Entrepreneurs and Startups are Overrated
A friend’s former coworker, who’d stayed at the large international consulting firm where they’d worked before my friend left to launch his business, has a mansion in a prestigious neighborhood and a ranch in Montana. Now a partner, he has an annual income in the upper six—maybe lower seven—figures.
Maybe one day he’ll sell his company or grow it enough to provide him his pal’s earnings. Yet he can’t know this for sure—and he can feel relatively certain that he’d have attained higher income already if he hadn’t started his business.
Our culture over-romanticizes entrepreneurs and startups.
I have three companies in operation—so I don’t knock business ownership. And I don’t deny that entrepreneurship has benefits. Yet I find the notion that real success means starting a company or that entrepreneurship provides the only real route to prestige all kinds of flat-out wrong.
Spending a career climbing the ladder at an established, diversified, multitier corporation has definite benefits—and would undoubtedly prove the best career decision for the vast majority of people:
Entrepreneurs sometimes perform the same work for years—even decades—and regress to fill previously held roles. If another person cannot do something at a given moment, the business owner must. In large corporations, careers move onward and upward—not up, back, and sideways, often all at once.
Typically, an employee at a large company reports to one person. Entrepreneurs report to everyone: Staffs, prospects and customers, money people (banks and investors), and markets.
In sizeable corporations, people may have issues—and they won’t concern you. Entrepreneurs own every problem.
Employees can leave and never look back. Business owners—especially entrepreneurs with employees—cannot easily jump ship.
Rising through the ranks at large companies, employees can gain varieties of experience. They don’t need to wait for the company to gain enough size to give them new responsibilities.
Staff at major corporations can petition for resources to fund projects, hire employees, and invest in new ventures. For the same activities, startups must raise outside money—not an easy or straightforward proposition.
Entrepreneurs get paid last—and often don’t receive full financial returns until their companies sell (and sometimes not until a couple years after that). And as with my friend, business owners may never make as much as they would have made at large corporations.
Entrepreneurs have horrible benefits—if any. Health insurance? Paltry. Vacation? Huh? Sick leave? Funny. Even when not in the office, you work.
The startup mystique partly stems from romantic notions of high risks with doubtful returns, brutal work hours, and vicious competition. Heads up: Admiring something from a distance isn’t the same as living it.
Wearing multiple hats and doing work no one has trained you to do sound fun—until they become daily reality.
I’ve joked that “entrepreneur” means “misfit whom no one would hire for the work she wants to do.” Some square pegs can only find fits and realize goals through starting businesses. Does that make ours better paths than working up ladders at stable corporations?