing yourself to the limit can bring out the best in you.
This is a big one. When you’re working from 9 to 5 from someone else, your time isn’t yours. In his book, “Millionaire Fastlane”, MJ Demarco describes your time in employment as indentured time – in other words, that time isn’t yours. You’re handing it over to someone else.
The implication here is that you’re automatically putting a ceiling on what your time could be worth. Whatever your boss pays you, divided by the number of hours you put in, is how much your time is worth per hour. It’s rarely a flattering number.
When you’re an entrepreneur, your time is yours. Your upside has no ceiling. How much your time is worth becomes a result of how hard you work.
“If you don’t build your dream someone will hire you to help build theirs.” – Tony A. Gaskins Jr.
It’s hard to force yourself to care about someone else’s dreams, let alone your employer’s. They might have very different values, or they might be assholes. Whatever the reason, you’re never going to be truly motivated to give everything you have. You’re always going to hold back.
Working for yourself will allow you to give 100 percent. You’ll go the extra mile, you’ll force yourself out your comfort zone, you’ll learn whatever skills you need to learn. It becomes a different kind of game. Your mindset goes from “having to” to “wanting to”, and that does wonders for your motivation.
- Helping Others
Whether it’s by being a mentor, or teaching someone valuable skills, or telling someone your inspiring story, being an entrepreneur allows you to help people in many ways. And for many people, that’s deeply satisfying.
You also create jobs. Since it’s almost impossible to do everything yourself, you’re going to have to hire. You’re either going to need part-time employees, or full-time employees, or freelancers to delegate certain tasks to.
The more successful you become, the more jobs you get to create. And while corporate culture may foster a competitive and hostile environment, a startup environment almost always fosters an environment of coordination and teamwork. When you’re only so many people, everyone is really important, and there’s no hierarchy to appeal to, there’s just you and your partners, and you’re going to need to play as a team if you’re going to stand any chance at all.
Why you should not start a business
There are plenty of reasons why you shouldn’t start a business. Here are some of the best that I’ve found.
- The Wrong Reasons
It’s tempting to want to change whatever bad situation you’re in. If you’re you in a job you hate, or you want more control over others, or you have dreams of making millions of dollars and being featured in all big media outlets. A lot of people find those reasons compelling, and that’s not surprising, but they’re all forms of escapism.
You’re trying to solve your problems by replacing them with a new one altogether. Your hate, greed, illusions of grandeur aren’t going to make you successful, they’re going to blind you into thinking you can be successful before you fall flat on your face.
Being on the offensive means seeing an opportunity, and accurately assessing the match between your abilities and requirements for success. And being realistic about the outcome. There might be a lot of people who might think it’s all about positive thinking, and if you believe you will get there, you will. And there are a lot of stories of people who justify how they got there by citing their deep belief in themselves. But that’s dangerous advice for two reasons.
One, it’s very difficult to manufacture belief in oneself. It’s easy to believe in yourself before you start, but it’s a lot harder months down the line when nothing is going according to plan, and you encounter failure after failure.
Two, the people who say they got there because of their positive thinking are hiding the real reasons why they succeeded, partly because they might not be aware of them, and partly because they have a specific story they want to sell (to themselves and to others).
This is the other side of growth. While putting yourself under stress will likely propel you to push yourself to the limit and tap into abilities you never thought you had, the weight of stress can seriously damage your health, both physically and mentally. And that isn’t something to be taken lightly.
Very few people have the ability to balance a highly stressful lifestyle with stress-resistant habits. People are usually consumed by stress, and become emotional wrecks. It’s probably best not to fool yourself that you’re somehow impervious to this.
3. No Social Life
If you’re serious about becoming successful at starting your own company, not only are you going to be stressed out of your mind, but you’re going to have no time for your friends, and it will do damage to your relationships with them. Very few people are understanding of the fact that they no longer are important enough to be in your plans.
If you value being around your friends, or girlfriend, or boyfriend, starting a business will rob you of that immediately.
3. More Demanding Bosses
The second you get a financial commitment from someone else, whether that’s a VC or anyone, they’re going to be your new boss. They’re going to have a say, and they’re going to be demanding. There’s no such thing as a free lunch.
You’re going to have to answer to them. And if you’re not answering to them, you’re answering to customers. Without your customers, you have no business. And anyone who is competing with you is doing everything they can to make sure that their customers are happy. When your customers get word that other customers are getting more responsiveness from a competing business, you’re probably going to have to double down on serving them better.
If you want to start a business because you don’t want to deal with your boss 30 minutes a day, get ready to deal with an endless number of bosses every minute of the day.
4. Failure will leave a Scar
Getting fired from your job is one thing, failing at starting your own company is a whole other thing. When you fail at your startup, you’re the only one accountable. As Nassim Taleb puts it, “You have skin in the game”. That means that you will get hurt, maybe even traumatised.
You might get braver, for sure, but that depends on the person. Some people are resilient in the face of failure, and it propels them to try even harder the next time around. But for many others, failure means the end of the road because they simply cannot handle another traumatic experience like that.
5. You’re Probably Going to Fail
I’ve read many contradictory statistics, and maybe I’ll get into this some other time, but what’s been consistent is that most businesses end up failing. If you can’t outcompete most people in your space, you’re going to find yourself in an unsustainable position, and you’ll close up shop.
In order to be able to outcompete most people in your space, you need to be highly skilled, resilient, knowledgeable, connected, disciplined, and engaged. Not only that, but your timing needs to be impeccable. A lot of great entrepreneurs fail because their product didn’t get there soon enough, or sometimes late enough.
So you need a lot of rare qualities and a lot of luck. It’s not a stretch to say, that you’re probably going to fail.
And, of course, it’s tempting to think that if you stick in there long enough, you’ll succeed, but a lot of people have and don’t. It’s very possible that you end up spending your whole life experimenting and tinkering without getting anywhere.
Here’s what Elon Musk had to say about starting a business:
“It’s like eating glass and staring into the abyss”
It’s hard to know whether or not to make the leap. And I think that’s a good thing. If you’re agonizing over whether or not to do it, then you’re being rational about this.
There are plenty of reasons to want to start a business despite the many risks involved. At the end of the day, any path you take will carry its own kind of risks. Some are much better disguised than others.
I would warn against falling for the hype and being emotional about your decision. It’s important to remember that starting a business doesn’t have to be a binary decision.
You can have a job and create passive income, or you can plant the seeds for your startup idea months before you quit. You can get better educated and learn skills that could help you save time. There’s a lot you can do to make the road a little less bumpy.
It’s important to be careful from listening to people who try to sell you a dream, instead of looking out for what’s best for you
Entrepreneurship isn’t for everyone, and it’s no walk in the park. People should know that. People should be aware of the all the risks involved, and it’s hard to fully understand the gravity of those risks when you’re 22.
Gary Vaynerchuk, someone who’s well known for motivating people to take the leap in most of his videos, might disagree.
I’ve seen him talk to people he doesn’t know (presumably) and make a compelling case for why they shouldn’t listen to anyone and just start. He might have good intentions, but I think that’s dangerous advice, and I would advise people against listening to him without considering the other side of the argument. But even Gary Vee knows that something just ain’t right with how young people are thinking today.
Here’s what he said:
“The notion for people under 25 that starting a company has become going to grad school, has become “I’ve gotta save for retirement”, “I have to buy a home”, “I have to get married”. It has become, like, standard. And I think that’s insane and scary because that is literally like going to the NBA has become standard. Like it is very hard to build a very big business. Like most people never build a business that makes a million dollars. Like 99 percent of people don’t have the ability, or will ever achieve running a business that makes them a million dollars in profit.”