Fake Entrepreneurship
“Fake entrepreneurship”: A misconstrued view of the work, connection building, consistency, aggression, privilege, and hidden factors in entrepreneurship. It is ignored by news outlets and sold as opioids for the masses.
I like things like structure, right answers, efficiency, straightforwardness, and purpose. I don’t like things like self-promotion, competitiveness, bravado, and bullshit. […] So much of the culture and mythos of Silicon Valley is oriented to venerate the founder and cultivate the person who thinks (s)he can be one that I find it irrelevant at best and grating at worst. Strike one. — KEILA FONG
Fake Bootstrapping
When you’re bootstrapping, capital can come any of the following
- savings, loans or lines of credit
- friends, family members;
- selling your expertise on the side
- selling an early product
- leveraging government grants
- applying to startup competitions
- crowdfunding
Fortunately, companies that stray away from venture/angel funding and bootstrapping tend to have lower scalability. My struggle, however comes from the fact that if one of these low scalability business on the side generate revenue, that means a longer runway of cash when they go on to attempt to work on a more scalable business.
Let’s say I have a relative that sells hats on Shopify very successfully without my input. It’s not a scalable model so, I’ll I have to do is make an arrangement, such as maybe helping him with the websites and products, split the profit, and I have a lot more cash to work on a more viable business. It’s nothing revolutionary, and people often don’t pay mind to what others are working on, but simple ways of generating bootstrapping funding like that could make or break a business.
As someone who has tried most of the above bootstrapping options, I can guarantee that connections and privilege are paramount in success and opportunities in bootstrapping. Although obvious, hopefully it allows people to view struggling entrepreneurs with more grace, and successful ones with less exhalation and transcendence.
As I mentioned in a previous piece, when I was part of a business program at Queen’s, the MBA teachers there once told my cohort in a lecture: investors love the concept of “unfair advantages” in a business. For example, one’s father having a major connection with insider knowledge in the industry is huge — “use them!” Knowing this, it became (at least for me) a lot harder to be jealous of business by Queen’s alumni for example that became overnight successes. Every business is supposed to have an “unfair advantage”. But yeah, it’s hit or miss. Sometimes the killer entrepreneurs sometimes were already rich to start with sometimes rags to riches story happen. The former more so than the latter. This may seem discouraging, knowing that one’s network is a powerful determinant of success in the business world. It is more encouraging if you view it from this perspective if you gain momentum, you gain even more (you need money to make money).
Not putting all the credit toward’s oneself and acknowledge the factors and people who brought them success is very rare but needed to provide entrepreneurs with a necessary dose of humility. It’s an imbalanced worldview if one feels that financial freedom in bootsrapping is what made them a self-made-man or woman.
Another must to add is that there is clearly money from illegal activity which is very profitable and still personal finances which can rest under the huge and publicly sanctified umbrella of “bootstrapping”
On a positive note: Although there are lots those who fought harder for said opportunities build better skills in seizing opportunities because if you’re not always surrounded by them, you may appreciate them that much more. Individuals like this are very opportunistic and successful.
Fake Sensationalism
Sensationalism and and emotional highs are the opium of the people. The headline on article on the left is nothing short of the heavily sensationalized mantra spread throughout the startup community. The article states:
They dreamt up a mobile phone app which would notify shoppers in a grocery store of special offers and then let them snap a picture of their grocery receipt and receive money back on products being promoted. The SnapSaves business model was to charge the company advertising its offers through the app. Romanow and her partners poured more than $100,000 per month of Buytopia cash into…
Stop there. “They dreamt up” a “mobile phone app” should be they “bootstrapped by pouring in personal finances, applying to countless pitches, applying for grants, savings, loans or lines of credit, and asking for money from friends and family members”. The entrepreneur mentioned has deep rooted connections in business which help create plenty of opportunities to be acted on, mastered, then executed in a methodical manner by her and her kinfolk — not “dreamt up”.
Regarding the image on the right, a user on hacker news said:
It’s a nice headline, but it really leaves out the tremendous amount of back-end work that went into making that front end easy to use.
There are countless cases that are consistent with the worship cries of a poised entrepreneur raising funds like how a God raises the dead. A startup that raises x-million dollars in funding is primed to gain news on blogs and social media. Managers and directors in large to medium corporations and organizations deal with funds that are much larger than that of many aforementioned CEOs, however they are devoid “hype” and “excitement”. Sure, they lose brownie points for not co-founding a company, but many entrepreneurs-even some that I listened to back at Venture for Canada would say that the industry thrives on sensationalism. If you really have it, you won’t need to flaunt it.
Elon Musk went from Queen’s to Stanford then dropped out in ’95 to start and online version of YellowPages called Zip2. He bootstrapped it with $28,000 from his father and $6000 from a VC. Musk, being very cunning was at the cusp of the .com boom in Stanford with the right resources set in place, and a mindset primed to be an entrepreneur. It is a combination of things that can ripen opportunities. He then earned 22 million USD from selling it and went on to work on PayPal. To some, that upfront capital is nothing (especially compared to what he gained from it), to others, they cannot imagine affording a partial Stanford enrollment, tuition, taking the risk in dropping out to start a company that might fail, all while leaning on a close-knit network of venture capitalists.
There’s a very authentic chance a startup will fail. That’s just the nature of the game, despite what you may have been told. Having a solid business plan is part of it, but funding and opportunity is another part that is seldom brought to realization.
In 2012 the Wall Street Journal reported that three out of four startups fail, based on research, conducted from 2004 to 2010, examining 2 thousand companies that had received at least $1 million.
Fake Excitement in Working for “A Startup”
I was the biggest fan of working for startups (as employee-not cofounder) as seen here, but my views are evolving.
A reason some individuals gravitate toward startups is the idea that it might be easier to eventually land an executive position. But how many startups have high-level executives who are not the founders? Notice that I’m saying “a startup” in a generic manner because typically the lies are sold when there’s no focus on the company or the investors, but just the idea that “startups” are superior to med-large corporations usually because of a set of the same reasons.
And the promise of an executive promotion down the road could be more of a ploy to compensate for low pay. You may end up not making a lot but have an awesome title. Such titles can also be offered during the initial recruitment. Since the startup owners are being extremely careful with their money, the titles are used as bargaining chips while you’re the one who takes on the real risk and hard work.
Finding heavy comfort in the assumption of working low salaries for equity have a few logical fallacies. Primarily, despite the pitch of the person hiring you for a startup, it has a respectable chance of failing (depending on how early it is and how much information you know about the company). If that’s the case, the equity in a failed or failing business really isn’t worth much. Equity also gets taxed, have aggressive vesting periods, and are expensive. They’re mainly a means to get long-term commitment. Also, once the funding arrives, who’s to say they need you? Frugal, but a point to be considered as well. As a CEO of a larger company, I would outsource a lot of my technical work to Bangalore for very low salaries, to be frank.
Just start your own business, my 2 cents.
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Author: Natu Myers (Website: Natumyers.com)
Natu is a cryptocurrency investor and software engineer who is experienced in building large scale applications. He built Innovator.Supply, an HR recruiting software for VR, AR, and chatbot enthusiasts. This was followed his other service, Hypetroop Market. He has a fitness page on Instagram. Stemming from his time at Queen’s, he was a defensive lineman on the Queen’s Gaels football team. Being a multipotentialite, he finished a business incubator program after graduating, launched his own album on iTunes, and he stays up to date industry-penetrating software startups and crytocurrency investment methods while gaining IT experience.
