I wrote an article about when to start a company, but the question I am hearing sometimes is why should I start a company
I thought that the answer to “should I start my own company” was always “yes!” and the only reason people didn’t do it was because they had (what they thought was) good excuses not to. So before I list the main excuses for not starting and addressing each one individually let me talk about why you should start a company.
First and foremost you should start a company because starting a company is creating something. It is a creative endeavour, and that is always worth doing
People like to be creative. If you think you aren’t creative you are wrong. Watch any small child. They love to create. They are proof that people are naturally creative. Most people have just had it beaten out of them. Which reminds me of a story: When I lived in Oman aged 6 or 7 my (mum’s mum) Granny Brenda (who was actually a really great woman and someone who inspired me to create Tigerspike) helped me with my homework. I had to complete the following sayings:
- as alike as ___________
- as easy as ___________
- a stitch in time saves _______
- and so on
So Granny Brenda sat down and said “lets not use those old sayings, lets make up our own ones!”, so we did and it was creative and against the expected rules/norms, which was fun. Then I got to my classroom and the teacher said “swap your papers. If anyone has anything apart from these answers mark them wrong!”. I got all of them wrong. 0%. GRAAAANY!…. HOW COULD YOU DO THIS TO ME!!! I suspect this happens in many schools (although not in The Green School where my kids are, it's pretty cool you should check it out). Anyway, I digress.
My point is I think that everyone is creative and so everyone can be an entrepreneur, but it gets beaten out of you sometime between when you are 4 and when you are 40. I hear so many excuses and I think that many are really just unfounded fears. So here are the two most common excuses that hear and why I don’t agree with them.
Excuse 1: “I don’t have any good ideas!”
Ideas don’t matter. They are not important. I had the idea for inline skates and zorbs (those big inflatable balls you get inside) years before they happened (seriously, I wrote it down and dated it), did I invent them? no… er.. maybe?. But the execution is what matters. Actually doing something. And I didn’t do anything.
Tigerspike wasn’t a great idea. We were creating ringtones with the band I was in, and the person who we created them for (Anna Trybocka) said: “hey we should start a company and do more ringtones and other mobile technology things”. So Anna and I did. We ended up creating Tigerspike and building some cool technology (and later, cool design) for big companies. It worked and we ended up with big clients like The Economist, Emirates, and the United Nations and we grew and we ended up with 8 offices and 300 people making over $50m a year. It wasn’t easy; it was really hard. But the ‘idea’ had nothing to do with anything. By the end of year one, we were already out of the ringtone business. The ringtone business was actually a really crappy business to be in — all ringtone companies were actually confusing and ripping off kids by getting them to download a free ringtone when in the small print was a weekly subscription that their parents worked out how to cancel after an average of 12 weeks. That was the formula for them — if the media (advertising) cost to trick one kid into clicking on the scam was less than 12x the weekly charge you did it. Sorry, I am getting carried away here, but I hate those guys. I see the same dodgy people again but this time its ICOs.
Anyway, we refused to do it and so we didn’t succeed in ringtones. We had the largest catalog of Christian ringtones in the world in 2004/5 but we didn’t make any money because we refused to rip off Christian kids (that would have sent us straight to hell!)
What we did do well was we reacted well to the rapidly changing mobile technology market and we built a team that was able to execute. That was important, not the idea. So forget needing to have an idea. Just start something, execute well and build and motivate a team to react to changes. Sounds simple right? it isn’t. But the point is its not about the idea.
But what exactly should I start? Well think of something at your current work that annoys you, and think how to automate/fix it, and then build some technology to do that (then you sell it back to the company you work for if you want to make a quick buck — which I discourage).
If you still can’t think of any ideas but you know deep down you are amazing at execution then email me I have tons of new in-line skate ideas you can have for free. Because they aren’t really worth anything.
Excuse 2: “I can’t quit my job, my family relies on my salary”
This is a legitimate excuse not to start a company. Things need to be paid for, and if you are between 40 and 50 (which I think is the best time to start a company) then you definitely have bills that need paying. Enlighten yourself on why you don’t need ‘things’ and how you can actually live on way less here, (it is written by a friend of mine who was a professor at the University of Copenhagen, and she is much smarter than you. Or me).
The way to start a company if you need money is to do it while at your job. I did this with Tigerspike. I worked at KPMG for at least a year before quitting. You just have to work harder and on weekends. You do have to quit eventually, you can’t do a job and start a company for long because what happens is your job performance slips and they notice (well they do if you work for KPMG, but if you work for the Australian Government like Olly did, they don’t). Honestly, Olly and I got nowhere until we quit our jobs and sat in an office thinking “feck! now we have to make this work!”. That was the biggest single thing we did. Quit and got a mini office and sat in it thinking “shit! now what?”.
So think of a crap idea (see the previous point). Go on the internet and google “lean canvas” or something similar. This is a business plan for people who can’t be arsed to write real business plans (side note: Tigerspike had no business plan for 8 years. You don’t really need them! —you need company culture. Culture trumps plans). Then you calculate the minimum amount of money you need to run this company for a year. The way to do this is calculate the minimum salary that you need to keep the family happy. Then add whatever your technical co-founder needs (yes, you need a technical co-founder), then double that number (just because) and put it in a pitch deck and go look for some rich family and friends to fund your company.
Don’t be greedy now!. I talk to a lot of bankers who find it hard taking pay cuts because they have been paid too much all their lives and think they are worth that money (they aren’t). And no one is lending you money just to pay yourself, so be humble, suck it up, and eat shit for a year. Its cheaper than an MBA and a million times more valuable (MBAs are not really worth anything. I know because my friend Stu told me and he has one). If you have the balls, why not ask your company to pay you 50% of your salary and guarantee you your job back in a year. You can sell this to them as digital disruption/automation/innovation of their business. If they are someone forward thinking (like DBS Bank for example) they may actually fund you.
Once you get the money, you can quit your job. If you don’t get the money, you didn’t do a good enough job of convincing anyone to part with their money. Try harder, or stay in the job and be happy because at least you did something.
The worst that can happen
The worst that can happen (and this is the question to ask that makes you start a company) is that you have to return to the job that you didn’t really like. But actually this is unlikely, since starting a company and failing is such a huge learning experience and is creative and innovative. Traits that all companies are looking for, so you can probably get a new job better than your old one.
And the best that can happen is that it works. And that is amazing. Go read about Ned it happened to him.