I thought Jack Britain, Dean of the David Eccles College of Business at the University of Utah, made some good points about entrepreneurship in his presentation that was covered in Utah Business magazine. His main point? Don’t do it.
Most people who hear that the average business owner spends 80 hours per week at work and only has a 15% chance of making their business succeed lose all desire for being an entrepreneur right there. But just as Jack says, the typical entrepreneur isn’t deterred, because they believe they’re going to be the exception. This was certainly true in my case, and I think the only thing that has prevented my firm from going out of business has been a reluctance on my part to give up. No matter what has happened during the past 6-7 years I’ve always felt that if we could just make it past a certain point then we would be ok. That has turned out to be true, although there certainly have been more of those points than I ever expected.
I found some humor in the comment “Get feedback from disinterested parties who have a mean streak and are slightly sarcastic” that Jack made. For me, that person was Joe Ollivier. When I was a student at BYU and wanted to start a business someone recommended I talk to Joe, which I’ve done many times over the years. I know people have all sorts of opinions about Joe, but I like the guy. Why? Because he’s mean to me, in a good way. That is, he tells me what he thinks of my ideas, and what he thinks generally isn’t positive. But it’s that type of feedback that helps me make my ideas better, or quit them altogether, and so why shouldn’t I be grateful? If someone tells me I have a great idea and then I go and spend two years of my life and hundreds of thousands or millions of dollars and end up losing it all because the idea was junk, what good does that do me? Who’s really the nice person? The guy who tells me something to make me feel good even though it may not be true, or the guy who points out my mistakes and prevents me from making more?Liked it? Share it!
If you’re goal is solely financial success, then I guess “Don’t do it” would be the wise choice. Something tells me a majority of entrepreneurs do what they do for reasons much deeper than just money, however.
In many ways, “Don’t do it” seems like a very cliche business thing to say. What’s worse is that it usually comes from a lot of successful businessman (or at least ones turning a profit) which I just don’t get. In the June 2006 issue of Connect Magazine, co-founder Arkin Hill had this to say regarding the company’s long road to profitability: “If anyone tries to do what we have done, I will be the first to tell them to walk away. I will be the first to say the idea is crazy and very risky.” So maybe Mr. Hill is doubting his approach. Fine. But then why does he continue by saying, “I will forever be glad we took the risk.”
If that’s not contradiction, I don’t know what is. Rather than simply saying “do” or “don’t,” how about serving up the pros and cons of entrepreneurship so that the prospective individual can make an informed decision based on their personality.
Even if the reason I got into running a business for the money, which isn’t the case, it most certainly is not why I’ve continued to run a business. It does go much deeper than that.
I bet there are a lot of entrepreneurs who would also say “don’t do it” who have never been successful, but you generally don’t hear speeches from the entrepreneurs who haven’t had at least one success.
In my situation the reason I say “don’t do it” is because I’m positive that anyone who hasn’t been through it has little, if any, clue what they’re getting into, and sometimes I doubt whether I would go through it again if I had known the cost. Although at the same time I can’t imagine doing anything else. It’s something of a paradox I suppose. Since I know Arkin relatively well I’m 99% sure he’s got the same perspective.
I think a lot of successful people give “don’t do it” advice because they know how hard it is to succeed, having done so only as a result of tremendous personal sacrifice. Most people aren’t prepared for that kind of sacrifice, and this wise voice of warning will deter them from making decisions that will ultimately make them unhappy. The ones who are prepared to sacrifice will ignore the warning anyway, but at least they’ll know what they’re getting into.
As far as “Getting feedback from disinterested parties” goes, I couldn’t agree more. I believe that a little negative feedback can go a long way toward preventing failure, and that those who don’t invite criticism are essentially saying that they’d rather be right than successful. Of course, they’re still not right most of the time –they just don’t have the luxury of realizing it until after they’ve failed. 🙂 I wrote about my views on encouraging all kinds of honest criticism here:
Thanks for the good post!
“The guy who tells me something to make me feel good even though it may not be true, or the guy who points out my mistakes and prevents me from making more?”
I suppose both of these types of people are good to have (at least moreso than no one) because either way you go, you get feedback and this grows your experience. I like to look at this in another light – if you DO fail, you gain invaluable experience that you otherwise wouldn’t have gained if you didn’t opt for the idea at all. So, IMO, whichever way you go, you will still get valuable feedback… albeit sometimes later rather than sooner.
Nice post btw..
I’m new to this blogging site and this blog was the first one to catch my eye.
As a young entrepreneur with my husband, we have a lot of risk involved with neither of us receving a steady paycheck. We are still in the hardship phase of building a business, only being in business together for 2 years now.
I think that because I am in the middle of the “hard times” and not explosively successful yet-and i do stress YET, that I am able to give my best honest answer to the question.
When I find someone who wants to get into the video production business (now with cameras costing so little who doesnt!) I let them know that they will work for free, or at least dirt cheap. You will wonder how to pay your next bill or when you next night of sleep will come. It is a hard life, but if doing this business is a passion that you can’t let go of, if challege is a thrill and you thrive on creativity, finding out clients problems and solving them, then go ahead.
As long as you don’t expect to get rich, as long as you don’t expect to be the exception, then you will work your butt off and things just might work out.
Great post, can’t wait to read the rest!
I must say i found the article interesting, but I have to STRONGLY DISAGREE about not going into entrepreneurship. Let me explain, In an ever changing world when employers are constantly changing the game rules for the sake of profits and their own self-interests, when are people gonna realize that no one AND I MEAN NO ONE is a permanent employee anymore. Haven’t you learned your bitter and painful lesson on the treatment you got from employers as a result of your hard work, dedication and simply being a good worker? It seems that many people this day and age are getting kicked in the teeth for doing the right things and simply playing by the rules. Companies now and days don’t really have much incentive (if any) to pay people what they are worth, gives raises and provide benefits when outsourcing and much cheaper labor are available. When workers are constantly faced with these issues including layoffs, age discrimination and the like, what are people suppose to do? They can’t depend on employers anymore. They don’t know from one day to the next if they are gonna have a job. They can only job hop so much. A scary thought to say the least. And if they have families, then it’s much worse. What we are witnessing is a large number of people who are really, really worried about making it to retirement, if there’s any retirement to be had. That said, I think it comes down to this: if we are going to achieve the American Dream and live life to the fullest, the only way i see that happening is thru entrepreneurship or some form of self-employment.. Because let’s face it, the 40 hour a week, 40 year career jobs are LONG, LONG GONE! We must think differently now. Our society has been brainwashed into believing to succeed in life, you need to get a good education, get a good job and work hard. Well people have done that and look what they’re getting in the end, THE SHAFT!! (REMEMBER ENRON FOLKS????) Lastly, I would like to say while I firmly believe entreprenuership is the answer, the trick to succeeding at it is to offer a product or service people need and NOT what they want, providing it in such a way that your competitors can’t compete and you’ll make money in ANY economy, good or bad. Those in power understand this very well. Because in the end, regardless of what you are promised by a company or whomever, when it comes to your survival and livelihood, plain and simple, YOU ARE ON YOUR OWN!!!!!! This my view. If anymore disagrees, I would be strongly interested in hearing from you. Just my opinion. PHIL
Well, of course my article is somewhat tongue in cheek, because I’m an entrepreneur and glad for it, but hopefully the article is a warning to those who believe going into business for yourself is a panacea that makes life easy. It’s not easy, it’s dang hard, and most people fail. What I would like to see is more people succeeding at entrepreneurship because they recognize the risks and are intelligent about what they do and how they do it. But if they’re going to take their $100K in savings or borrow $250K only to go out of business and lose it all or be stuck in massive debt then don’t bother–keep your day job.
That said, I’d like to provide an alternative perspective on some comments you made, although I agree with most of them.
1. What is a job worth? Maybe we’re arguing semantics, but I believe everyone gets paid what they’re worth, because a job is worth whatever has to be paid to get the job done. If someone is in a job that pays them less than they think they’re worth, they should blame themselves, not the employer. If an employer says “I’ll pay someone this much to do this job” and somebody accepts that offer, how is that the employer’s fault? If you don’t like what you’re getting paid, go find someone who’s willing to make you a better offer. If enough people do this, then employers will have to offer more in order to get anyone to accept their offer. You are worth what you’re paid, otherwise you wouldn’t do it.
Of course there are two ways to look at this, and perhaps what you’re really saying is not that people aren’t paid what they’re worth, but that they’re not paid well.
2. Companies don’t have an incentive to pay people what they’re worth (i.e. well). Even if this is your real point, I still disagree, at least based on my own experience. I’m sure there are plenty of people in the country who are not receiving what most of us would consider reasonable compensation for the jobs they do, but I personally don’t know who these people are. The people I see are getting paid pretty darn well.
Case in point, McDonalds. Everyone laughs at anyone who works at McDonalds and thinks they’re losers, right? I mean, it’s just about the worst job imaginable in the collective social consciousness. But I was at a McDonalds last night and they offer their lowest employee $9/hr–far above the minimum wage. A manager at McDonalds makes more than my wife made working for the state government even though she had a master’s degree (ok, there’s one of those underpaid people I said I didn’t know). And when you think about it, McDonalds sure beats digging ditches or pulling decomposed bodies out of Mexican sewers (sorry, I’m remembering an episode of World’s Dirtiest Jobs from Discovery Channel).
Towards the other end of the spectrum, take a look at web programmers. As an employer go and try to hire a competent web programmer and you’ll find that these guys are pulling down $90-120K per year with excellent benefits, bonuses, perks, etc., and they only have a few years of experience. And this is in Utah, where the cost of living is below much of the nation. And the funny thing is that the cost of a decent programmer has gone up during the exact same time period as India producing 10 million programmers per year. Outsourcing doesn’t seem to have hurt programmers at all. They seem to be making out pretty well indeed.
All of that said, yes, I believe people are foolish to believe any company puts their employees first. Companies also don’t put customers first, no matter what their tagline says. Companies put profits first, the same way you put food first. A company that isn’t profitable will die just as quickly as a human being who doesn’t eat, and that means if a company puts its employees first then they might go out of business, and then will the employees be happy and say “Well, at least they put us employees first instead of laying us off so that they could be profitable and stay in business.”?
But running your own business isn’t the only solution. Running yourself like a business is. Even if you work for an employer, think of yourself as a business, be entrepreneurial, and it will improve your chances of success, because you’ll be profitable, and employers like employees who generate profits and tend to keep them around.