Having been involved as a founder, investor or early-stage employee at over a dozen startup ventures, I have a few entrepreneurial chops to draw upon. One of the companies I helped start was eventually sold for $500 million and a few didn’t make it, with all the others falling somewhere in between. So why did I participate in these speculative ventures and why do so many of us put our time, energy, passion and finances into launching a new business. Here are a few of the motivating factors and my brief thoughts on each.
Flexibility. Most entrepreneurs crave freedom from the 9 to 5 routine. What they often end up with is a more demanding schedule than being a so-called wage slave, but the point is; they have more self-determination and flexibility, and these can be precious commodities.
Desire to be your own boss. How many times have you had a desire to fire your #$%& boss? In my career I’ve had some terrific bosses but also a couple that made my working life painful. I’m sure the same is true for you. One answer to this problem is to fire the boss and go to work for yourself. But consider this carefully because if you don’t have the right discipline, skillset and financial backing, you may prove to be a poor boss indeed.
Money. The desire to build wealth is a big driver of new businesses. There is a misconception among some that entrepreneurs are getting rich but this is not necessarily the case. According to Payscale, the average small business owner earns $71,600 per year. Many make more but a large number make less – sometimes far less.
Passion about a new idea. Although I tell my entrepreneur students not to fall too much in love with their idea (since most businesses need to pivot) – many great ventures were started based on a dream about how a particular product or service could solve a large problem. Working on something that really matters to you can reap large dividends.
Lifestyle. Whether it is the freedom to work from home, or to take extra vacations, there are large lifestyle implications to being a business owner (good and bad). One of the best ways to transform your life is to combine a hobby or avocation with a marketplace need. As Harvey MacKay put it, “Find something you love to do, and you’ll never work a day in your life”.
Security. Like several of the other factors, security is a double edged sword. On the one hand, if your startup is successful, you can create an independent economic asset that provides you way more security than the average corporate job. Conversely, small businesses do have a high failure rate so the security is relative.
Learning. Entrepreneurs sometimes start ventures because they are fascinated by a particular subject and want to use the business to develop their skillsets. Of course you do need enough knowledge about your business to satisfy customers out of the gate.
Fun. Never underestimate fun as a driver of new business startups. Of course not all days in an entrepreneur’s life are blissful, but once the company is established, very few business owners want to go back to the paycheck lifestyle.
There are other factors motivating new venture creation – for example: an inability to find suitable employment, the need for part-time income, or simply for the opportunity to test oneself in the marketplace. Regardless of why you choose to take the entrepreneurial path, make sure you have a good blend of solid reasoning and strong motivation. And remember that the “why” you do something is often more important to success than what you actually do.