Why start a business? There are plenty of good reasons.
One of the best reasons is that you had a problem. That problem led you to build a solution. And now other people with that same problem want your solution.
My dad used to have a pet store. As you can probably imagine, pet stores in the ’80s didn’t have the best computer systems. So he built his own. Eventually, this turned into a full-time business providing computer systems for pet stores all around the country. He succeeded because he was fixing his own problem.
If you want more stories of good reasons, check out any number of founder stories. You’ll find versions of that same story, as well as people that were solving someone else’s problem either as an employee or through a consulting relationship, and other variants that all revolve around solving a problem.
Yet lots of companies start for terrible reasons, and that’s what I’m talking about today. The list of these stories is much larger than the list of success cases. But the vast majority of them can be summed up in these three categories.
Here they are, the top three worst reasons to start a business, ordered from forgivably bad to completely terrible.
#3: Because You Love a Trend or a Solution
Five years ago, I would have used artificial intelligence as my go-to example here. But the new trend is — you guessed it — blockchain.
Everybody and their cousin are starting blockchain companies. Most of these will fail.
Many of them have zero chance of finding product/market fit because they are only focused on trend/follower fit.
They probably have a real use for blockchain, but is it 10x better than the non-blockchain solutions? Most of the time it isn’t. Most of the time it’s just 10x more complicated.
Customers aren’t stupid. Don’t treat them like they are. You can hope that people will be so impressed by your big words that they buy your product, but more likely they will ask you for proof.
Trend-focused companies are solution-driven. You don’t gain traction by selling customers on how well you understand your solution. You obviously understand it; it’s your solution.
But do you understand their problem? Did you build this solution to solve their problem or just because you liked the solution? They can tell the difference in how you talk about it.
Solution-driven companies communicate like politicians during a debate. They don’t care about the questions being asked. They just care about the quickest way to spin that into the question they actually wanted to hear. It’s always obvious, and — as I said before — your customers are not stupid.
#2: To Be Your Own Boss
Hate working for others? Ready to answer to no one but numero uno?
Then it’s time to…
Get over yourself.
You always answer to somebody. If it’s not your boss, it’s your board or your investors. Even if none of those exist, you still have customers, right? You answer to them.
The only way to be your own boss is to find an unclaimed plot of land, grow your own food, and live completely off the grid. Congratulations, you’ve become Ron Swanson. If that was your goal, you can finally rest easy.
Maybe you meant that you wanted more ownership of what you do. That’s perfectly fine. Pride in ownership is a great feeling. It’s just not the same as being your own boss.
Or maybe you meant that you want more freedom. You want to set your own hours, choose your own tasks. Again, that’s fine, although your clients may feel differently about it because, yet again, you aren’t your own boss.
But I find that’s not what people usually mean anyway.
When people say they want to be their own boss, what they are really saying — more often than not — is that they don’t play well with others.
I hear this from the programmer who doesn’t like getting suggestions for code changes. I hear it from the writer who doesn’t like their company’s formatting standards.
Maybe these people have a good reason to be unhappy with the way things are. The corporate ways may be too rigid for them. Maybe they’d be happier at a startup where they have a stronger voice with which to enact change.
But all too often they choose anger and complaints instead of making a reasoned case for their viewpoint. After all, their way is obviously the right answer, and it’s not their fault you don’t see that.
If you don’t get along with your co-workers and your bosses, you probably won’t get along with your mentors and your customers.
And without other people, you don’t have a business. Without other people, all you have is loneliness and failure.
#1: To Get Rich
That last one got a bit sad at the end, so let’s talk about money.
Who doesn’t want more money?
The internet and TV are filled with ads for get-rich-quick schemes, ways to make 6-figure incomes in just hours a day, and the real-life tales of those that have made millions with no experience and no education.
The internet and TV are also filled with dragons, ogres, and bi-partisan political agreement. You can’t believe everything you see on TV.
Starting a company to get rich is like using mouthwash to get drunk. There are other ways that are easier, more effective, and less likely to kill you.
When I founded a startup, my income went from six figures to zero figures overnight. I didn’t get a dime until we got funding. And even then I was only getting minimum wage.
Most businesses fail before they make any significant amount of money.Very few make it to the point of turning a profit. Care to guess how many can afford to pay their founders at their market rates? All the early money is being invested back into the company, not your bank account.
Founders only ever get their money back if there is a good exit. The company has to sell or go public for that to happen, and that can take years — if it even happens.
Still think it’s fine? Let’s look at what happens in the meantime.
Business owners that start with the intention of making money just end up being terrible business owners. They treat customers like a means to an end. They make decisions that are better for their bottom line than for their company. They just make the world a worse place.
If you want to get rich, go work for a hedge fund or a trading firm. There are plenty of great-paying truck driving jobs out there as well. All of those options offer a better chance of making good money than does entrepreneurship.
I love startups and small businesses. I think they are the coolest places to work, filled with the best people and the best energy. But that only happens if the right people are at the helm.
If this article has stopped even one person from starting a business for a trend, to be their own boss, or to get rich, I will consider my life’s work complete. Okay, that was too extreme. I’ll consider my morning’s work complete.
We need more startup founders.
But we only need the right ones.