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You don't need a million dollars

When people talk about starting startups, one of the implicit statements is the idea of making it big - of building high-growth, outrageously profitable businesses that will make everyone involved in them rich. And in fact, high growth is even part of my definition of "startup".

VCs, angels, and in fact all investors, have a vested interest in seeing lots of people trying to build big businesses. It is well known that startup investment follows a "hit" business model, where most of the returns of a fund are made by a handful of big hits, which make up for a lot of failure. So pretty much all the literature produced by investors pushes founders to think big, aim for the moon, and give it their best shot.

However, my experience of talking to a lot of would-be entrepreneurs is that most of them simply want to run their own business, to escape the clutches of the corporate world, gain the freedom and security of being their own boss, and so on. The advice to swing for the fences is completely inappropriate in those cases.

Even if you do want to eventually "make a million dollars", which is a euphemism for making enough money that you can maintain a comfortable lifestyle for at least a decade without needing to work for it, aiming straight for the million dollars is often not the right approach. The reality is, it's much easier to make a million dollars when you're an experienced entrepreneurs who knows how to build a profitable business, than it is to do so from a standing start, straight out of the corporate world or university.

A better approach

My advice to people who want to be entrepreneurs but have not yet acquired the skills to build and run a successful business is to aim first for financial independence, rather than try to make it big.

If you can create a business that pays a sufficient percentage of your current salary, but is entirely yours (no investors) and enables you to have full control over your time, you're much further along the way to success (however you define it) than if you're still bound in effective peonage to some employer who owns most of your time.

Entrepreneurship is a career

The tech startup world of Silicon Valley, with is stories of insane working hours, mind-blowing successes, and its dismissal of serial entrepreneurs as crazy people, has perpetuated the myth of the startup as a singular event. You "decide to do a startup", you go and do it, and then you exit and retire, having compressed your working life into a short period and dealt with the money issue once and for all. But that's not how it is in practice - at least not outside the Valley.

I look around at friends and acquaintances who are entrepreneurs, people that I know personally, and all of them, successful or not, are serial entrepreneurs, and happy to be so. What will they do if/when they "finish" their current business? Why, start working on the next idea, of course! I look at myself, and, having run my own business for the last half-decade, I wouldn't have it any other way. Running your own business is hard, but it's infinitely better than letting your soul slowly grind away in a job you find uninspiring. Being your own boss has a lot of perks in terms of lifestyle and personal freedom.

Despite its reputation, entrepreneurship also a much more secure occupation than having a job. Being a competent, skilled entrepreneur means having the ability to seek out business opportunities and make money out of them. No matter the business climate - boom, bust, depression, recession, or even war - there are always business opportunities and so there will always "be work" for entrepreneurs.

Entrepreneurship is the safest career there exists today.

When you see entrepreneurship as a career rather than a single-shot lottery ticket, you don't need to aim for a million dollars. It's enough to start by achieving the "survival" level of success, then make sure that each subsequent step takes you further up the ladder along whatever dimensions of success you care about.


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