Why do people start startups? To solve a problem or fill a need? To be their own boss? To escape the 9-5? To make gobs of money? The answer is different for everyone, but its probably a combination of a few of these factors. Lots of people I talk to have great ideas, but don’t end up taking the next step even though they would like to make money, be their own boss and escape their 9-5 job. How come?
I’ve been talking with other entrepreneurs and doing a bunch of thinking about this question for the past few months, but had not completely put it into words until I read Paul Graham‘s latest post about why he started Y Combinator, an innovative investment fund that gives techies mentoring, an office and small amounts of funding in exchange for small pieces of equity.
The most common reasons for people not starting their own companies are that they think it will be harder than it actually is, they are risk averse or are worried about capital. For some people, these are real reasons not to start a business, but for many people who have good ideas, they are more excuses and rationalizations than reasons. They simply do not know where to start or how to move forward with their plans.
This is not a personal failing on the part of people with good ideas who have not moved forward yet. It is a failing of high schools and colleges for not teaching them the necessary skills and punishing creativity. It is the failing of entrepreneurs who have been successful for not showing others the entrepreneurial process and its the failing of a society that makes entrepreneurship seem much more dangerous, risky and hard to do than it really is. Potential entrepreneurs have to get past objections from family and friends who ask things like “why don’t you work for a real company ” or my personal favorite “when are you going to get a real job.”
This isn’t to say that starting a company is easy and that everyone should do it. It’s not easy and some people aren’t cut out to be entrepreneurs. It takes hard work, perseverance and the ability to motivate yourself even when you run into obstacles, but it’s not as hard as people think. Here is why Paul Graham started Y Combinator:
The real reason we started Y Combinator is one probably only a hacker would understand. We did it because it seems such a great hack. There are thousands of smart people who could start companies and don’t, and with a relatively small amount of force applied at just the right place, we can spring on the world a stream of new startups that might otherwise not have existed.
In a way this is virtuous, because I think startups are a good thing. But really what motivates us is the completely amoral desire that would motivate any hacker who looked at some complex device and realized that with a tiny tweak he could make it run more efficiently. In this case, the device is the world’s economy, which fortunately happens to be open source.
That “relatively small amount of force applied at just the right place” Graham writes about is the Entrepreneurial Push.
I have been trying to give the Entrepreneurial Push to as many people as possible, without having a name for it. I think it’s important for people who have started companies to share their experiences with others to set an example that it can be done. I try to use my blog and consultancy to show people that you can be an entrepreneur without a business degree, tons of startup cash and a team in place. Whenever someone comes to me with an idea for a business, I try to encourage them to start going down the startup path because once they start to write their business plan, they are much more likely to actually start.
While we all don’t have the wealth of resources (time, money and experience) that Paul Graham and Y Combinator have, I think that entrepreneurs should go out of their way to give as many people the Entrepreneurial Push. I started Capital Entrepreneurs, a network of young, Madison-based Entrepreneurs, partially in hopes that the group would influence more UW students to start companies while in school or see it as a viable option after graduation.
What should entrepreneurs do to give others the entrepreneurial push that they need to get started? Here’s a short list of ideas, but please comment with any other ideas or strategies that you have.
- Advocate for entrepreneurship to make small business and startups more visible in other places besides California and Boston.
- Give back by helping others who are just starting out to eliminate the “cloud of apprehension” surrounding entrepreneurship.
- Join local entrepreneur clubs.
- Speak in high school and college classes.
These small entrepreneurial pushes help smart people who are thinking about start their own companies actually start. They could create amazing companies that could change their lives or even the world.
Note: If you are an entrepreneur in Madison and are interested in joining Capital Entrepreneurs, shoot me an email.