Entrepreneurship is Not Like the Movies
Are people choosing entrepreneurship for all the wrong reasons? I’d say so. The recent attention given to famous entrepreneurs and the economic development successes of a few cities in the world (San Francisco, New York, London, Austin) make it seem like everyone can be an entrepreneur, and also make entrepreneurship seem more glamorous than it is. Actually, it’s gruelling, and the odds of failure are high. One of my stepsons, a highly successful software business owner, admitted to me he’d never do it again.
In the seventeen years I’ve been coaching entrepreneurs and the long years I’ve been one, ideas about entrepreneurship have done a 180. When I graduated from college, everyone wanted to work for a big corporation —that was the definition of success.
Now it seems that the opposite is true. Everyone wants to be an entrepreneur. Big corporations are having difficulty coercing millennials to work for them, offering incentives from internal gyms to free meals and dry cleaning to working from home. Corporations are in a race to be the “best place to work” to attract “human capital, “ because no one is just an employee anymore.
But that’s only because entrepreneurship has been so glamorized. Pop culture portrays the role of the entrepreneur as changing the world like Elon Musk or Bill Gates, being in control of the privacy of billions of people, like Mark Zuckerberg, to being rich like Richard Branson or the 20-somethings in the Bay Area whose companies get acquired for billions of dollars without revenue. (Snapchat’s turn down of a $3 billion offer was the last nail in the coffin for realistic conceptions of entrepreneurship.)
Yet the reality belies the media. To be an entrepreneur today is to be a “solopreneur,” creating few or no jobs and eking out an existence. Far from a way to control one’s life, entrepreneurship —with or without success — is a ticket to a perpetual roller coaster ride that can be nauseating most of the time.
Most startups are founded during recessions when jobs go away. As the economy improves, the Kauffman Foundation sees a falloff in actual startup rates, demonstrating how many people actually used entrepreneurship as a way of bridging the gaps between jobs. 87% of the new businesses in the Kauffman study have 0-3 employees and those are dominated by consultants operating out of home offices. Of people who did start businesses, only the youthful have high confidence that their businesses will be more profitable in the next year than they are now.
The truth on the ground is a bit darker than in the glow of the press. It’s a good idea to think carefully if you’re considering entrepreneurship because you’re passionate about what you are doing, or just because you don’t know what else to do. If it’s the latter, you might bear in mind that 40 percent of people in entrepreneurial businesses report working sixteen hours a day.