What Attracts Silicon Valley Entrepreneurs to the Startup Life?
One of the questions that I asked during all my interviews was ‘Why entrepreneurship?’ and ‘What attracts you to the startup-life?’
There seem to be three main reasons why these entrepreneurs are entrepreneurs. They are either ‘raised’ to become an entrepreneur, in it for the money, or they want to have a positive impact. These reasons have overlap or coincide with each other.
The HBO series Silicon Valley makes a joke of all entrepreneurs and startups posing that they are trying to ‘Make the world a better place’. However, during my research, I encountered many entrepreneurs who did have philanthropic reasons to succeed. For them, this was not just something they said to sound meaningful, this was a genuine goal.
One of the first entrepreneurs I spoke with explained that in his home country, India, there is a lot of hunger. He wants to become a billionaire so he can feed every hungry mouth in India. While social entrepreneurship is often described as nonprofit organizations, it could also have a broader definition: “social entrepreneurship [relates] to individuals or organizations engaged in entrepreneurial activities with a social goal (Short, Moss & Lumpkin, 2009:162).” Short, Moss & Lumpkin (2009) argue that the focus on social entrepreneurship is primarily in nonprofit and the public domains. On the other hand, another company is actively trying to solve a problem in the medical field, to make people’s lives easier ‘and if we can make some money while doing so, that is a win-win, right?’ The combination of social goals and individualistic goals is an interesting aspect of many entrepreneurs I talk with.
One of the entrepreneurs I spoke to is currently enrolled in a free programming school, based on peer-to-peer learning. He and another student decided to found a startup together. They sent letters to 50 do-good-companies (e.g. animal shelters, national parks etc) asking if they had any issues. This is interesting because so far I have only spoken to people who try to solve a problem they have experienced, or just had an idea.
Freedom is another often mentioned reason: The entrepreneurs like to work for themselves or are even genuinely scared to work for a boss. For example, a respondent explains: ‘Once you taste this freedom, you cannot go back.’ Another respondent says: ‘I could not work for a boss, then you are just making someone else rich.’ However, the entrepreneurs are somehow still depending on a boss because the possibility of ever going back on payroll gives them the confidence to take the risk of founding a startup in the first place.
Repeatedly the entrepreneurs mentioned that compared to startups, bigger companies do have more resources. ‘Then again, to get access to those resources, you have to apply for them,’ a respondent notes. In startups, you always have to take the burn rate in consideration. The burn rate is the rate at which the capital is being spent. This term is often mentioned by respondents that do not yet have revenue. The fast pace of working and the lack of bureaucracy is an important factor for why the entrepreneurs that once worked for large companies now found their place in the startup world. As their own boss, they are responsible for every decision they make and no longer ‘part of someone else’s bigger plan.’
When I ask a respondent about hobbies, he smiles: ‘Building this business.’
An important aspect they miss is that when you leave the office at a big company, you leave your work there. In a startup, not working hardly exists. The startup is always on their mind — This fact will be discussed more in-depth later on.
Where in previous jobs the entrepreneurs often got bored, the constant flow of new challenges, situations, and roles they have to take on, is a great match for them.
Short, J. C., Moss, T. W., and Lumpkin, G. T. 2009. “Research in social entrepreneurship: past contributions and future opportunities” in Strategic Entrepreneurship Journal, 3(2), 161–194.