Can you do an Elon Musk?
Musk has always been popular at EF. Two years ago we removed the question “who is the founder you most admire?” from our application form as 80% of responses cited Musk. Steve Jobs barely got a look in.
Musk is, no doubt, one of the most significant inventors, founders and investors of our era. He has taken on some of the world’s most difficult and challenging industries and seemingly won. He is a role model for the next generation of tech founders.
Recently in Entrepreneur First interviews “doing an Elon Musk” has become a misnomer. Potential founders want to emulate Musk’s success in a very particular way.
They want to found an ‘easy’ startup. One that they can sell within five years and make a significant amount of personal wealth. They will then invest that money in the startup they really want to create. A startup that will push the boundaries of humanity.
There are two reasons why this won’t work for you.
1. There’s no such thing as an easy exit
Sometimes we have members of the cohort who start working on random ideas that they have no connection to. Their reason for selecting that idea is that they believe it will be “an easy exit”.
John Doerr of KPCB famously said that great ventures are run by missionaries, not mercenaries. Founders with a deep connection to why they are building their company are able to recruit better, engage customers more passionately and persevere through the trough of despair.
Founders that motivated by short-term wealth struggle to have the vision or resilience to make it to the exit they are aiming for. And what’s more, the numbers are against you, very few founders exit their companies. A rough estimate is that there are about 2000 companies funded through SEIS each year (seed investment), and in 2015 there were 82 VC backed exits in the UK.
And even if you do exit, 48% of those who exit are at the Seed or Series A stage. These will typically be acqui-hires, that tie you into earn-out periods of potentially two years. Being tied into an earn-out period isn’t conducive to starting your next, more ambitious company.
2. Don’t copy their stories, copy their mindset
First time founders see other founder’s stories as blueprints for their own progression. Yet, it’s unlikely you can replicate someone else’s route. Building a startup is not like following a traditional career path in a big company. You can’t aim for certain promotions and end up as CTO.
Don’t focus on the path another founder took, focus on the mindset the founders had. For example, Musk had a growth mindset that enabled him to learn fast. He invested in becoming an expert in fields he had barely touched before. His appetite to learn, combined with determination birthed SpaceX and Tesla. It wasn’t that he had created a city guide for publishers or a new money transfer system before hand.
Don’t build a dating app to fund your space company
Many potential founders want to delay building the company they are most excited about. They want to ‘save’ the idea for when they have more experience, or more disposable cash.
What’s more, the best founders build significant expertise in niche areas. They take their edge and they 10x it. They learn as much as possible about the problem they are trying to solve/tech they are trying to build.
You can’t do this by working on something unconnected. The years spent learning how to build a dating app won’t prepare you to build your space company. That time would have been better spent discovering the nuances of the problem you’re trying to solve, investing in research and learning your customers needs.
If you are looking to found a company, check out Entrepreneur First. We help the world’s most ambitious individuals build their own startups from scratch.