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The Startup Myth

7 December 2008 5,790 views 18 Comments

The world would be a much better place if less people tried to build startups. Don’t get me wrong, I’m not saying we could use less entrepreneurship. Innovative entrepreneurs will pull us out of this recession more sustainably and more meaningfully than any government bureaucrat with indirect policy levers could ever do. What I am saying is that we need more people wanting to build companies, not startups. That is not a too subtle distinction.

Would-be entrepreneurs proclaim proudly how they are starting new businesses and are willing to endure many years of blood, sweat, and tears. To be sure, the willingness to work hard and persevere ranks high on the list of essential entrepreneurial character traits, but I think we have over-romanticized the startup life. Low pay/no pay, long hours, and years of struggle have come to be badges of honor for those of us still in the minor leagues of startups. We’ve either frantically adjusted our business models (groping after every hot trend like Web 2.0, social networking, or microblogging) or we’ve stubbornly stuck to our original ideas regardless of market feedback. The most important thing we have in common is that we’ve been unable to graduate to the major leagues of thriving, growing, established companies too big and successful to be called startups.

However you define a startup, trust me, there is no glamor or glory in remaining a startup. But we’ve come to fall in love with the Myth of the Startup. We all know a few guys who seem to perpetually be working on a startup. They love the story of being a startup entrepreneur and the attendant lifestyle. Even more pronounced is the first-time entrepreneur who has bought into the Startup Myth. His romantic vision of startup life becomes a self-fulfilling prophecy and he is destined to struggle with a small “startup” because that’s what he wants.Ramen Noodles

Dump the warm fuzzies. Entrepreneurship is not about startups. Entrepreneurship is not about eating ramen noodles and scraping by. Entrepreneurship is not about being able to tell your friends and family you are a founder of a startup so you can finally impress them. Entrepreneurship is not about working 12 hour days ad infinitum and sleeping only 4 hours per day to show the world how tough and committed you are. Entrepreneurship is not about attending industry conferences so that you can hear yourself speak and tell your competitors how excited you are about your opportunities. Entrepreneurship is not about blogging about entrepreneurship. Most of all, entrepreneurship is not about some romantic ideal of living a tough startup life.

Get real. Entrepreneurship is about growth and value. Entrepreneurship is about creating something a sufficient number of people want or need. Entrepreneurship is about turning every dollar of resources spent into something worth more than a dollar. Entrepreneurship is about building a company and growing it beyond startup stage. The list of what entrepreneurship is not is much longer than the list of what entrepreneurship is. That’s because there are a lot of things people associate with entrepreneurship that really don’t have anything to do with entrepreneurship. It’s like describing a hamburger. Despite the many different ways to make a hamburger, there are almost infinite ways to describe what a hamburger is not.

Dream, dream big. Think, think different. Start a startup and eat ramen noodles (rice and soy sauce in my case) if you have to. Revel in your foldout tables and chairs. Dance a jig in your cozy garage. But realize that all these are just trappings of a startup. Figure out a way to scale so that your startup can grow to be a valuable company. Build a company, not a startup. If you love the startup lifestyle, leave your company after it outgrows you to start something new again. It’s a good thing to have your company outgrow you, your garage, and your romantic visions of what it means to be an entrepreneur.

Hewlett Packard Garage

Hewlett Packard Garage

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18 Comments »

  • Jacob said:

    Interesting point, Allan. The story of Hewlett Packard is an inspiring lesson every business student should learn. Your message reminds me of Jim Collins’ work when he described how good companies can develop into great companies like Hewlett Packard. Innovation is definitely a critical part of that formula; it’s the lifeblood of (sustainable) corporate growth and a remarkable defense against competition. Thanks for the thought!

  • Jason Alba said:

    Awesome post Allan… makes me think about entrepreneurs and business owners I know… thinking about whether they are startup folks or business folks…

    - jason

  • Seth Godin said:

    This is a great post, Allan.

  • stetoscope said:

    Hi Allan,
    I totally agree with your post. I went to LE Web in Paris and I met bunch of start-up lifestyle guys… I am currently starting up my business and all I want is turning it into real business and as soon as possible.

  • Anthony Power said:

    I’ve had the pleasure of talking to Allan and drawing a few things on real and imaginary white boards over the past year. This post brings home the point to me that there is an often forgotten difference between ‘entrepreneurship’ and ‘innovation’. As Allan states, the former is the act of creating a company that delivers value; the latter is the act of solving a problem. Now, a lot of times these go hand-in-hand but they are not the same.

    There are reasons why established companies don’t or can’t innovate; there are also reasons why a valuable solution isn’t necessarily a new company. An entrepreneur understands and leverages the intersection.

  • Gregory Y said:

    Allan,

    As you well aware, the starting of a company and managing growth are very different skills and appeal emotionally to very different people. I am on my 5th start-up now, and even though I jumped into this one with great trepidations after “managing for growth” for the last 12 years (which I mostly enjoyed), I must say that almost unrestricted creativity of a start up is very addictive.

    I do agree that the Myth is grossly overplayed and probably manufactured by abundance of “easy money” VC’s were throwing around a decade earlier. The money are not there to throw any more, but memories die hard.

  • Judith Ellis said:

    Thank you for this post. It is very thoughtful. Isn’t it interesting how we attach ourselves to the image of what a thing is as opposed to actually doing what is needed to be the thing itself? It’s like doing our first works repeatedly. It is also far easier to indulge in an image rather than become the image. The growth and value building that you spoke of is, of course, the core of any company. This goes beyond the mirage of starting up to growing up. Thanks again.

  • Ken Knight said:

    I’m probably a victim. I can rationalize -nothing’s actually deadpooled yet, and I’ve made two nonprofit projects self-sustainable.

    But for a lot of people, or at least myself, ideas are a lot more romantic than hard work. Not to say I haven’t put in my share of 120 hour workweeks, although even mentioning that might prove I’m guilty of your post. At the same time, most entrepreneurs, including the successful, started new ventures because of some vision of creation. By simply setting out to create value, they have above-average risk profiles. They’re not starting out with an IPO as the end goal. They’re not even managers, by nature. Additional workers are simply a means to creating or spreading the product, with structure completely out of mind.

    And maybe that’s necessary.

    That’s why most founders are asked to step aside, eventually. But there’s a reason those good managers or new CEOs brought in weren’t the ones who actually started the company.

    The mentality certainly needs to change over time, but there’s a reason the condition you’re describing is so prevalent. It’s just more exciting. Creation isn’t a space for rational people.

  • Meredith said:

    Brilliant post. Brings to mind the ideas of true people who do well in their job function. Leaders, entrepreneurs are not the same as great managers and CEO’s, nor should they try to be. I call it the forethought factor: Entrepreneurs should be thinking 10 years out – managers should be thinking and planning for today and maybe next month. It is two different mindsets. Thank you for your post.

  • Steve Driscoll said:

    Interesting post. The mindset of an entrepreneur is certainly different. Being busy and having tons to do is not necessarily being productive and getting things done. A true entrepreneur knows this, is prepared to do anything and everything as soon as is humanly possible. There is no such thing as an excuse, tomorrow, later or not my job. Every day a startup survives is a day closer to a startup becoming a thriving company.

    My advise is to never give up, never stop, adapt whenever necessary and reach out when help is needed.

  • Guilherme Cunha said:

    I greatly appreciate this post. It solidified what has been on my mind for quite a while. I am an entrepreneur not because of a trend yet rather because this is who I am.

    I’m not interested in boot strapping and staying at any level too long. In business, if you’re not growing you’re dying.
    Building value and reaching scale is the most important thing that wakes me up every morning… which disrupts the dreams I have about it and those dreams are just a result of thinking and planning about it minutes before retiring at night.

    Thanks Allan.

  • more than crazy | Guilherme Cunha said:

    [...] great post by the great Allan T Young: THE START-UP MYTH.   We all should be fighting for reaching scale and building [...]

  • Jean Celibataire said:

    I don’t understand what you mean.
    It is very clear to me that you cannot be big unless you were small at some point. Every enterprise used to be a start up, Google, PayPal, Apple included!
    Of course that the goal of every start up is to become a big company… Some succeed, some don’t.

  • Surender Sharma said:

    Alen,
    This is really awesome post about business.

  • mountain biking and entrepreneurship | Guilherme Cunha said:

    [...] having a clear understanding of what the road ahead is reminds me of the E-myth revisited, Allan T. Young and one of my earlier posts on being an entrepreneur.  The E-myth Revisited by Michael Gerber [...]

  • Mountain biking and Entrepreneurship | Guilherme Cunha said:

    [...] having a clear understanding of what the road ahead is reminds me of the E-myth revisited, Allan T. Young and one of my earlier posts on being an entrepreneur. The E-myth Revisited by Michael Gerber [...]

  • the comparison between mountain biking and entrepreneurship | Guilherme Cunha said:

    [...] having a clear understanding of what the road ahead is reminds me of the E-myth revisited, Allan T. Young and one of my earlier posts on being an entrepreneur. The E-myth Revisited by Michael Gerber [...]

  • Dave King said:

    An excellent post. Thank you. I think the sentiment can be said of a lot of things, but writers in particular come to mind. A lot of people like to *talk about* the book, play or screenplay they’re working on — and some of them actually are — but few are actually working at it in a way that they intend to see it published or produced. They just like to be able talk about it. You’ll find that’s almost never true of writers who make a living from writing. In fact, they usually HATE to talk about what they’re working on because for them it’s not about being able to talk about it, it’s about actually creating that finished product. In the same way you suggest entrepreneurs should focus on creating a business and not a start-up, a start-up is the writing process, but a business is the finished book.

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