While media reports glamorize successful entrepreneurs such as Google’s
Larry Page and Facebook’s Mark Zuckerberg, the truth remains that most parts of
being an entrepreneur suck.
Everybody like successful
entrepreneurs. People always sensationalize
their achievements. At business schools, professors like to romanticize and
celebrate the geniuses who break the rules and changed the world: Steve Jobs,
Ted Turner, Larry Page, Sergey, and Mark Zuckerberg, among others. Worldwide,
politicians praise them because they create wealth that generate jobs. How
about glossy magazines? Of course they are part of the band wagon: they drool
over the mansions belonging to popular entrepreneurs like Mark Zuckerberg and
Richard Branson.
Obviously being an entrepreneur can
be fun and rewarding: one would experience the freedom of being able to chase
big dreams and the thrills of building empires. But the reality is that being
an entrepreneur or a business founder can be grueling, spirit breaking and
tough: business founders have the money worries of chronic gamblers, the social
life of hermits and the job security of zero-hour contract workers.
Unfortunately, this is the back side to entrepreneurship nobody – including the
business school professors – likes to talk much about. So we shouldn’t be
surprise when more than 90 percent of start-ups and small businesses go
bankrupt within five to 10 years. As a matter of fact, the U.S. Bureau of Labor
Statistics estimates that of the 172,000 new businesses created in 2010, at
least 225,000 went bankrupt. A similar trend has been observed in previous
years, implying that for most years, while new business establishments entered
the economy, older businesses exited the economy in greater numbers.1
Just consider this scenario: Six years ago Mbaso (not
his real name) left his full time job at a large bank to strike out on his own.
He doesn’t like corporate life anymore. Besides, he wants to test his business
acumen. Unfortunately for Mbaso, being an entrepreneur proved far harder than
he had imagined. First, instead of enjoying a road to prosperity, he
encountered a succession of potholes, speed bumps and dead ends. When he was
with the bank, he had free access to certain things, including administrative
support, a social network, plus a regular bi-weekly paycheck, among others. Now
he had to provide these by his own effort. Second, he suddenly realized that he
had to learn how to do all sort of things, some of which he had not thought
about before. For instance, he now has the responsibility of meeting bi-weekly
payrolls – a task that was very overwhelming. One thing that worries him most
was how he could afford to keep his car, pay his monthly mortgage on his house,
and pay his utility bills – worries that were all-consuming. He never knew that
being his own boss was this challenging. Soon he took to drinking, lost his
levers of control and his company collapsed.
Mbaso’s story is a familiar one.
Being your own boss is an amazingly difficult work. Those that made it had lots
of sad stories to tell. While building the business, most of them had no life
balance, no family time, and no social life. A lot of them had to spend years
sleeping on mattresses in their offices, living off sandwiches, spaghetti hoops
and instant noodles. So it is not a surprise why Vivek Wadhwa, an entrepreneur
who became an academic, suffered a heart attack at the age of 45 after he
revived a company and took another company public.2
Entrepreneur’s bitter pill
Not many aspiring entrepreneurs
realize how lonely it is at the top. Thus being your own boss can turn into a
different sort of failure. Generally speaking, the best way aspiring entrepreneurs
can avoid loneliness is to found their companies with a friend. But this kind
of partnership has its own downside: if you decide to go into business with a
friend, then you should also be ready to deal with quarrels about money, titles
or power. We saw that with the story about Facebook. Should an entrepreneur
decides not to follow this path, there is another option: take on more
investors and introduce more professional managers. This approach makes it easier
to cope with the growth of the company. But, just like the partnership model,
this approach also has its demerits: it can lead to a loss of control over the
company. Hence it is not a surprise that only a few founders are still the CEOs
when their companies go public.3
These types of “roller-coasters”
can make the life of most aspiring entrepreneurs very miserable, especially
when their progress is slow, no matter how balanced their lives may be. No
wonder almost every average entrepreneur is far from balanced. This fact also
explained why John Gartner, a professor of psychiatry at John Hopkins
University noted that a large percentage of entrepreneurs may suffer from
hypo-mania, which makes them to be too energetic, over-optimistic and
overconfident. This, he explains, increases their restlessness and make them
over-willing to take high risks.
A natural question to ask at this
point is what can be done to deal with the dark side of being one’s boss. First,
every company founder should understand and appreciate the importance of having
regular medical checkups, learning how to relax, and making time to exercise. After
all, health is wealth. The fact remains that, while a business founder may not
believe in anything called a work-life balance, his or her body certainly does.
The bottom line is that it can be very dangerous to neglect or downplay this
important fact. Second, the idea that a business founder can succeed in
splendid isolation is a dangerous illusion. Simply put, if you must be your own
boss and start your own company, then you must do some hard work to construct
social networks. You will need good friends to lean on. You will also need
mentors to guide you.4 Luckily there are many organizations that can
help any aspiring entrepreneur or business founder in these areas. The
Entrepreneurs’ Organization(EO), for instance, is a global network exclusively
for entrepreneurs.5 With more than 10,000 members in 46 countries,
the EO organizes meetings in which entrepreneurs can talk about their emotional
as well as their business problems. The Kauffman Foundation is another
organization that would be helpful. This nonprofit organization studies and
promotes entrepreneurship. It also provide courses that are offered online –
courses that teaches how entrepreneurs can survive in the global business
environment.
Knowing how to manage failure is
important too. But this can only be done if, and only if, the entrepreneur have
a more realistic assessment of what it is like to fail. Many published resources
can be helpful in that regard: management literature is teeming with stories
and testimonies about how entrepreneurs should deal with failure as a learning
experience. It is quite understandable why entrepreneurs hate failures. As an
entrepreneur, the failure of your business dream or idea can put you into a
state of mind that is similar to
grieving after a death or a divorce. In spite of that, it is not the best to
continue to fixate on your loss. If you really want to restore your fortunes
after a business failure, your goal standard must be to force yourself to be
failure-friendly: you must know how to “fail
yourself to success” by identifying what you know you did wrong and being conscious
not to repeat your mistakes. In addition, don’t hide your mistakes so that you
can learn from others. As Jane Porter of
the Entrepreneur magazine puts it in
one of her articles: “Be proud that you were brave enough to take a risk in the
first place. By being forthright about your mistakes, you open yourself up to
learning from others.”6
References
1U.S.Bureau of Labor Statistics(n.d): Business Employment Dynamics. Retrieved February
4, 2015 from http://www.bls.gov/bdm/entrepreneurship/entrepreneurship.htm
2O’Brien C.(2012): Vivek Wadhwa Emerges As
Silicon Valley’s Most Provocative Voice. San Jose Mercury News. Retrieved February 8, 2015 from http://www.mercurynews.com/ci_19779516?source=infinite
3Entrepreneur Anonymous.(2014, September 20). The Economist. Retrieved February 6,
2015 from http://www.economist.com/news/business/21618816-instead-romanticising-entrepreneurs-people-should-understand-how-hard-their-lives-can
4Ibid
5Entrepreneurs’ Organization(2015): Discover EO. Retrieved February 8, 2015
from http://www.eonetwork.org/about/
6 Porter J.(2013): How Failure Made These
Entrepreneurs Millions. The Entrepreneur.
Retrieved February 10, 2015 from http://www.entrepreneur.com/article/227011
