Reality Check: 5 Entrepreneurial Myths Busted
BY Larry Kim
In many ways, starting a business will be nothing like what you expect. One founder reflects on his top five reality checks.
Entrepreneurs spend a ton of time learning about how to grow a business--but not nearly enough time questioning whether they should start one in the first place.
About six years ago, I founded WordStream. It’s a search marketing company with about 100 employees that's based in Boston, and I’m happy to say that we’re doing great. However, I admit that I naively started it with certain expectations in mind that really didn’t quite align with the reality of starting a business.
Here are five ways that my experience in starting and building a company turned out to be nothing like I had expected it to be:
Expectation No. 1: You’ll be your own boss. One of the most common reasons for wanting to start a business is to be your own boss. But generally, if you take on investors as I did, you lose control of the company when you accept the venture capital dollars. And even if you don’t have to take on investors, your customers become your new boss--and they’re likely to be much more demanding than your old boss ever was. I’d argue that there’s actually less freedom and more responsibility involved in starting a business versus having a regular job.
Expectation No. 2: You’ll make tons of money. Admit it: You hoped (or still hope) to make boatloads of money by growing and selling a business. That was one of my end goals, too.
But I soon learned that founding a business creates value that isn’t monetary. I didn’t realize that one of the most valuable aspects of having started a business is the social capital and learning experiences you pick up along the journey. The opportunities I’ve had to meet other company founders and discuss crazy business ideas are invaluable. So though it’s possible that you’ll make tons of money, be sure along the way to savor the insight you gain--about life and work--from the company you keep. It will help you put any failures in the proper context.
Expectation No. 3: You’ll get to do more of what you’re good at and interested in. You might start a business to follow your passion. But as your business grows, you’ll inevitably find yourself doing less and less of whatever it was you started out doing, and focusing more on trying to find people smarter than you are to do a better job than you could have done. Also, keep in mind that even the most fun hobby can easily turn into work when it becomes your full-time job and livelihood. Ultimately, the most important aspect of your job as a company founder is less about doing stuff you love to do and more about building a team, and then nurturing and encouraging that team.
Expectation No. 4: You have nothing to lose. I’ve found that in life, it’s a lot easier to just fly under the radar and keep your goals and achievements--and any failures to reach those goals--to yourself. It’s a way to avoid embarrassment and judgment. But when you start a business, you need to market it, and as a result, you’re putting yourself out there in a very public way. Because something like 80 percent of businesses fail in the first year, the odds are good you could go down in flames. And sadly, some people actually want you to fail. So you do have a lot to lose in terms of your own pride. The key is to stay positive, ignore the naysayers, and learn from your mistakes so that things work out better the next time around. Some serial founders start multiple companies, and look at each company as a learning experience, not a failure.
Expectation No. 5: Your big dream will become a reality. Of all the items on my list, this expectation comes closest to being true. However, I greatly underestimated just how awesome it really is to show up at work and watch your company grow over time, and to watch the dream become a reality. Stuff like getting your first office, moving into a bigger, “real” office, having a company party to celebrate your achievements, getting recognized with an industry award, or even just having really happy customers--it’s impossible to anticipate or describe how great it feels.
Starting a company is a big undertaking. My goal here isn’t to encourage or discourage anyone from starting a business, but rather to challenge you to think more deeply about what’s behind your motivations to start a business. Most likely, it won’t be anything like you expect it to be--but it’s possible that it will be better than you ever imagined.