HermannM

Stay in the Boat

In Interesting on April 27, 2009 at 2:05 pm

We are quickly coming upon “Business Plan Competition” season and I have to admire the gifted entrepreneurs who make a go at starting a business.  Given the economic environment, this may seem an unlikely time to forgo a paycheck in search of greater riches.  But starting a business is like having a baby, it’s never a good time; but we do it anyway.

The National Venture Capital Association recently published reports on 1Q09 and, as expected, the news was difficult to swallow.  Investment volume dropped significantly and many would-be entrepreneurs are opting against the promise of self-determination.  At the same time, many founders and employees of existing startups are re-evaluating their career options, present company included.  The primary concern is the likelihood and timing of exit opportunities and the resulting impact on our wealth.  In other words, is it worth it to stay the course.  My resounding answer is YES, provided you have tangible reasons for being at a startup in the first place beyond the expected financial payoff. In fact, there are many reasons beyond financial to be in a startup and I am extremely wary of those who are “in it” just for the money. Put another way, I would rather be surrounded by idiots who share my passion than geniuses who have neither courage nor faith.

The financial entrepreneur dates back to the 1850s with the San Francisco gold rush. When we were an agrarian society, hard work went hand-in-hand with seedtime and harvest. You put in a hard day’s work, you earned a hard day’s pay (obviously I am black and my ancestors probably didn’t get paid as much as your ancestors, but we were farmers nevertheless). And everybody ate. But then the concept of the “American Dream” was forever changed.  With the gold rush, America’s investment horizon and risk profile was altered and I don’t think we’ve ever really recovered. A few people struck gold and this inspired an army of paupers to head for the hills in search of riskless rewards and easy money. Not many found gold but the concept of the financially driven entrepreneur was forever ingrained in the hearts of the media and the American people.  There are too many entrepreneurs looking for easy money and riskless investments that it is screwing things up for the rest of us. We need to return to better days. If you are part of a startup or you are thinking about joining a startup, here are some reasons why you should stick with it.

  • You want to create real value
  • You want to establish a vehicle for self-determination
  • You possess a unique and valuable skill that cannot be harnessed within a corporate setting.
  • You passion, experience and attention to detail has allowed you to identify a business venture whose risk profile is lower than what “conventional thinkers” perceive
  • You would rather fail with your team of winners than win with a team of Enron-esque losers.
  • You have wisdom beyond your years, while lesser men & women might not.
  • You can’t stop thinking about the startup, its driving you crazy
  • You are an idiot blessed with a God-sized portion of faith

My company is HomeShop Technologies, Inc. and everyday is a struggle. I probably should have quit a long time ago were it not for the fact that all the above reasons apply, especially the last one. There are a lot of easier ways to make money. In fact, had wealth been my only goal, I would have become a plumber. I might also suggest becoming an electrician or drug dealer; both professions offer equally lucrative alternatives to hard work.  But if you are fortunate enough to come up with a novel concept that addresses a real and growing problem and you can attract a winning team, I have a feeling that a winner VC will eventually find you, if you whisper loud enough.  The goal for all of us is to create something that was worthy of the effort put in to achieve it. Now that’s an American Dream worth pursuing.

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  1. This was VERY inspiring! Thanks for sharing.

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