This post was originally published in the Harvard Business Review blog on April 30, 2012. You can find that article here.
It’s been a banner year for start-ups. With the JOBS Act, the rise of international accelerators, the upcoming Facebook IPO, and the mind-blowing $1 billion Instagram acquisition, you can be sure that droves of young, ambitious founders will be jumping on the start-up bandwagon.
The refrain is all too familiar: If you want to change the world and get rich in the process, then just go for it. In fact, in our book Passion & Purpose, several stories from young leaders involved start-ups. The problem isn’t what the message says, but what it doesn’t. What it fails to say is that the start-up life isn’t for everyone.
In The Lean Start-Up, Eric Ries talked about vanity metrics — numbers that create the illusion of success, rather than validate actual progress. In the same way, vanity entrepreneurs have deeply held illusions and misconceptions about the realities of start-up life.
Vanity entrepreneurs start new ventures for the wrong reasons. They start companies because it’s the cool thing to do. They’re hypnotized by the enormous myth-making apparatus of modern mainstream media, the coveted slot on Techcrunch, and the likes on their Facebook updates. They overestimate the glamour and underestimate the grind. And as ubiquitous stories of success spread in social media, these illusions become powerful self-delusions. All founders have this vanity within them, in varying degrees. In a way, it’s what drives them to succeed. What matters is the extent it takes hold of their judgment.
As founders can attest, what you encounter deep in the start-up trenches will be far from your mental projection and expectations of the future. The harsh reality is that being a founder is more an exercise in psychological readiness. In the intense ups and downs you’ll be going through, your emotional maturity will matter more than your skill set. It requires having the social intelligence to pick the right cofounder. It’s learning to live with lower pay and higher sacrifices in exchange for a very uncertain future benefit. It’s being responsible for the people in your team, taking the blame when they screw up, but sharing the credit when they succeed. It’s juggling to manage your team, customers, investors, and strategic partners all at once. It’s learning to balance the freedom creativity required to prosper with the operational discipline to hit the next milestone. Layer this on top of the usual personal and family pressures, and it’s hard to see how any sane person would choose this path.
So how do you know if you have a vanity entrepreneur in you?
You are attracted to titles. If you were always concerned about being “Managing Director,” you’re probably not ready to dive into a path that requires you to worry about everything from closing that deal to taking out the trash. A simple way to verify: See if that internship you had freshman year had an over-the-top title.
You need constant affirmation. As my coauthor Daniel Gulati pointed out, the typical corporate job is filled with variable rewards in the form of promotions, praise from peers, and publicity. In start-ups, you lose the vast majority of these positive reinforcement mechanisms. Validations of progress aren’t as clear cut. You need to be ready to endure the complexity when some pieces of data tell you that you’re wrong, while others say you’re doing a great job.
You believe a start-up is “good on the resume.” In a recent Techcrunch article, Geoff Lewis talked about the MBA who felt a start-up stint would be good for his growing list of achievements. “Even if the startup ends up going nowhere, graduating from Y Combinator would be such a great credential,” the MBA supposedly said. Think twice if your resume gets more share-of-mind than building great products.
Your lifestyle is keeping you from diving in. If the major stumbling block keeping you from founding a start-up is the need for financial security to buy that latest designer bag or go on that trip to New Zealand, then you’re probably not in the right mind-set yet. Not only will you need to take a pay cut and spend less, you’ll have to push your employees to do the same by thinking of creative solutions to conserve cash in order to stretch your runway. Bootstrapping is an art form, and your lifestyle choices will get in the way of that. Don’t force it.
We’re all susceptible to myths. The new zeitgeist is that entrepreneurship is the be-all and end-all path. But the first step in deciding whether to be a founder is to manage the vanity that’s in all of us, and not be blinded by the herd.
The first step in deciding whether to be a founder is to manage the vanity that’s in all of us. Tweet
Vanity entrepreneurs start new ventures for the wrong reasons. Tweet
The harsh reality is that being a founder is more an exercise in psychological readiness. Tweet