Twice a year I teach a class on entrepreneurism, which has always struck me as something of an oxymoron. How do you learn to be an entrepreneur in a classroom? Entrepreneurs, by definition, do: they work long hours to build something from nothing, they neglect families and friends, they drain bank accounts (their own and others’), and they grind it out.
I’ve co-founded three startups (in ecommerce, music and ad tech), and none of my prior corporate or university experience prepared me for the all-consuming mental and physical ultramarathon of startup reality. And I’ve heard the same from nearly every other successful entrepreneur I’ve met.
This disconnect is due, in large part, to media’s obsession with casting heroes and villains rather than describing real people. One year (say, 2014), entrepreneurs are described in the press as heroes of innovation, building “unicorns” and amassing fortunes. The next year (say, now), public markets wobble, valuations decline, and all the talk is of “unicorpses.” What makes a great story going up makes an even better one going down, a deliberate sensationalizing of the startup business cycle that VC Bryce Roberts has aptly dubbed "startup porn."
Accuracy is the first casualty of sensationalism, which prefers to drink at the trough of mythology and archetype. In the world of entrepreneurship, these startup mythologies take a couple of forms:
The Romantic Hero
The world-changer, the creative genius, the tech celebrity. By the time they receive coverage in popular media, successful entrepreneurs are fully formed, as if sprung from the head of Zeus. Their gritty back stories are elided, save for the icon biopic (Steve Jobs). Unsuccessful entrepreneurs -- a much larger number -- receive no coverage at all.
There is nothing romantic or glamorous about being an entrepreneur. Elon Musk, one of the most consistently successful entrepreneurs in memory, likened the experience to “chewing on glass and staring into the abyss.”
Founding a company is an inherently creative act, a full-on commitment to an original endeavor with an inherent risk of total failure. It is a brutal grind that most people are not cut out for. If you never toiled through crappy summer jobs as a kid, how are you going to react when your startup has three months of runway left?
The most important personality trait in successful entrepreneurs is not creativity or charisma. It’s grit.
When having a billion dollars ceases to be astonishing, the misconception grows that startups are the quickest path to great wealth.
In reality, however, 90% of startups fail. The 10% that don’t fail take six to eight years, on average, to see an exit (the part where you maybe make some real money). First-time founders would be wise to ask themselves whether this is how they want to spent the bulk of their 20s or 30s. For many, it is -- but it’s a total lifestyle choice, and not one to be made lightly.
This is not a game where the best idea wins; it’s a marathon where hustle, grit, and market savvy sweep every medal and every podium.
Cultures that brand risk-takers as fools rarely produce anything original.
Despite the harsh reality described above, it is still better to have tried and failed than not to have tried at all. Failures becomes lessons that inform the entrepreneur’s next startup, increasing its probability of success. And make no mistake: It’s the cumulative innovation driven by the world’s successful startups that is most positively transforming the world we live in.
Even with all the talk of “bursting bubbles” and companies like Box and Square losing value, we’d be unwise to dismiss the staying power of disruption. The average lifespan of an S&P 500 company has shown a consistent decline since 1990, and is projected to decline even further in years ahead. It has become harder than ever for incumbents to stay on top.
However, incumbents often delude themselves into believing they have an insurmountable wall around their business, particularly during periods when startup failure stories fill the airwaves. Consider this 2010 quote from Time Warner’s CEO as he dismissed the threat of Netflix: “It’s a little bit like, is that Albanian army going to take over the world? I don’t think so.”
Sometimes the Albanian army wins.