Facts About Entrepreneurs That Will Likely Surprise You
onstartups.com
onstartups.com
(Bogus because the surprisingness comes not from the numbers themselves, but from confusing the concepts of entrepreneur and startup founder. The first paragraph is a prime example.)
Found this: http://news.ycombinator.com/item?id=728689
Now, I will at least know what pg is referencing. I still won't know what other commenters mean by a 'startup' unless they are synced up on this too. I wonder how you can fix that?
I'm not putting people who start those types of businesses down. Please don't try to make it sound as if I am.
The article was about entrepreneurs. It was not about your idea of startups. Your comment was defending a concept not present in the article.
I've never liked the word "startup". Ontologically it means that something's begun. I don't feel comfortable assigning more meaning to the word than that, though the connotations have been assigned.
Imagine an article on a web site about the NFL that began "When you think of a football player, you probably imagine someone six foot five who weighs 250 pounds. But a new study shows the average football player is actually four foot eight and weights 80 pounds." Because the average football player is actually a little league player.
So yes, the study described in the article is about founders of small businesses rather than startups (in what you call my sense, meaning the generally accepted sense of the word). But what makes it misleading is that it appears on a site about startups, begins by talking about examples of startups, and then claims it's surprising that people starting small businesses have different characteristics. It's not surprising at all that the average person opening a gas station or starting his own landscaping company is 40.
On one hand, we have loads of unemployed well educated young people right now that can afford to risk their time. These may be more likely to seek seed capital? Go big or go home models?
On the other, we have loads of seasoned industry vets with stable lives and cash in the bank to make a go of a new IT business. These may be more likely to start with one or two paying clients? Steady growth models?
The respondents' businesses probably attract low-risk bank credits instead (i.e. the money entrepreneur must pay back at some point). This makes things different. Those businesses are probably into retail, or consulting, or something similar; the potential leverage is lower there. And these are not the sort of businesses that get most of the attention on HN.
Club Penguin was a tech startup that sold for mid-nine figures without raising any VC. Mahalo actually seems more like a plumbing company than a tech start up in a weird way, but has raised VC from top tier firms.
The big distinction is building a business that can make you money while you sleep. something that can scale beyond the hours you work vs. being constrained by billable hours or their equivalent.
At some level, all taxonomies break down, but startup vs small business taxonomy isn't very strong to begin with.
Paul the only people confused between the concepts of entrepreneur and starup founder though are people that think all entrepreneurs are startup founders. :)
I'd say that's a "Valley" focused viewpoint, and it shows a lot about how insular "Valley" thinking can be. I don't think it's a bad thing to be reminded that "Start Ups" are a small sub-segment of the entrepreneurial path.
The Valley wants you to believe you've disqualified yourself once you've found a steady income, even though your business might follow the exact same trajectory as Dropbox once you find the right knobs to turn.
From http://www.paulgraham.com/startupfaq.html:
How can someone start a startup if they have a family to support?
The best plan might be to start a consulting business that you can gradually morph into a startup. This way you always have a source of income. See How to Fund a Startup, especially the section labelled "Consulting."
So what exactly are you saying I'm mistaken about? Can you give me a specific sentence I've written somewhere that you believe is false?
First, this is what you actually have to say about consulting companies:
But isn't the consulting company itself startup? No, not generally. A company has to be more than small and newly founded to be a startup. There are millions of small businesses in America, but only a few thousand are startups.
So, first, whatever it is you actually think about using consulting services as a vector for getting product to market, you explicitly define those companies out of startupdom --- both by answering "no" to the question of whether they're startups, and by supplementing your definition with "small and newly founded".
Second, while you're kind enough to suggest that consulting might be a good way to start a company for those of that have families, the majority of the "consulting" section of the essay you cite consists of warnings about the perils of consulting.
In fact, you're even more explicit in another essay:
This one is real. I wouldn't advise anyone with a family to start a startup. I'm not saying it's a bad idea, just that I don't want to take responsibility for advising it. I'm willing to take responsibility for telling 22 year olds to start startups. So what if they fail? They'll learn a lot, and that job at Microsoft will still be waiting for them if they need it. But I'm not prepared to cross moms.
What you can do, if you have a family and want to start a startup, is start a consulting business you can then gradually turn into a product business. Empirically the chances of pulling that off seem very small. You're never going to produce Google this way. But at least you'll never be without an income."
Or, how about "Ramen profitable", where you say:
Is there a downside to ramen profitability? Probably the biggest danger is that it might turn you into a consulting firm. Startups have to be product companies, in the sense of making a single thing that everyone uses. The defining quality of startups is that they grow fast, and consulting just can't scale the way a product can. [3] But it's pretty easy to make $3000 a month consulting; in fact, that would be a low rate for contract programming. So there could be a temptation to slide into consulting, and telling yourselves you're a ramen profitable startup, when in fact you're not a startup at all.
(Same essay: "it's OK to do a little consulting work at first".)
But whatever! Whether you hold consulting companies in equal esteem with shoot-the-moon product startups is beside my point, which is simply that I don't think think it's reasonable to classify companies principally by whether they are small and recently-founded. Have you ever seen 37signals offices? They're a startup.
Please, please, just explain what statement of mine you're cleverly refuting here.
You're calling out the results on the basis of "confusion", when Dharmesh clearly addresses this within the post itself. The article doesn't even contain the word startup at all.
I still fail to see how his very clearly labelled examination of how the average entrepreneur is very different from the average Valley start-up is causing so much confusion.
Example from this article:
4. More than half (51.9 percent) of respondents were the first in their families to launch a business.
11. Entrepreneurship doesn’t always run in the family. More than half (51.9 percent) of respondents were the first in their families to launch a business.
Just look at Twitter. So many tweets are retweets of what someone else said.
"2 things you didn't know about entrepreneurs" sounds less interesting/professional/worth reading that "10 things".
Up where I'm from, entrepreneurs are typically middle aged, financially stable, and breaking ground on their new business because they've been working toward it their whole lives.
I work with entrepreneurs daily in my consulting business, and it's extremely rare, outside of real estate agents, for me to work with someone under 30 to 40 years of age, with a family, who just started their business.
Why do all these blogs constantly think that all "entrepreneurs" == "startup". Get out of your box!
the converse of this is more surprising. The ball-park null hypothesis is that only 0.29% (290 for every 100,000 individuals) should come from family with history of entrepreneurs - but observed figure is ~50%. From this one should conclude that entrepreneurship does run in families.
A single data point to be sure, but it does lend credence to the idea that losing health insurance is a significant factor in people not quitting their jobs to go out on their own.
All this verifies is the existence of the silent majority of older, more experienced founders.
This may be partly due to the fact that if your parents own a business, you're much more likely to work for them or inherit the business (than if they don't). Your parents or some other family member owning a company just gives you an extra option that might make starting your own business seem less attractive.