One of the most common questions that entrepreneurs who meet me for the first time like to ask is, “Do you miss being an entrepreneur? Aren’t you ever tempted to go back and do it again?”
The obvious answer is yes. When it’s in your blood, it’s in your blood. I guess it’s kind of like crack (not that I know from experience). It’s addicting. I know this sounds superficial. If you’ve taken the roller coaster ride that is a startup – you know what I’m talking about.
But I’m very happy now. I’m enjoying being a VC. I thought I’d talk a bit about the differences I’ve experienced between being an entrepreneur & a VC – you know, from “both sides of the table.”
On Being an Entrepreneur
I was asked by somebody recently in a private message on Quora about whether the individual should leave his comfortable job to become an entrepreneur. You would think the obvious thing I would tell somebody is, “yes, of course it’s a great idea.” You’d be surprised. I often advise against it. I really have to know somebody’s personal story and circumstances to know whether it is suitable for that person.
In this particular case I wasn’t convinced it was a good idea from the limited information I had. The following is a short excerpt of what I said,
“… being an entrepreneur is very unsexy. Long hours. Time away from family. Low salary. High risk. High stress. It only looks sexy when you read TechCrunch. There is no shame in being an exec at a company or whatever.”
And I mean this. I’m sure everybody has their own definition of the attributes of an entrepreneur. Some of the ones I would identify are:
Not very status-oriented
Doesn’t follow rules very well and questions authority
Can handle high degrees of ambiguity or uncertainty
Can handle rejection,
being told “no” often and yet still have the confidence in your idea
Very decisive. A bias toward making decisions – even when only right 70% of the time – moving forward & correcting what doesn’t work
A high level of confidence in your own ideas and ability to execute
Not highly susceptible to stress
Have a high risk tolerance
Not scared or ashamed of failure
Can handle long hours, travel, lack of sleep and the trade-offs of having less time for hobbies & other stuff
The truth is that in my experience very, very few people really enjoy the “pure” startup environment: months with no salary, months with no live product and lots of trial, error & rejection. Even many successful entrepreneurs tell me that they’d prefer to do a buy-out the next time rather than go back to square one in a startup. NOT easy.
There are a larger number of people who enjoy coming on when an idea has become validated and thus “de-risked” but I still think this is a small number of people. And also there are a large number of people who would like to do startups in theory, but have high cost bases (family, real estate, school loans, whatever) that makes it very difficult to take the kinds of risks required.
And what gets lost in reading about the glamor of Facebook, Twitter, Zynga, Groupon and the like is that most startups fail. And for ones that do get sold often most of the employees don’t really make huge upside gains. You don’t read about these garden variety outcomes online – only the high profile exits or busts. Mostly you read about fundings, product releases, big valuations, and M & A. So readers of tech journals gain a bias of the chances of success.
I’m not trying to be negative.