The Startup Myth

The world would be a much better place if fewer people tried to build startups. Don’t get me wrong, I’m not saying we could use less entrepreneurship. Innovative entrepreneurs will pull us out of this recession more sustainably and more meaningfully than any government bureaucrat with indirect policy levers could ever do. What I am saying is that we need more people wanting to build companies, not startups. That is not a too subtle distinction.

Would-be entrepreneurs proclaim proudly how they are starting new businesses and are willing to endure many years of blood, sweat, and tears. To be sure, the willingness to work hard and persevere ranks high on the list of essential entrepreneurial character traits, but I think we have over-romanticized the startup life. Low pay/no pay, long hours, and years of struggle have come to be badges of honor for those of us still in the minor leagues of startups. We’ve either frantically adjusted our business models (groping after every hot trend like Web 2.0, social networking, or microblogging) or we’ve stubbornly stuck to our original ideas regardless of market feedback. The most important thing we have in common is that we’ve been unable to graduate to the major leagues of thriving, growing, established companies too big and successful to be called startups.

However you define a startup, trust me, there is no glamor or glory in remaining a startup. But we’ve come to fall in love with the Myth of the Startup. We all know a few guys who seem to perpetually be working on a startup. They love the story of being a startup entrepreneur and the attendant lifestyle. Even more pronounced is the first-time entrepreneur who has bought into the Startup Myth. His romantic vision of startup life becomes a self-fulfilling prophecy and he is destined to struggle with a small “startup” because that’s what he wants.

Dump the warm fuzzies. Entrepreneurship is not about startups. Entrepreneurship is not about eating ramen noodles and scraping by. Entrepreneurship is not about being able to tell your friends and family you are a founder of a startup so you can finally impress them. Entrepreneurship is not about working 12 hour days ad infinitum and sleeping only 4 hours per day to show the world how tough and committed you are. Entrepreneurship is not about attending industry conferences so that you can hear yourself speak and tell your competitors how excited you are about your opportunities. Entrepreneurship is not about blogging about entrepreneurship. Most of all, entrepreneurship is not about some romantic ideal of living a tough startup life.

Get real. Entrepreneurship is about growth and value. Entrepreneurship is about creating something a sufficient number of people want or need. Entrepreneurship is about turning every dollar of resources spent into something worth more than a dollar. Entrepreneurship is about building a company and growing it beyond startup stage. The list of what entrepreneurship is not is much longer than the list of what entrepreneurship is. That’s because there are a lot of things people associate with entrepreneurship that really don’t have anything to do with entrepreneurship. It’s like describing a hamburger. Despite the many different ways to make a hamburger, there are almost infinite ways to describe what a hamburger is not.

Dream, dream big. Think, think different. Start a startup and eat ramen noodles (rice and soy sauce in my case) if you have to. Revel in your foldout tables and chairs. Dance a jig in your cozy garage. But realize that all these are just trappings of a startup. Figure out a way to scale so that your startup can grow to be a valuable company. Build a company, not a startup. If you love the startup lifestyle, leave your company after it outgrows you to start something new again. It’s a good thing to have your company outgrow you, your garage, and your romantic visions of what it means to be an entrepreneur.

Hewlett-Packard Garage

Comments

[Wusthof Steak Knives]

This is a very wonderful post. Thanks a bunch.

[wireless barcode scanners]

It may fit the dorm-room startup, and it does fit a good share of the 160 million employees in the U.S., but don’t paint solo entrepreneurs with the same brush you would paint failing businesses.

[super solano hair dryer]

This entrepreneurial group comprises seventy percent (yes, 70%) of all U.S. businesses. These are the people who keep America running—even during a recession—and also pump $1 trillion dollars into the U.S. GDP every year.

[hon file cabinets]

Lesson Learned: Build a Startup and have a Great story to tell, but Build a Great Company and others will tell it.

[emergency survival kits]

“An Entrepreneur is a person who organizes and operates a business, usually with considerable initiative, while taking on greater than normal financial risks in order to do so.”

[contacts for less]

I got bored when there was nothing to push against. So I foundered. Gradually I have been adapting to my bastard version of continuous improvement to keep things going and interesting for me.

[commercial espresso machines]

My business loan will be paid off in three months. I like that the future is MINE after 5 years of hard work and painful (but worthwhile)personal growth.

[commercial coffee makers]

Love this post. Very true.

[chi hair dryer]

well said - start-up is a stage, not an end unto itself... if it doesn't evolve into something more (a great team that someone wants to hire, a reat product/service that can be rolled into another company or a stand-alone profitable company of whatever size) it can be a lot of things - a great learning experience, a badge of honor, a lot of fun, a stepping-stone or pre-cursor to something else great - but "success" it is not... no value has been created (at leats not by that activity alone) IMO.

[carpet cleaner rental]

In your post you do a great disservice to the 21.1 million businesses in the U.S. that do not have any employees. This entrepreneurial group comprises seventy percent (yes, 70%) of all U.S. businesses. These are the people who keep America running—even during a recession—and also pump $1 trillion dollars into the U.S. GDP every year.

[ohio state memorabilia]

Being in the middle of two startups, I really can't wait to have them become established, successful companies. There is very little glamor in a startup. Your points on getting your validation from the startup process are spot on.

[Andre Charoo]

Love this post. Very true.

[Bob Foster]

It must be youth and naiveté that paints such a bleak picture of “startup” entrepreneurs. There are many definitions of, and ideas about, what makes an entrepreneur, but here is my favorite, because I think it says it all:

“An Entrepreneur is a person who organizes and operates a business, usually with considerable initiative, while taking on greater than normal financial risks in order to do so.”

In your post you do a great disservice to the 21.1 million businesses in the U.S. that do not have any employees. This entrepreneurial group comprises seventy percent (yes, 70%) of all U.S. businesses. These are the people who keep America running—even during a recession—and also pump $1 trillion dollars into the U.S. GDP every year.

Your description of startup entrepreneurs, and their ramen noodle-eating-sleepless life style is way off the mark. It may fit the dorm-room startup, and it does fit a good share of the 160 million employees in the U.S., but don’t paint solo entrepreneurs with the same brush you would paint failing businesses.

For every contented CEO of a growing company, there are many, many more contented…and wealthy…entrepreneurs without employees (“startups,” by your definition). As not all High School graduates want to go to Harvard—not all entrepreneurs want to grow a company…and we should be thankful for that.

Aside from your misguided attempt to denigrate startup entrepreneurs, I think Seth’s program is a wonderful idea, and I wish all of you much success in your endeavors.

[John]

Being in the middle of two startups, I really can't wait to have them become established, successful companies. There is very little glamor in a startup. Your points on getting your validation from the startup process are spot on.

[Laurent]

well said - start-up is a stage, not an end unto itself... if it doesn't evolve into something more (a great team that someone wants to hire, a reat product/service that can be rolled into another company or a stand-alone profitable company of whatever size) it can be a lot of things - a great learning experience, a badge of honor, a lot of fun, a stepping-stone or pre-cursor to something else great - but "success" it is not... no value has been created (at leats not by that activity alone) IMO.

[Stefan]

Spending other peoples' money in the vague hope to realize a kind of "exit" delivering a simple (financial) ROI has never been entrepreneurial.

It's still all about delivering a value, that customers want to pay for...

[anonymous]

It appears this blog breaks blockquote and strike tags in comments.

In the first line of this post, it should be "fewer people", not "less people". That's because "people" is plural rather than uncountable.

[anonymous]

The world would be a much better place if less people tried to build startups.
lessfewer people

[Dan]

Hi,

I have been self employed for a long time. I do things I enjoy and sometimes I get to eat the noodles.

Starting up is one set of skills but Keeping It Going (tm) is completely different.

I got bored when there was nothing to push against. So I foundered. Gradually I have been adapting to my bastard version of continuous improvement to keep things going and interesting for me.

Finally, making a startup and selling it to a bunch of dumb investors never appealed to me. Why would I waste my time on that? Getting rich is so much less important than doing things I care about.

My business loan will be paid off in three months. I like that the future is MINE after 5 years of hard work and painful (but worthwhile)personal growth.

Dan

[Hasan Luongo]

really poignant points, there is a lot of romanticism about the entrepreneur, when the folks that are often sited as great entreps are the ones that moved quickly passed being a startup and build amazingly profitable and meaningful companies.

[Zaid]

Very, very well said.

[Michael]

Lesson Learned: Build a Startup and have a Great story to tell, but Build a Great Company and others will tell it.

Regards,
Michael

[Joseph Sherman]

I like your definition - "Entrepreneurship is about creating something a sufficient number of people want or need." It is so easy to think that "if you build it they will come" and not focus on producing what people want or need. Thank you.

[Steve Buchholz]

Wow. Great post. I think there is a lot of fear about having a startup move beyond the beginning stages and succeed. I've experienced this fear myself and allowed it to derail my big dreams. I'm at the startup stage again, and now that I recognize and undestand that fear, I have a plan in place to deal with it. Cross your fingers for me, OK?