Being a start-up entrepreneur is glamourous, right?
Friends and family are giving you congratulatory pats on the back to support you. The media are celebrating your derring-do and brilliance. Riches are turning up in your bank account.
If only.
Here is a brief overview of what you are really about to experience, and my hands-on advice on how to deal with it.
The 3 short-term pains you are likely to experience
If you are about to start your own company, you will probably expect the first of the following three pain points, underestimate the second and be somewhat surprised by the third one.
- Loss of disposable income.
- Loss of leisure time.
- Loss of status.
Obviously, if you resign from your regular job to focus on building your own company, you’ll lose your monthly income. That’s the obvious one, and I’ll only get back to it briefly towards the end of this article.
What people underestimate in most cases is the amount of time it takes to build your own business. Not just in terms of the number of years to reach profitability, but also with regards to the man-hours that you need to put in. The amount of leisure time you’ll have available to yourself will drop dramatically.
If you think that you’ll be able to go on the kind of holidays where you turn on your email autoresponder or use weekends to “switch off”, then you should probably stay in your employed position. As an entrepreneur, you’ll always compete with lunatics who are willing to pour their entire time and energy into their venture. How do you intend to compete against those? Unless, of course, you are such a genius that you can outmanoeuvre them while you are having breakfast. Such people probably exist, though I am yet to meet even just the first one of them.
The more surprising pain point is probably the loss of status and recognition. After all, isn’t it widely hailed that becoming an entrepreneur is the greatest thing on earth?
Nope.
Unless you are another rare exception, you are more likely to experience not just one but several of the following short-term pains:
- Loss of your association with a company that is already successful or with a brand name that is widely recognised (or both).
- Loss of your easily classifiable job title. And let’s face it, people who call themselves “CEO” of their one-employee start-up look a bit silly.
- Going from working in a “proper office” to being based in your kitchen, your basement, or some transient co-working space.
- Having to become the jack of all trades of your company, up to and including emptying your bin.
- Turning down social occasions such as trying out that fantastic new, expensive restaurant, since you can no longer count on your fixed monthly income.
- Becoming a boring workaholic with long working hours who your friends secretly feel sorry for (even though they will officially congratulate you on your decision).
- A much less impressive product or service that your new business focusses on, compared with your previous employer.
And many more variations of these points…
The bottom line is, it’s all much less glamorous than you might think.
My own recent experience
After ten years in three CEO positions, I stepped down from the last one in 2018. Instead of pursuing another position somewhere at or near the top of an existing organisation, I decided to disrupt my life and do something different.
Based on much careful deliberation and relatively broad experience in media-related businesses, I decided to start two blogs that I am aiming to turn into lucrative commercial enterprises.
If you are in your early/mid-40s and someone asks you what you do, try the following line on them:
“I am a blogger.”
You might as well say that you are homeless.
There are some sectors that make your new start-up sound glamorous. Right now, that would probably be Artificial Intelligence. Back at the turn of the century, it would have been any dotcom related undertaking. These “hot” sectors make you sound like you are really with it. But they are the exception, and most people end up setting up their business in much more mundane sectors.
“I am a blogger.”
You might as well say that you are homeless.
I decided to start something on the opposite end of the glamour spectrum. If you want to make yourself sound like a loser, tell folks that you have set up a blog as a way to earn money.
To myself, it’s entirely clear that I’ve made the right decision. I just need to look at:
- The growth rates and return on equity that the first of my two blogs (undervalued-shares.com) has achieved after only ten months in operation.
- The overall lifestyle that my decision has enabled me to adopt. Virtually no meetings, no corporate BS, and complete freedom to travel to anywhere I like, at any time.
- The amount of taxes I pay now that I have been able to base myself out of one of the world’s most tax-friendly online business havens (Sark, in the Channel Islands).
Obviously, people have their preconceived ideas, and they don’t know any of these details.
When I tell random strangers what I primarily spend my time on right now, it mostly leads to folks looking at me with a combination of bemusement, pity, and confusion.
Depending on how I feel that moment, I often simply keep my thoughts to myself: “Little do you know…”.
Sometimes, I throw one or two factoids about my life at them. Which then leads to an almost inevitable: “Oh? Wow!”
You can turn these situations around if you have the necessary experience and a few concrete, powerful metrics. But it’s not like public recognition would jump right at you just because you are running your own business or side hustle, unless you happen to be active in that rare, star-of-the-moment sector that everyone adores.
This fall from grace in the eyes of most people will be the case all the more if you previously did something that made it easy for others to put you into a specific drawer and which tied in with their existing belief system.
If you do work in a sector that is perceived to be glamourous, you need to ask yourself whether you aren’t merely part of a peaking cycle? The dotcom boom and subsequent crash come to mind. It was cool joining it in 1999, but the public’s enthusiasm was also a clear sign that things had peaked.
Either way, here are a few suggestions on how you can successfully deal with it all.
Five steps that will make your life as an entrepreneur easier
I have found the following steps and measures to be fairly effective in dealing with some of the downsides I describe above. They come in no particular order, and some will be more relevant to you than others.
1: Keep your eye on the prize
I hold some relatively strong views about the future of media during the 2020s. I didn’t set up two blogs because I had no better idea what to do with my time, but because I want to latch on to several secular trends I have identified, and have lots of fun doing so while making heaps of money off them. Some of these trends are in media, others in different sectors and walks of life.
Some of these trends I want to capitalise on are vastly outside the scope of commonly held views. They are comparable to saying in early 2016 that Brexit and Trump would happen. (Incidentally, I said that about both.) Not all views make you popular with your peer group, but unpopular opinions can also set you right on-trend.
Invest heavily in researching your future business, and work towards creating a few early metrics that will give you both confidence and a useful tool for communicating your initial success.
I did my research at the time I started, and by now, have some initial metrics showing that my first steps did go in the right direction. Based both on my research and those initial metrics, I have 100% confidence in the prospects of my business.
Put simply, I can laugh off anyone who sends bad vibes of any kind my way. It can be as simple as that.
My advice: Invest heavily in researching your future business, and work towards creating a few early metrics that will give you both confidence and a useful tool for communicating your initial success. It will steel you – quite literally – against the inevitable scepticism, bad vibes, and ridicule that you are going to face. Some of which, by the way, will be driven by envy more than anything else. So many people would love to be an entrepreneur, so few people have the guts to do it.
2: Do some careful expectation management
You are likely to experience your new life as an entrepreneur to consist of two phases.
Phase 1: Honeymoon
All-round excitement when you set up your new company.
Duration: Four weeks to six months.
Phase 2: Reality
All-round boredom because it all takes sooooooooooooooo long.
Duration: Most likely, years.
You can save yourself from a lot of pain and awkwardness if you keep expectations low.
Obviously, when you speak to potential funders during fundraising, you’ll need to be very ambitious.
For other groups, you’ll want to give off very restrained messages. It counts for family members and friends, former colleagues watching from afar how you are doing, and similar people. Quite simply, apply this approach to anyone who can affect your mental wellbeing and overall level of confidence purely by how they behave towards you.
My advice: Purposefully set low expectations among those people where you are free to do so, and then overperform. Never, ever put yourself at risk of doing the opposite.
3: Carefully reconsider who you hang out with
As the old saying goes, who you hang out with has a significant effect on your life. Some like to claim that you are the reflection of the five or ten people that you spend most of your time with. Much as this is hard to measure, I can see a lot of truth in it.
If your decision to become an entrepreneur represents a profound change to how you used to live, maybe it’s also a good time to make some changes about who you spend time with?
You becoming an entrepreneur and thriving in your new role, does, to a good extent, depend on surrounding yourself with the right kind of people.
If your decision to become an entrepreneur represents a profound change to how you used to live, maybe it’s also a good time to make some changes about who you spend time with?
It’s not easy to give specific advice about this touchy subject. However, I have seen many a case where I thought: “That start-up entrepreneur really needs to reconsider who he/she hangs out with.”
There are complex nuances to this. E.g., I tend to find that people my age (40s) tend to be primarily focussed on not giving up anything of what they have already. Obviously, this is entirely unrealistic to achieve if you set out to create your venture. For myself, this has long resulted in primarily hanging out with a slightly younger crowd, though exceptions make every rule.
My advice: Anyone who is persistently negative about what you do or has a lifestyle that is diametrically opposed to what you are trying to achieve is probably best weeded out from your inner circle. You’ll need all the positive energy around you that you can get.
4: Decrease your costs of living in an intelligent way right from the start
The loss of income when you go independent is a big issue. Unless you are sitting on massive savings or have made an inheritance, you will have less cash to fund your lifestyle. One way or another, this will affect your social or family life. You’ll fall behind your peers and find yourself excluded from some social occasions where it’s too expensive to take part.
Throw in the fact that virtually any new business will take a lot longer than anticipated before it throws off the amounts of money that you are dreaming of. It’s part of human nature to overestimate what you can get done in a year (and to underestimate what you can achieve in ten years, but that’s another subject).
Amongst friends and acquaintances, I have seen SO many cases along the following lines:
- A new business was set up, but the founder had savings in the bank.
- The founder optimistically proclaimed: “Thanks to my savings, I can set up my new business without having to cut down my standard of living.”
- Two years on, he/she was back to working as an employee somewhere.
This whole idea of being able to become an entrepreneur but not having to accept any change in lifestyle is one that I see over and over again. If I got a dime for each such delusional individual I have ever met, I’d be rich as Croesus.
For most people, the right strategy will be:
- Cut down your costs of living as drastically as you can.
- Extend the cash-runway of your business to as long as you feasibly can.
- Make yourself independent from having to accept any other work to earn money, so that you can spend 100% of your time focussing on your new business.
- Turn this attitude into a selling point of your business; potential funders will love it.
With such a mindset, you’ll also gain the wiggle-room to occasionally treat yourself. Are your friends travelling to a wedding in Greece? If your cash planning is generally based on extreme austerity, you can more easily get away with occasionally avoiding a bit of awkwardness that is caused by having less disposable income than your employed peers.
This whole idea of being able to become an entrepreneur but not having to accept any change in lifestyle is one that I see over and over again. If I got a dime for each such delusional individual I have ever met, I’d be rich as Croesus.
My advice: You can’t be harsh enough with cutting your living expenses right at the start of your new venture. However, this also buys you a bit of additional freedom when you really need it. What usually kills peoples’ plans is the idea that nothing needs to change at all. That strikes me as being about as realistic as having children but expecting that your life will stay the same.
5: Gamify these challenges
With a bit of creativity, you might be able to turn some of the challenges I outlined above into a bit of fun.
Are you afraid of cutting your life’s running costs?
Take a page out of the playbook of Paul Graham. He turned the whole mantra of entrepreneurs having to aspire to become a unicorn onto its head. In 2008, Graham created the term “cockroach” to describe start-ups that are virtually indestructible because of their founders’ tenacity. The mantra “Don’t be a unicorn, be a cockroach” has made him widely known, and led to a whole new genre of writing about start-ups. Graham managed to make these difficulties sound like fun, and he used them to enhance his personal branding. He is now known around the world as the guy who coined the cockroach approach to entrepreneurship.
That’s how entrepreneurship works. You take adversity and turn it into opportunity. Plus, you have a laugh about it!
My advice: See it all as a game, because it simply is. Play the game and laugh about it, rather than remain among the bores.
In conclusion
Life is infinitely complex, and it’s always tricky to generalise about anything.
The bottom line is, though, that you are much more likely to face a loss of recognition and similarly negative reactions once you have started your journey as an entrepreneur. Most businesses are simply not glamourous in their own right.
By preparing your mindset for it and using a few hacks, you’ll make your life easier and increase the odds of succeeding.
Best of all, none of the techniques I have set out above will cost you a penny to implement!
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