It's risk/reward. For lots of people, uprooting, changing their job/family circumstance at X time is too much risk--and a lot of people are probably right in that regard. There is no assurance that your bold venture will succeed, despite your planning, ambition, etc. And if it was all but certain, it wouldn't be very bold, it'd just be common sense.
There is usually another reason (and I share it) : they don't have enough money to start their own company without it being too big a risk. It is an order of magnitude easier to take risks when you already have enough money so that your family is not at stake...
The reality is that money lets you "take risks," and money gives you options (in this world).
To be honest, I don't think that starting your company with the "risk" that you might move back in with your parents if it fails... is at all a meaningful risk.
This article shows how difficult it is for many to accept the idea that an individual would choose an entrepreneurial path over a 'regular job.' Why would anyone take the risk?
We take risks, but they are hopefully calculated and well thought out, not reckless. What good is life without taking some risks, especially if you are confident in yourself and your abilities?
"Laws, everything's a chance, isn't it?" - Tom Cullen, The Stand
its not always fear of failure. Sometimes you have to pragmatic too. For instance, doing a startup in Bay area with a family is not practical for a lot of people, especially given the current rental/living expenses.
Many people are encouraged to just "go for it" because if they fail they can always go back to an ordinary job and try again. However the risk equation changes when you have young children you care about since (in most cases) you're the only parents they have and they are only young once. Even if your startup is successful you'll never be able to get back the time you miss with them.
1. Some people take risk because they CAN and probably what they have seen from their family/parents (a.k.a rich/privilege). It is the cool thing to do.
2. Some people take risk because they WANT to regardless of their family situation (I am in this category). I just cannot see myself working in a job.
3. Some people take risk because they HAVE to. They have nothing else going on for them and doing their own thing is the only thing they can try. I am sure there are quite a few entrepreneurs in this category. They were desperate and just tried something of their own as the only last option.
So yea, entrepreneurship can never be generalized. We can argue on the percent breakdown b/w the 3 categories above. CAN, WANT, HAVE TO
For folks without responsibilities like kids, aging parents, etc. I really don’t think startups are very “risky”.
What’s the worst that happens? It doesn’t work out and after five years you go get a job in boring corp corp with an incredible skillset and vast life experience.
You’ve sacrificed some income perhaps, but so what? People make choices like that all the time. Your working career could easily be 40 or 45 years, 5 is not that much and it’s not like you went bankrupt. Your skillset might even mean you more than make up for lost time.
I don’t understand the talk of “risk” unless you’re Elon Musk betting the farm on your businesses and facing bankruptcy.
Work in your spare time until you have something Angel worthy, then get a modest salary to get to the next level and on you go. Or just bootstrap.
Is it easy? No, it’s the hardest thing you’ll ever do. Is it risky? Not so much.
So why do Canadians and Brits see it as a risky thing to do? I think they don’t. What they see is _uncertainty_ - where will I be in six months? What if it doesn’t work out? What if I fail and people judge me? They don’t like uncertainty. That is conservative with a small c. Probably it’s a cultural artefact rather than anything remotely rational. The problem is you end up in an equilibrium where the society is conservative (“what you wanna do wasting your time with that”) so the ambitious people just leave and go to somewhere like (parts of) the US where people want to change things, make things, improve the world. And the conservative society gets more conservative until it is ossified.
Startups carry high uncertainty but not high risk.
But to me, this is the biggest myth of all: starting a business has risks to be sure. As does planning your career path in the corporate world. Your skill could get automated or outsourced. You could get cut at a critical point in your career.
There is no "safe" path these days. There are paths that seem to have less risk, but you can approach business in a way that limits your exposure easier than you can do that with a job (most jobs require an investment of 40+ hours per week). I think Patio is an example of this.
Starting a startup is not equally risky for everyone. Some people have their own safety net (family, saved up money, etc) while others don't, making it too big of a risk to start a company.
Most entrepreneurs I know didn't take any crazy risks. They knew they'd be ok if their startup failed. Many people don't have that luxury.
You can always lose your own life, pretty much. If you can go back to your old room at your parent's room while you find a job and start earning again, sure, it's easy to take risks (I've done it this way).
On the other hand, if you come from a rather poor background and have no one to fall back on, finding yourself with a failed company, in debt, maybe kicked out of your place because you can't pay rent, I'd say that rather terrifying.
I'm all for entrepreneurship, but if failing means living in the street, then let's just not start a company for now.
> Cause (in case I’m smart enough at all) I have no courage to risk and implement a working thing by myself
The risk of the same action (e.g. spending a year on getting a startup to work out) differs based on your background, too.
Let's say you make minimum wage. That reduces the amount of money you can invest in your startup, lowering the chances of success while also shortening the runway. The risk here is might even be homelessness.
If you are backed by a reasonably wealthy family, you can invest more and your runway is longer, making it more likely to succeed (or at least fail not that hard). The risk here is having "wasted" one year of your life.
This doesn't even take into account other factors like family/friend connections.
Of course there are always counter examples to this, I'm just talking about probabilities.
I for one agree with the author's point. I live in SV, working on a seed-funded start-up, and yes, it is a lot of personal sacrifice and risk. And, yes, a lot of founders risked their own money, careers and family relationships building their companies. Read "Founders At Work" for some examples.
I definitely would not risk my family or my retirement account, but I do know people who did and succeeded (and people who failed too, obviously).
I can easily imagine a class of people who would become entrepreneurs if they didn't feel like the risk was too big. Especially people families -- not only might you be risking something on their behalf, you might also have a spouse that's difficult to convince (http://www.inc.com/magazine/201209/meg-cadoux-hirshberg/livi...).
I think you have misunderstood me. I see it the same way as you do. I’m ready to spend it all while trying, trying, trying... But people in a similar situation as mine keep telling me that I’m bold for taking such a big risk, that they admire my courage, and that they don’t have the same risk appetite as I have. What I’m trying to communicate though is that what I’m doing is not risky or bold. I’m not risking anything consequential, even if I lose 90% of my wealth.
From my own anecdotal observations, people with little to lose (no wealth, early career) are much more willing to start their own business than someone with a successful career and $1M in the bank. This was the point of that paragraph you quoted.
It's a risk that comes with the territory it seems.
To be able to start a startup you already have to be a bit out of your mind.
You have to massively underestimate how hard the problem is and you have to massively overestimate your own ability to tackle it. And then you have to persevere once you have come to fully appreciate these facts.
I'm pretty sure that any successful entrepreneur has been in a situation where he/she said to themselves "Now why did I think this was a good idea again ?".
Then they got up and worked/bulldozed their way out of it.
I think you are definitely onto something, although it's a temporary mindset.
I've worked at a startup for exactly the reason you describe as type #2. Consider it practice for my eventual startup (when I will join #1).
But after graduation I declined going back to the startup world and choose path #3. I did this for a very specific reason: stability while I save up some money to let me do #1.
But I disagree with your use of the phrase 'risk everything'. There is almost no way to 'risk everything' at graduation because you have nothing. I thought about going straight to #1, but it would have required living at home with my parents. Instead I moved out and got a job. If you are living at home and being supported, you are almost risking nothing. If your startup fails while your living expenses are $0, you haven't fallen at all.
The risk for someone to jump later in life is far greater. You have savings people can come after if you go bankrupt. You have bills and responsibilities. You truly are risking something. Living with someone else's support right after graduation really isn't risking anything.
Except in a startup you can discover that the high hill is a deep valley. Doesn't mean anything really. Only you can decide if you want to take that risk or not. I stopped pushing people one way or the other simply because only they can know what is best for them.
Another option is to work in a big company. After a few years there will be nothing new for you so you can bootstrap something while still having money for... food :)
I think this is the issue. Starting a company is a lot riskier than working at one. To do that you usually need capital and/or someone who is willing to work their ass off for peanuts for a couple of years. The only reason people will take risks is for outsized returns.
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