What Does It Take to Become an Entrepreneur—Psychopathy?
Penelope Trunk is arguably the world's most influential guidance counselor. She pokes, prods and inspires a generation of new professionals who read her syndicated career advice column, her Brazen Careerist blog and her book of the same name. Her works have essentially become required reading for young professionals who want to get ahead in the new economy.
Trunk knows firsthand the pros and cons of choosing entrepreneurship as a career since she herself has started three venture capital–backed companies, leading Income Diary to include Trunk on its list of the "Top 30 Female Internet Entrepreneurs."
Inc.com contributor John Warrillow asked Trunk for her advice for people considering entrepreneurship as a career.
What advice would you have for someone choosing between starting a company and joining the corporate world?
You have to make a choice: do you want to go to work every day feeling safe and having someone take care of you, or do you want your learning curve to be steeper and higher? It's a lot easier to be in the corporate world. There's no upside but there's no downside. It's just peaceful, and who doesn't want peaceful?
You sound kind of down on entrepreneurship, which is strange coming from a three-time entrepreneur. Aren't there some people who should choose entrepreneurship as a career?
There are some people who get fired from every corporate job they have ever had; those people are the entrepreneurs. Another way to know if you are born to be an entrepreneur is if you can't stop the ideas from coming.
What advice would you have for people determined to start their own business despite your warnings?
I went to graduate school for creative writing, and on the first day of school, the professor came in and said, "If there is any other career you can do, you must do it. This is the worst career ever. You make no money, it's high risk, nobody gives you any good feedback, so anyone who can think of anything else to do should get up and leave." I think entrepreneurship is a lot like a career as a creative writer. Relying on supporting a family with your crazy, high-risk idea, and putting all your own money and time into it is insane. So only insane people do it.
Do you really think entrepreneurs are crazy?
There was a great article in the Harvard Business Review that describes how venture capitalists decide who to fund. Venture capitalists are looking for someone who is somewhat crazy—just on the right side of being a psychopath.
Based on the way you have described it, why would anyone choose a career in entrepreneurship?
Entrepreneurship is something that chooses you. I also think we have to make a distinction between venture-backed entrepreneurs and self-employed individuals. Self-employment is just making money on the side, and that's open to everyone. A lot of people can get one or two clients for something they know how to do. They're making money on the side without a corporate bank account backing them or a boss to tell them what to do.
All three of your start-ups have been venture-backed. What advice would you have for a start-up looking to attract an outside investment from an angel or a venture capitalist?
I can't stress enough how crazy running a venture-backed company is. It is extremely high risk. You're always working for someone who could give a shit about how well your business is doing; they just want to know if you're going to exit or not. Creating a business that saves the world and generates enough money to support your family is irrelevant if there is no exit. Venture-backed businesses are a whole different ball game. They are extremely fast-paced because the venture capitalist's return on investment is based on a time frame.
So we should avoid venture capital?
It depends on what you want to do. Do you want your company to get very big very fast, or do you want a lifestyle business? Do you want to work 15-hour days or have an easy salary? Do you want to be on the cover of Fortune, or do you want to watch your kid's softball game? Every 20-year-old will say I want the venture capital, and every 45-year-old will say, "I don't."
John Warrillow is the author of Built To Sell: Creating a Business That Can Thrive Without You, which will be released by Portfolio/Penguin on April 28, 2011.
JOHN WARRILLOW | Columnist | Sellability
John Warrillow is the author of Built to Sell: Creating A Business That Can Thrive Without You and the founder of The Sellability Score, a cloud-based software company that helps business owners improve the value of their company.