Only 10% of working Americans are entrepreneurs. It’s a surprisingly small number considering the amount of money self-help gurus make selling the myth of entrepreneurial elitism.
There is an ideology popular among business gurus that proclaims everyone who doesn’t work for themselves is a wage slave in need of entrepreneurial redemption. Many claim entrepreneurs are the “American Dream”, and unless you are self-made and in charge, you are nothing but a cog in someone else’s vastly more important wheel.
Reality is significantly different than this ideological myth. Self-employment isn’t always an option, it could very well make you miserable, broke and in a worse spot than you were when you were working. Relationships can become strained, your sense of self-worth can be reduced to nothing, and simply trying to pay your bills can be an enormous challenge.
If you ignore the falsehoods and stereotypes perpetuated by our culture and accept the fact that most people who choose this form of employment fail on a regular basis— being an entrepreneur quickly loses its sex appeal. In many cases, keeping your job, and investing your money wisely, provides a far greater chance of achieving financial freedom than risking it all on a hunch.
As children, we learn how to investigate the world around us. We learn simple deductive reasoning, the “five w’s” and the “1 H”. Many adults forget these early lessons and act on impulse or emotion rather than reason.
When it comes to changing your career, whether you are switching jobs or contemplating a radical change such as self-employment — the first question you have to honestly ask yourself is why.
Why do you want to try your hand at entrepreneurship? Are you out of work and desperate? Do you think you have an idea that nobody else has? Do you hate your cubicle at work? Are you worried about getting laid off? Do you feel like you aren’t getting the pay you deserve and think you can make more money on your own?
There is no right or wrong answer — you simply have to be completely honest with yourself. Typically people seek freedom or money. If you’ve been working for any length of time, being honest with yourself may be more difficult than you think. If it is money you seek its important to recognize that you likely will never find it — and if you do — it will likely take a long time.
I started my first business at 18. I was on my own at a young age and had nothing but a half-empty apartment. The jobs I was qualified for at the time were in glorified sweatshops full of miserable people. The reason I became an entrepreneur was survival. My resume didn’t match my skill set because of my circumstances. I couldn’t afford to go to school to become a Doctor or a Lawyer — I needed to survive — which was almost impossible earning minimum wage.
The question of where is an essential one. You can be an entrepreneur anywhere but that doesn’t mean all business ideas will work anywhere. Just like with real estate, many businesses are all about location.
I lived in one of the largest cities in North America in the 90s. The city was littered with “dot com” startups that no longer exist. I tried to get funding from Venture Capital a number of times without success. Eventually, I ended up pitching my idea to an incubator. I had written a business plan to create a mobile computer repair service, which was unheard of at the time. They liked the idea — but they didn’t think it was a good long-term bet, they invited me to join another project because they thought that computers would eventually fix themselves and my idea would be obsolete. As a teenager, I was able to pitch to a board of directors like my survival depended on it (because it did). I never ended up funding the business — but it was a minor speedbump in a city of millions. Thankfully, I turned down the offer to join one of their incubated companies, none of them made it past the dot-com crash let alone into the 21st century— ironically “Geek Squad” did.
The question of when was never an issue for me because I started so young. My apartment was wallpapered with post-it notes full of ideas. As disturbing as this was to my friends — I didn’t own a computer. I was forced to use the library system at a time when the internet was gaining traction and “normal people” were paying monthly for it. I was young, and I had nothing but a few boxes worth of belonging. It would have been a different story if I was mid-30s with a family and bills to pay.
When you have nothing you have nothing to lose.
When you work a job, you sometimes feel like a prisoner. The same can be said of being an entrepreneur. No matter what your situation is, you will have partners, customers, and suppliers that are essential to your livelihood. Being self-employed affords you some additional freedoms that other forms don’t, but it certainly does not free you from all obligations — no matter how much money you have.
Who do you plan on working with? Do you want a partner? Do you want to work with major companies? Do you want to run a retail shop by yourself in a small market tucked away somewhere? Every entrepreneur has to make these decisions. Being on your own has its pitfalls as does having a partner or multiple partners — it’s important to know who you want to work with (if anyone) as well as who will be affected by your work and income (or lack of income).
I didn’t know what I wanted as a new entrepreneur. When I stopped worrying about where my next meal was coming from I realized that without funding I couldn’t do anything in technology. I made the decision to partner with someone who knew nothing about technology — but who had the economy to support my ideas. Partnerships are not ideal in many cases — all of mine ended in disaster — but in the early stages of your career, there may be no other option.
Being self-employed isn’t unadulterated freedom, you will have to make sacrifices and kiss a few rings — especially early in your journey.
What do you want to do? Do you want to make a radical change? Do you love retail but you’re stuck in food services? Do you love technology but your company doesn’t let you touch anything worth more than a few thousand dollars? I’ve met many entrepreneurs who are the money-driven variety, they are just as happy running a nursing home as they are innovating in a fast moving industry. To them, it’s all about whatever makes the most money — and that’s okay. Knowing who you are and what you are capable of is the key. Finding out what truly makes you happy and making a career of it is the goal whether you are playing entrepreneur or intrapreneur.
A few years into my career I had datacentres all over the place. Unlike today’s flexible cloud infrastructure — I actually owned hardware and had to physically move it around. I had routers that were almost as big as me and racks and cages full of servers. I got to play with the technology I dreamed of as a kid — because I owned it. After going a few years without having a computer of my own, all I wanted was to be around technology and make more than I would bagging groceries. I always knew what I wanted but I had no idea how to get there or what I would actually be doing.
How are you going to do it? How do you explain to your spouse and your friends that you are going to abandon ship at your job and put your time and money at risk? It doesn’t matter if you are going to open an ice cream shop or innovate in AI or VR — people are going to think you’ve lost it — particularly if you are older and in a good career. Some people sell everything they own, rent an apartment, and go for it.
Like many Entrepreneurs before me — I put it all on the line. I got rid of the little I owned, let my lease expire, and moved into a house with my business partner. I didn’t have a bedroom, we didn’t have a living room — the entire house was transformed into an office. For a year I worked non-stop, only taking breaks to crash on the couch or eat when I remembered. It was a difficult situation to be in. I wasn’t getting paid beyond the “free” food and rent. I had nothing to my name. If I failed I literally had nowhere to go. Entrepreneurs like Mark Cuban seem to glorify this situation. They make it seem like everyone who wants to be successful has to couch surf or be flat broke before they find success and earn the right to be called an entrepreneur.
Being broke isn’t glamorous, it doesn’t make you smarter — hunger might be a good motivator – but its hard to think when all you can hear is your stomach growling.
I didn’t know what an entrepreneur was until someone called me one. I was convinced you had to be a rich CEO in order to be an entrepreneur — I had no idea that what I was doing had any title other than survival. My great grandmother started a successful chain of grocery stores, my great-grandfather owned a circus, my paternal grandparents sold fruit and art door to door, my maternal grandfather owned a steel company and my grandmother ran a freelance typing pool. They called work “work” and weren’t overly proud of the fact that they owned businesses. They paid themselves the same way they paid their employees. I never heard them mention anything about grinding, bootstrapping or unicorns let alone call themselves a fancy French name like entrepreneur.
It’s foolish to adopt the “entrepreneur or bust” attitude. It’s easy to look at people who are successful and want to be like them or think you could do a better job than them. The challenges that being an entrepreneur presents are very real and can take a significant emotional toll. If you are thinking of embarking on the entrepreneurial journey — make sure you know your needs, wants and motivations. You need to know the who, where, what, why, when and how before you get to the stage where you start dreaming up ideas, researching them and writing business plans.
If you’re convinced money is going to solve all your problems you’re probably already are starting with a handicap. The truth is — a dollar more than you need is all it takes to feel rich — you can obtain that in a myriad of ways. Too many people get sucked in and spit out of business for the wrong reasons, make sure you seriously examine every aspect involved in what you want to do. Entrepreneurship is a satisfying career choice for many, but for others, it’s an identity they try on and realize it doesn’t fit. Save yourself the expensive lesson and make sure you look before you leap.