Entrepreneurism Is Overrated
greyenlightenment.com
greyenlightenment.com
A one man consultancy operation is as much entrepreneurism as serving billions of users world wide.
I think we have this misconception that success mean you need to have hockey stick growth on bunch of metrics, anD that you must make your investors 10x return on their investments.
Fundamentally the wrong approach. As an entrepreneur I don't strive to "make money", I strive to learn, adapt, and survive. Money and success depends solely on how well I can iterate those three things.
Beautifully said!
And of course there’s always a boss somewhere, whether it’s the client or the bank or something else.
Yes. To paraphrase Don Lancaster, it's better to get one nickel each from 100 different sources than 100 nickels from a single source. When someone is supplying all your nickels, they begin to think they own you in some way and will dictate how you do business (for instance, by requiring you to work in a particular place and time). When you get one nickel from each, then you are free to get rid of the sources that become overly demanding.
Yea, this guy doesn't get what it means to be an entrepreneur. It is not just about the money. It is an itch that has to be scratched. It is an addiction. Only real entrepreneurs feel that itch. The rest are wantrapreneurs.
Entrepreneurs create something of value. They create a product/service that solves problems. The problems can be big/small but a business cannot exist if it doesn't solve a problem. They love creating teams and putting a bunch of people together to achieve something. Big or small. Unicorn or bootstrapped. Doesn't matter. What matters is that they created something that will exist for some time and leave a legacy (hopefully). Entrepreneurship has nothing to do with just making money or compounding or playing it safer. It is in fact complete opposite. Getting rich as an entrepreneur is literally a side effect. Yes, that is one way to get rich as well but if you just want to be rich with minimal risks, there definitely are better ways.
So yes, it is overrated for those who really don't have the itch. Like I said, you can make good money doing many different things and probably with better probability. But that is not what entrepreneurship is all about. Not even close.
Nice gatekeeping. There are plenty of entrepreneurs who are doing it for purely the money.
Implies that people that do it for only money are 'fake'. This is the gatekeeping part
That said, I've known and worked with a shedload on entrepreneurs over the decades, and I honestly can't remember a single one that was doing it purely for the money.
In my experience, people who are driven purely by money avoid starting businesses. They tend to invest in startups or get great-paying jobs in established businesses.
I think the reason is that starting a business is a high-risk activity that will consume pretty much all of your time and energy. You need to be driven by something more than just money in order to be willing to do that.
If you're just about money, there are much easier and lower-risk ways of going about doing that.
This is so ridiculously untrue. There are so many businesses you can run that are almost impossible to fail. There are so many failures that are actually just "OK" in that they break even or lose a little money or whatever but don't actually cause you any problem to wind down.
You have to have a certain personality type to do well as an employee and you need to fit a certain mold that employers demand. As an entrepreneur you just have to give your customers and clients what they want and nothing else really matters. You do not even really need many employees to make a very good living doing a whole lot of different things.
If anything, being an employee is overrated particularly when people have career instability in midlife. Unexpected expenses like divorce and medical crisis often hit employees and people in general very hard because it both makes them less employable and disrupts their retirement plans. As soon as an oldster has a major gap in their resume, their ability to continue to ride on the employee gravy train diminishes by a massive degree.
No doubt you can live well on a good salary and investments, but it is not the best option for everyone nor is it the only option. It is the best option for a certain kind of personality but not for everyone. I know people who dream of starting businesses but are employees but all their side projects suck and don't go anywhere in part because they are just not suited for independent business.
Can you give examples of some of these businesses?
Really, what type of companies are those? I've always seen the comment of, "there are so many more ways of making money than X" without the actual proposition of said companies. Hell, even Sam Altman said it in the Stanford Start-up class, but didn't give any examples.
Pubs have to deal with liquor licenses, rowdy clients, high staff turnover, and very high rents to be anywhere other than a dive.
Bakeries have extremely high turnover, razor thin margins, expensive equipment, large kitchen, odd hours, and significant hours
Gas stations are all franchises. It is notoriously difficult to make money on a franchise (e.g., you might make 30 or 40k a year take home) and there are huge lists of things that a franchisee can be penalized for. Plus you are hiring the least educated staff on earth and have to deal with all that shit.
Compared to white collar work, which can pay 4-8x what you'd make doing any one of these, for a fraction of the headache.
"Pubs close at a rate of 18 a week as people stay at home more" (BBC: https://www.bbc.co.uk/news/business-45086080 ).
As for "well placed gas station" that's factored in in paying enormously for the location.
As an example, the moving business. The current rates are north of $100/hr. They pay their workers minimum wage. They are run by non-techies who drive inefficient ops.
Remember that you can always find reasons to NOT get into any business. Successful entrepreneurs are the ones who have the persistence to tackle problems and find creative ways to solve them efficiently. And, those creative solutions often won't be apparent until you pick an industry and dive in.
The failures I saw left people in worse positions than being let go - they had to fully retool themselves and find a new career with little in savings. Those new careers ended up being stable, high paying, traditional jobs. The poor insurance situation (at the time) left otherwise functional families begging to help get kids through medical issues.
What would those be, because from SV style startups (where the rate of fail is atrocious) to small businesses like funeral services, coffee shops and restaurants, most businesses fail.
This is so ridiculously untrue :). Not a single business is easy. You can’t just coast and get break even. You have to slog from day to day. And if you’re not growing, you’re shrinking. I know that’s not a popular thing to say these days, but I believe that to be true even apart from the wild excesses of capitalism. In a free market, if you’re not constantly reinventing to keep people engaged, no matter what your business, you are going to fail soon enough. People get bored and move on, even if you’re laying golden eggs, people will get bored.
What happened to growing a sustainable business around the craft you believe you are good at?
What do you mean "no"? Being self-employed is pretty much the definition of "entrepreneur"
(In that vein, almost all enterprises failed, the second coming of the innovation is where things usually happen. Or later.)
I mean... Go to any coffeeshop in SF and eavesdrop on the derps talking about their big ideas. "It's like twitter mixed with grindr... But for Lyft drivers. I'd tell you more, but I'll need you to sign an nda."
If your only metric for success is money and you aren’t particularly creative that’s almost certainly true.
If you live in New York and have wandered into the wrong bar or dinner party a couple times you’ll find this sort of self-satisfied pseudo-intellectual rant from a young finance guy pretty familiar.
If all you want to do is make money and you're a smart quantitative graduate from a good school, go into finance, because the expected value there is higher and less volatile than building the next unicorn.
The value systems of these young graduates in New York and SV are one in the same -- they are both people who primarily value money. But, the Silicon Valley kid is the one who's wrong about the best solution.
Now, if you're a fresh college grad who values things other than money, like contribution, autonomy, creativity, innovation, etc., then startups are a better fit.
We can sit here and make value judgments, but in my experience, it's impossible to change someone's value framework when they don't want to. So, might as well point them in the right direction.
Yeah, if you come from a good school, got a job with no experience and a degree with no loans, and you are 'smart', you can easily become a millionaire. I'm sure all 3 people with these qualities are thanking you right now.
Actually, you will not become a millionaire within 4-6 years of graduation. That's ridiculous.
Graduates do not get paid 250k p/year. Not even in finance positions. And reliable stocks are too long term of an investment to expect a payout in 4 years with no risk. You live in a fantasy world, sir.
You’re right. They make more when you factor in bonuses — in some cases double that.
I’m guessing you aren’t in the industry or have an outdated perspective. In recent years, the competition for ML talent at hedge funds has become fierce and compensation has skyrocketed.
(quantitative analysts do not differ much from this in salary, but youre being to vague with your job titles so im not sure what you mean)
Either way, you are ridiculous. Unless this magical position requires more advanced knowledge in which case your claim about it being a simple "finance" position is wrong. Not even true in machine learning either. At this point it's no longer a straightforward and safe career path like you said it would be. Maybe you misunderstood and thought we were talking about PhD graduates. My point still stands.
Please, please, do not mislead people down career paths.
The typical track is 2 years as an analyst @ $200K/year and then 4 years as a senior analyst @ $750k/year. Do the math.
[0]: http://www.streetofwalls.com/finance-training-courses/hedge-...
[1]: https://news.efinancialcareers.com/us-en/266401/the-salaries...
If failure is defined as going out of business, and success is defined as surviving, then the real five year survival rate for new businesses is ten times higher than the author has written.
https://www.fundera.com/blog/what-percentage-of-small-busine...
That said, a business that is alive for 5 years and not running on VC funding for that time is probably sustainable in medium term.
No doubt many successful entrepreneurs have a goal of wealth in mind, but for what aim? I can justify my efforts at financial independence to live freely and not to live under any conditions which compromise my personal ethics, as one priceless example.
Unfortunately, I've come to think that investing in the stock market (especially index funds) is unethical because it gives more power to corporations to lobby for regulations which will further distort the market, increase centralization and increase failure rates for small businesses. It's a vicious cycle, a self-fulfilling prophecy. Without mega-corporations, small businesses would have a much better success rate and consumers would benefit.
Blindly investing in the S&P500 is just feeding the corporate machine. You're giving real money to real companies and you don't know what they're doing with it. In my view, large index funds should be outlawed completely.
You're really not. You're more than likely buying some other investor's shares. Companies aren't constantly raising money on markets, if they did, shares would get incredibly diluted. Almost all volume is between investors.
Further, I don't think it's that uncommon for entrepreneurs to see the employer-employee relations as the following:
- being an employer is a status in which you take risks
- being an employee is a status in which you avoid risks
Blaming the other for their current status is dumb, regardless of on which side you are.
https://en.oxforddictionaries.com/definition/entrepreneurshi...
Do you consider making a profit as opposed to making a loss to be equivalent with "getting rich"?
Do people have a right to be paid for their work that benefits others?
I think people working for equity as part of their compensation would disagree with you.
Personally, when I've been (as I am now) an employee that has received equity as part of my compensation, the fact that I'm receiving equity doesn't make me feel that I'm taking a risk. In terms of my daily thinking, I don't even count the equity position at all -- at best, it's pure gravy. The only thing I really count is the actual money I'm paid.
Unfortunately starting around the first Internet boom a ton of people showed up here feeling differently and it really fucked things up.
> just get a 6 figure job and invest in things created by entrepreneurs because the market is only going up, up up. But don't be an entrepreneur yourself.
Y'all got any of them 6 figure jobs lying around back there?
For a 24 year old? One with job security, so like series C or later? I want to get paid, but not take any risks.
There is no such thing.
100k is north of entry level but certainly not a senior paycheck in Denver. If you can explain blue/green deploys, know how http works, and can use terraform to build out a "best practices vpc" then all you really have to do is tell recruiters that and they'll get you lined for interviews where the hiring manager won't balk at 100k.
It feels like there are Devops and Security hiring managers all around who would love to talk to you.
The short term (10 years to retirement) plans are not going to work if there is another global recession, especially if it's a prolonged one. And this time around there isn't much firepower left for financial manoeuvring (QE+lower interest rates)
Drop the pomp and just be what you are. I'm not an entrepreneur, I'm a software engineer that runs a tech startup that is creating a new type of media. That actually tells the person what you are doing. Other professions describe what they do. A lawyer, they practice law. A doctor, they keep people healthy. A chef, he cooks food. An entrepreneur... a well, I run a business. Why? what does the business do? what do you do? Running a business can mean so many different things (ok, sure there are all types of lawyers and doctors too, so I can play devils advocate to my own BS).
But seriously, why do we need this word? I cringe when anybody calls me an entrepreneur, and I recently agreed to be on the panel of a tv show about new media. I got there to find out the show was called "The Entrepreneurs". I cried...
No, I say "I run a software company".
Potentially for the podcast and self published author, those are both highly saturated niches. But I don't believe that's the case for Amazon sellers. I know many people who make 6-7 figures a year profit on Amazon, well above minimum wage.
I'm doing electronics and toys and have done as much as 500k gross in 30 days at peak.
Other people buy from stores at discounted prices, or any number of different sourcing methods.
The article suggests being able to save 89k per year. Under reasonable assumptions, 7.5 years of saving at this rate will support an income of 31k / year (the median US salary) for the rest of your life, leaving you with ~50 years of runway for whatever else you care to do.
This is especially interesting if the thing you actually want to do is something that is valuable to society but not profitable eg maintaining free software or raising a child.
https://networthify.com/calculator/earlyretirement?income=12...
For example, I can take the $200k in the article, build a small restaurant, and expect it to do $500k-$1m in revenue per year over the next decade. Given good management and a reasonable lease, it'll net 10-20% per year, plus pay my salary and those of a few other people.
Hair dressers, landscapers, any construction really, and lots of other industries benefit from entrepreneurs. Yeah, moonshot tech companies usually fail, but that doesn't mean "entrepreneurism" is overrated.
The author here is clearly defining "successful" as "wealthy". That means that he isn't talking to entrepreneurs like me, though, as I define it rather differently.
There is a BIG difference between what is called "small business" and "startup". Small business doesn't scale, while startup starts small, but it can scale globally and create better moat ( scale, network effects, brand ).
People here are interested in startups, not small business.
Tech entrepreneurism is actually underrated since nowhere else do you have low starting costs, global audience, low marginal costs etc. ( https://signalvnoise.com/posts/3324-commercial-freedom ) .
Never tell me the odds.
Here's how an entrepreneur would look at those odds: they mean that I only need to start 20 companies to have one be a success.
If you are in one swoop starting your first business to share your major passion in life with the world there is a good chance the near inevitable failure will be the end of your entrepreneurship. If you realize that is an almost guaranteed part of the journey you might keep trying.
I want to see the stats on failed entrepreneurship where the person gives at least 5+ good attempts.