10 bad reasons to become an Entrepreneur

Even though my own entrepreneurship journey is on an indefinitely pause, I still love chatting to people who are thinking of becoming business founders. It is always encouraging to learn that even in the current hyper-competitive, over-monopolised business climate, there are still many people who are willing to take the risk inherent to starting a business to bring their ideas, innovations and products to the world. But sometimes these conversations – especially when they are with people in their 20s – give me slight cause alarm. I spent my own 20s bouncing between various new enterprises before re-entering the traditional workforce in my 30s, and with the benefit of hindsight, I can say that many of the very common things that people think are good and valid reasons for becoming an entrepreneur, are, in fact, the wrong reasons entirely. 

You shouldn’t start a business just because:

  1. You want to be your own boss

Look, I’m pretty sure that none of us love being told what to do the whole time. I’m certainly a bit of a maverick myself. But before you decide that you want to be your own boss, ask yourself carefully: what else does your manager do, besides ordering you about and hitting you with a “pls fix” at 7pm on a Friday?

If you don’t know the answer to that, consider: are you able to mentor yourself? Are you able to push yourself and hold yourself accountable? Are you able to accurately assess your own strengths and weaknesses, and find yourself training or guidance to address those weaknesses? How will you perform now that you are no longer supported by organisational structures and/or training programs which are expressly designed to prevent you from majorly screwing up? What will happen now there’s no boss to step in and fix things when you make a mistake?

As it turns out, there is more to being your own boss than initially meets the eye. The freedom is wonderful, but you need to be ready for it. Are you?

  1. You have amazing ideas

Remember the old saying: “Ideas are easy, implementation is hard”. Amazing ideas alone are not enough – they also have to be practical enough to work and people have to really want to buy them. There are countless “cool” and “amazing” ideas that are either economically not viable, do not fill any real consumer need, or both. Seriously – I once saw a blockchain enabled door handle. (Or beer cooler. Or something equally trendy but utterly useless.)

The majority of businesses (including one of mine!) fail because there is no true need or demand for the product, yet the founders are incredibly convinced that there is.

  1. You’re super smart, and Elon Musk, Bill Gates and Mark Zuckerberg are super smart

Newsflash – unless you’re a rocket scientist or a quant finance guru doing incredibly technical work, you don’t need a super high IQ to be an amazing entrepreneur. Not only that, but having super strong book-smarts will not make you a better entrepreneur in many cases. Sure, there are some very well-known, successful and high profile entrepreneurs who are also geniuses, but in the majority of cases, the failure of a business would not have been prevented if only the founder had had 5 or 10 more IQ points.

  1. You worked for a prestigious company

I once met a guy who was convinced that his business would be a success because all four of the founders were former management consultants.  Never mind that they had absolutely ZERO diversity in skillset, no diversity of background, and the exact same business concept had been tried multiple times before with little success. I suggested that they at least hire someone who had experience in marketing, branding, sales or bizdev. Unsurprisingly, he did not take my advice…and I never saw their business on the app store, so I think it’s safe to say that they did not make much progress.

Yes, working at an investment bank, management consulting firm, tech firm or other big corporate will give a really solid foundation, great base skillset, and good work habits and discipline. You probably have a strong worth ethic. These are all useful, but they are not all that is required. Many companies like to seriously push their own hype, sometimes to the point where it’s implied that anyone who doesn’t work for them is some kind of inferior idiot….but never forget that there are many successful entrepreneurs who never worked at Goldman Sachs, Apple or McKinsey. And you will not automatically be a great entrepreneur just because you worked at Goldman Sachs, Apple or McKinsey. These companies do not necessarily give you commercial sense, tenacity, excellent “soft” people skills, creativity, risk tolerance or many of the other myriad of skills that help entrepreneurs succeed.

However, aside from having useful base skillset, there are three major benefits to attempting entrepreneurship after working at a prestigious company – and none of them have anything to do with business savvy.  Firstly, the connections acquired will help your business grow. Secondly, it will be much, much easier to raise Venture Capital money, if that is something you want to do. Finally, and most importantly in my book – it will be much easier to re-enter the traditional workforce if your business fails.  (Ask me how I know…)

  1. You’re OK with taking risks

The ability to take risks is a much-touted “skill” of successful entrepreneurs. But do you know who else took risks? Failed entrepreneurs.

Yes, to be an entrepreneur you need certainly need to be OK with the risks posed to your finances, career, reputation and relationships. But you don’t need to be a dare-devil, and being an extreme risk taker does not make someone a good entrepreneur. Also, newsflash: many people in their early/mid-20s are OK with taking risks. Don’t go thinking you’re so special. You’re far from the only risk taker in the world.

  1. You have a short attention span

You’ve been told that entrepreneurship is exciting, rapidly changing, and a “different job every day”. Surely that should make it ideal for you, Miss Easily Bored? You should be perfect for this kind of job!

Ummm, no.  Yes, the role of a CEO of six-month-old start-up is very different from the role of a six-year-old scale up. However, that scale up will usually be in the same industry or selling the same product as the start-up was, so if you’re the kind of person who is intellectually promiscuous, who is a bit of a polymath, who has many different hobbies and likes project-based work across more than one industry, you may wish to rethink. If you have a tendency to start projects and then abandon them because you got bored (guilty) and something more exciting came up, then entrepreneurship maybe isn’t for you.

  1. You’re creative, or a maverick

You’re so creative that offices and big corporations are just stifling to your free spirit. You’ve a maverick whose company doesn’t appreciate your out-of-the-box thinking style. You should be an entrepreneur.

It is true that many creative types struggle in the dry environment of a big corporation that does not appreciate their talents or style of thinking, but entrepreneurship is not necessarily the best solution. This is because many creative people are easily bored and lack the deep self-discipline required for the boring nitty gritty or implementation that running a business involves. The reality is that most super-creative fashion designers, artists or chefs have business partners for a reason, and that is because being creative and having good business sense are entirely different skillsets. 

  1. It’s a recession, and you can’t get a job

There’s a lot of this about at the moment – giant looming recession and all that. If you’re between jobs, I’m not saying don’t do it…I’m saying that you should think very carefully before you do. Are you really suited to this? Do you have a genuinely good and financially valid business idea? Or are you just bored and despondent because you’re unemployed? (It really sucks.  Trust me, I know much it sucks).

My first job out of a university was at a start-up that was founded in a recession by two guys who had graduated into a horrific job market and thought they had a found a random good product – so why not start a business? It eventually failed, because the co-founders actually knew precious little about the industry, didn’t recognise what they didn’t know, and were terrible with people and thus treated their staff like garbage.

Entrepreneurship is not a stopgap measure. Sure, there are people who start a business during a recession and make a fantastic success of it. Then there are others who run their business for three or five or eight years before realising that they were never really that suited to it in the first place. Look before you leap. Know thyself.

  1. You want to make lots of money

I have a close friend who has many of the characteristics that make a great entrepreneur. He’s whip-smart with a top education. He spent three years at an investment bank. He’s a fantastic presenter, natural salesman, has great commercial sense, an impressively strong work ethic, unshakeable self-belief and the tenacity of my dog when she’s really, really convinced its dinner time. He also loves to make money – so much so, he took some distinctly inadvisable business risks that caused the eventual failure of his business. (Don’t worry about him.  He’s now at a top hedge fund and doing fantastically well.)

Wanting to make money is totally fine and generally a good thing – it does keep you motivated – but if it’s your primary or only reason for wanting to become an entrepreneur, you’re in dangerous territory. People who are primarily money-driven tend to be overly short term-ist, jump from product to product, and take excessive risks. They also tend to be too focussed on squeezing more profit out of their business, instead of thinking about ways that they can provide more value to their customers.

Also, many entrepreneurs make no money initially and have to live on a shoestring for years ­– while watching their peers buy houses and take nice holidays. It’s fine to want to make money, but also you need to get very comfortable with being broke.

  1. You’re 25, and younger people make the best entrepreneurs.

The legend of the Harvard or Stanford wunderkind, plucked from his dorm room by benevolent Venture Capitalists and parachuted to a groovy office in Silicon Valley, is well-worn trope. And there is some truth to it, given the amount of money thrown by VCs at young, male, Ivy-league graduates is both significant and disproportionate. It is true that younger people do produce some incredibly innovative business ideas (although there is a massive survivorship bias in the stories we hear). It is also easier for them to live on a shoestring or sleep on the floor of their office, and they have more time to recover if their business fails. (Don’t aspire to this. Office floors are really, really hard and scratchy, and it is in fact rather difficult to explain to your office manager why you have a Thermorest in your pod.)

However, in many ways, people in their early and mid-20s make terrible entrepreneurs. They are so inexperienced that they do not know what they do not know. They lack the self-awareness required to accurately assess their strengths and weaknesses. They have not had time to establish deep industry expertise and connections. They have little experience managing people. They are overconfident. The vast majority of the mistakes I made when running my various businesses were caused simply by youthful naivety – rather unsurprising given that in women, the frontal lobes (involved in reasoning and risk assessment) don’t reach full myelination until 25 or so. In men, it’s 30.

It’s often assumed that the mid or early 20s is an ideal time to start a business because it’s “better to take risks while you’re young”. And yes, young people are not risking their life savings, their houses, or their kids’ college funds. But young founders are simply facing a different kind of risk – the opportunity to establish themselves in a great career, which is something that tends to happen in the 20s. I have just made the switch back to traditional employment in my 30s, after spending my 20s as an entrepreneur, and let me tell you: it was spectacularly hard. And that was with an outstandingly good undergraduate degree, and an LBS MBA. I’ll be more than five years older than most of the other post-MBA admits to my new firm. My student loan statements make me wince.

In truth, there is no ideal age to start a business. Every era carries a different kind of risk. My advice to younger founders: go for it, but don’t assume you’ll do it better just because you’re young, and be sure to get a mentor or three. And older founders?  You’re never really too old, and in fact there are many advantages to being a mature founder.  Just cover your exit, and don’t go all in.

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I was guilty of a good few of the above, and with the benefit of hindsight, became a business owner at 23 for a whole host of the wrong reasons. It’s perhaps not altogether surprising, therefore, that while some of my businesses did reasonably well – I had a lot of drive, creativity, tenacity and resilience – it turned out to be a poor fit for me in the long term.

That is not to say that if you want to start a business for one or two or more of the above reasons, then you definitely shouldn’t do it. (I think almost everyone who wants to start a business does so for at least one of the reasons I quoted.)  You just also need to have enough of the right reasons. We’ll cover some of those in my next post.