More startups fail due to people not taking the leap than for just about any other reason. Deciding to quit a steady job is hard, especially if you have a family, a mortgage, or other obligations. If you're not in or fresh out of college, one of the best ways to get a taste of what a startup is like is to join an existing one. Big-company employees and executives often have the most difficult time adjusting to the reality of a startup.
Entrepreneur A always wanted to start his own company. He was often described by peers and managers as one of the most entrepreneurial people they had worked with. But something held him back. As a child, his family had struggled to make ends meet, and his parents had indoctrinated into him that getting a good-paying job at a large company was the way to go. After college, he immediately went to work for a big, established tech company where the salary was good but the upside was limited. He kept thinking about starting a company, but each time he almost made the leap, something prevented him: a tumble in the stock market, discouragement from his family about pursuing his dream, the pull of obligations and comfort of a steady salary, or the promise of promotion at work that he used as a justification to stay put.
Some years later, Entrepreneur A, now supporting a family and paying a mortgage, finally made the leap to start his own company after the big tech company where he had worked for so many years was reorganized. He agonized that he wouldn’t be able to pay the bills and support his family, and yet this change had an incredible effect on him.
He pursued his dream with absolute focus and the determination to make it a success.
Not raising money, recruiting a team, and acquiring customers simply wasn’t an option-he had to make his startup a success. As a result, he did.
There is nothing like self-motivation when starting a new venture. I wouldn’t wish being broke on anyone, but from the perspective of someone starting a new company, if you’re broke, you’ve got nothing to lose and infinite necessity. As a result, you’re willing to take all the risk in the world. If you’re rich, you can invest your own capital and probably convince other people with capital to put in money alongside you. Some investors will question your drive or ambition. The flip side to that, of course, is that having made some money, there’s a good chance you want to make more.
Being neither rich nor poor may be the hardest starting point of all. A steady income and a comfortable lifestyle, combined with ongoing obligations, may make the prospect of ultra-high risk-taking daunting.
And then there is the prospect of a long period of time without work-life balance. People ask me about work-life balance and startups. They don’t go together. There are jobs that can support work-life balance, such as lifestyle small businesses. But doing a startup isn’t one of them.
I grew up working and helping to pay my family’s bills. I shoveled snow in the winter, cleaned the school pool in the summer, and started writing software programs because it was a lot more fun and paid better than either of those other activities.
Even when I’m “not working,” I’m working. Perhaps it runs in my family. My grandparents immigrated to the United States-they had no choice. When they got here, they were flat broke. Starting a business was their only option. They worked all the time to make ends meet and create a life for themselves and their family. Against the odds, all of their children went to college, and most of them went on to graduate school. Three of them became entrepreneurs in their own right.
Entrepreneurs are workaholics. They’re obsessive about their products, users, and customers, and they work to fulfill that obsession. Those who are rich enough to retire build more products, start new ventures, and continue to try to change the world. Just look at Elon Musk, founder of PayPal, electric-car company Tesla Motors, and space exploration company SpaceX. Or consider Steve Jobs, founder of Apple, NeXT, and Pixar.
If this isn’t your frame of mind-work as long as it takes and succeed at all costs-you should seriously reconsider launching a startup. You’re likely to get part way into the endeavor and then fail for lack of desire to out-odd the odds.
But, that said, there is no better time to start a new company than right now. Dozens of people, when I asked why they decided to start something new, gave me the same straightforward answer regardless of age: “I realized if I didn’t do it now, I’d never be able to do it.”
Build a Big-Idea Company — Not a Company of Ideas
Before starting my first company, I spent a lot of time at Starbucks with my soon-to-be cofounders, brainstorming possible ideas. It was 2000, and although we knew mobile was going to be big, we weren’t sure what we could build that would take advantage of the market trend. The devices of the time were archaic compared to today’s smartphones, and we felt extremely limited by them as a result. We knew we wanted to build something on the device, but we weren’t sure what.
Every month, and sometimes every week, we tried a new idea. In some sense, this was good, because it enabled us to test a lot of ideas quickly without getting overly invested in any one of them. We pitched our company at angel events and to various investors, but we didn’t yet have the big idea — the catalyzing vision, articulated clearly and succinctly. We knew it, and they knew it.
As we were building our mobile web pages and applications for sending messages, however, we started to notice a trend. The pages weren’t displaying consistently, and the messages weren’t going through reliably. For a while, we were convinced the issue was our software.
To figure out what was going on, we built an automated service for sending and receiving text messages and checking the validity of mobile web pages. It turned out it wasn’t our software that was the problem-it was the wireless networks and issues with the devices themselves. A lot of other people were experiencing the same issue and were willing to pay us for the monitoring and data our rudimentary service provided. Finally we were no longer a company of ideas, but a big-idea company. That project became the company, and the solution we built ultimately became Keynote Mobile Solutions.
Many people find coming up with new ideas for companies challenging. Faced with a blank sheet of paper, they realize they’d rather be iterating something that already exists. Coming up with the one right idea can be even more of a challenge.
Big ideas come from a founder’s personal need to solve a problem, a wish to generate income, an overwhelming desire to transform a large market, or all three. Jeff Bezos is said to have written the business plan for Amazon.com on a cross-country drive to Seattle after worrying that he had missed out on the Internet gold rush. Pierre Omidyar created eBay after experiencing first-hand the inequalities of financial trading markets. Marc Pincus started gaming giant Zynga after playing video games and becoming frustrated that they weren’t more social.
People have told me over the years that they would start a company if only they had a great idea. My response to them remains the same. Great ideas are right in front of you. If you don’t have one, partner with a cofounder who has a great idea, or join an existing company. Many great operating executives would readily admit they’re far better at scaling up companies than brainstorming new ideas from scratch.
A startup is a highly passion-driven and irrational endeavor. If you feel no passion for an idea or market, no overwhelming sense of desire to find a solution to a problem you’re facing or to transform a market or the entire world, don’t start a company.
Most company ideas are simply not big ideas. They’re lifestyle businesses or small businesses. They can satisfy your personal lifestyle needs or generate an income, but they won’t scale into big companies. The difference often comes down to goals and ambition: the desire to run your own scuba-diving school versus creating the leading dive school with franchises around the world; running a local bed-and-breakfast versus starting Hilton hotels; opening a local café versus creating Starbucks.
Big businesses start out as little businesses. The difference between those that scale and those that don’t often depends on market opportunity and personal ambition.
If you’re a technologist, perhaps you just want to build a piece of technology and flip it to Google or Facebook. That may be good for your bank account, but it won’t result in a large company. It takes the same amount of work to build something big that it takes to build something small; the level of ambition, types of personal fulfillment, and skillsets required, however, are different.
What is clear is that although it’s possible to start a company when you have lots of ideas, building a great company requires a single overarching idea: the big idea.
Pierre Omidyar was working on multiple projects before eBay became the project.
Marc Pincus started several other companies before finding his calling as an Internet entrepreneur. Keep searching until you find the big idea.
WHY STARTUPS FAIL AND HOW YOURS CAN SUCCEED
AUTHOR: David Feinleib
PRICE: Rs 299
From Why Startups Fail, © 2011 by Dave Feinleib and published by Apress, a division of Springer Science + Business Media. Used by permission. http://www.apress.com/9781430241409.