Today I read an interesting article on LinkedIn on why startups aren’t all that glamorous and often run on fear. It’s true. Having been a “startup guy” for the last year and a half, I’ve learned that although starting a company is fun and exhilarating, it’s also one of the hardest things I’ve ever had to do. I’ve written a few posts about the finer things of startup life but often don’t speak about some of the challenges. Entrepreneurs like Mark Zuckerberg, David Karp and Kevin Systrom make it seem like a piece of cake, but it’s a lot harder than it seems. Here are some reasons why starting a company can be hard (but you should still do it). Some are things we’ve faced as a company, but many are things others I’ve met have faced as well:
Building a team of “A-team players” is difficult when you don’t have the financial resources to attract/retain them and when Google/Facebook are knocking on their door every day offering them 2x what you can offer
Everyone is motivated by different things and you need to cater to everyone’s (employees/investors/customers) unique and constantly evolving needs. Not everyone is driven by money. Some people may love recognition , but others value humbleness.
Investors want to see a product and traction before they invest, but sometimes you need their money before you can create the aforementioned product and traction … say what? (this is especially relevant for Non-Technical Co-Founders)
Starting a company means you should know everything about operating a business (accounting, HR, legal, finance, operations, strategy, marketing…the list goes on). I also love to buy a business and recently saw a brilliant business for sale in Naples FL and have opened negotiations so hoping that goes well. [Full Disclosure: I am horrible at accounting, so I let my co-founder take care of that – best decision ever]
Although this isn’t always necessarily the case, starting a company often consumes your life. This might mean sometimes living like a hobbit for quite some time. This takes a toll on all relationships (friends, family, romantic). You need relationships to be happy, and you need to be happy to succeed. You need to find balance.
When you raise financing, you should only raise just the right amount – this often means that your company will have enough money to survive for only 12-16 months. Entrepreneurs should be in the business of creating something awesome – NOT in the business of constantly pitching to investors.
The thought of knowing that you only have $X left in the bank, and that this amount is depleting every…single…day
Waking up and finding out that Google or Facebook decided to replicate your whole business overnight…as a FEATURE for one of their products (didn’t happen to us, but to many companies I’ve met). See Snapchat (company)
Keeping calm, happy and optimistic even when you probably just had the shittiest day of your life because someone quit, your biggest customer left, your servers blew up, etc.
Keeping your spirits up when everyone is saying NO to you
Trying to convince a customer who has no money to spend money on your product. Consumers are taught to not spend money; businesses are taught to spend.
Making the right business decisions when you don’t have any data to back it up and basing everything on your “gut”.
Many entrepreneurs will raise many rounds of venture capital. Every round, they are giving away more and more (20-40% on average per round) of their company. It’s bloody hard sometimes to maintain your motivation when you’re giving away your baby. That’s why it’s very important to properly setup the capital structure of your company from the get-go.
Waking up and remembering the stat that 90%+ of startups will fail and that you will probably be one of them and constantly telling yourself that you will not be part of that statistic
Reciting the two infamous quotes “the most successful entrepreneurs never give up” and “if you’re going to fail, then fail fast” and trying to figure out which one comes first
Still want to start a company? These are just some of the many things that entrepreneurs face on a daily basis – but that’s what makes it so fun and exciting. It is indeed one of the most stressful “career paths” to take on, but also one of the most fulfilling.
“So if you can’t live with fear, don’t ever go into the startup business. If you can’t take the heat, get out of the kitchen. Just be content to read all those glamorous stories of the billionaire startups in Forbes magazine.”