Being employed in a fantastically sexy industry is going to give you--possibly--a fabulous life. What it isn't going to do--at least for the majority of people--is make you rich.
That's the axiom entrepreneur and NYU professor Scott Galloway has come up with, drawn from his decades of experience building, selling, and analyzing companies.
"If I hear something where I want to put a gun in my mouth, it's that boring, I smell money," he said in our first Facebook Live interview for Radiate. "You wanna open a restaurant? You wanna open a fashion brand? You wanna start a jewelry line? You wanna produce movies? You better have a steady income, because you're not going to make a lot of money and you're going to work your ass off," he said.
The reason why is because everyone wants to be in those industries.
"They're over-invested," he noted. "Careers are like asset classes. When everybody wants real estate, they get inflated, and the return goes down. The industries everybody wants to be in have the lowest return on your efforts because everybody wants to be in them. Which means you have to be amazing just to make a good living."
You might apply this same axiom to the state of entrepreneurialism today. Almost everyone and their mother wants to be an entrepreneur. In fact, I am now one myself.
When everyone piles in wanting to do similar things, seeking out the same angel or venture capital money, it becomes that much harder to generate a higher return. That's why so many people in Silicon Valley and outside are predicting a "winter" is coming in venture capital--eventually, these startups will fail because there are just too many of them chasing after the same money.
Scott, who's the founder of L2, a company that analyzes the digital performance of companies, makes no bones about the delusional state of entrepreneurship. Anyone who wants to be an entrepreneur thinking this will make him or her rich is in for an ugly surprise. He should know.
"We romanticize entrepreneurs and entrepreneurship," he said. "It's not nearly as cool and as rewarding as people would like to think.
"If you have a choice between being an entrepreneur and going to work for a great company, ask yourself: Do you have the skill set to be part of a big company? If you have those skills, on a risk-adjusted basis, you're better off at a big company. They are incredible platforms. My [friend] at Morgan Stanley stayed there for 25 years, and on a lot of levels, in the terms of press and media, I have been quote unquote at least optically more successful. He's had much fewer ups and downs. And economically, we're at about the same place."
Another sign of an entrepreneur, Scott says, is the ability to work 100 hours a week and, at the end of the month, still take money out of your bank account to keep the company afloat, which is exactly what he did building his companies. Ninety-nine percent of the people out there, Scott noted, are not willing to do that.
So if you're even thinking of starting your own company, remember these three tips from Scott:
- Do something as boring as possible
- Be terrible at working for anyone, and
- Be prepared to write $100,000 checks just to have the privilege of working at your own company.
If you're prepared to do all three, congratulations and...good luck.