There are many reasons to become an entrepreneur and there’s a good chance you’ve heard them before. We all know the stories of the boy geniuses who built billiondollar companies in their garages after dropping out of college, or the social media startups that made their founders rich seemingly overnight.
These are the rock stars of the new generation. They’re doing things their way, having a significant impact on the world, and making substantial money along the way. Movies are even being made about them, telling their stories and glamorizing their journeys.
Who wouldn’t want to start an online business?
Nothing is ever as simple or as great as it may first appear. Yes, entrepreneurship s an excellent way to control your own destiny and, for many, it’s the best chance of becoming wealthy. But it’s not without risk. For every Mark Zuckerberg or Steve Jobs, there are thousands of unknown entrepreneurs slogging it out in lowrent offices, working late nights and weekends, and stressing about whether they’ll make payroll.
The odds of success are not very high. A study by Inc Magazine and the National Business Incubator Association found the failure rate to be as high as 8 in 10 businesses. Other studies agree that odds of failure are higher than the odds of success but suggest the outlook is not quite so bleak. According to a 2005 study by the Bureau of Labor Statistics, “66 percent of new establishments were still in existence 2 years after their birth, and 44 percent were still in existence 4 years after” . As for Internet companies specifically, the report found that “despite the early success of the “dotcoms” during the 1990s, the information industry had the lowest 2 and 4year survival rates, 63 percent and 38 percent, respectively”. This is consistent with a 1989 study by Bruce Phillips and Bruce Kirchhoff who used the 1976–1986 United States Longitudinal Establishment Microdata (USLEM) compiled by the U.S. Small Business Administration and found that new establishments show an average survival rate of 39.8 percent after six years.
There are other challenges as well. If you’re young, your decision to become an entrepreneur may be relatively simple, as you probably don’t have to give up a promising career, worry about a mortgage, or feed a family. You are, however, most likely lacking savings to sustain you and, unless you were a particularly sharp study in college or from an entrepreneurial family, you probably have little knowledge of how to run a business, find productmarket fit, or otherwise increase your odds of success!
Of course, there are positives, too. Most entrepreneurs cite personal freedom and control over their own destiny as primary motivators for starting a business. Others seek to change the world, or fall in love with the idea of shaping a company to match their own goals and values. There’s also a certain dignity in not having to ask for time off to go to the doctor or attend an important family event. And who can ignore the allure of building a company that you can sell to fund your retirement at the end of your career.
Clearly there are many pros and cons to becoming an entrepreneur, so it’s not a decision to be taken lightly. The journey can be terrifically rewarding, but those rewards come at a cost and the path is riddled with pitfalls.
Our goal is to help prepare you for the journey into entrepreneurship. We’ll tear down the false assumptions of what it means to be a business owner, and build a better conceptual structure for what’s required to find success along the way. Let’s begin by taking a look within ourselves.