Entrepreneurs are quickly becoming the superstars of our time. Jeff Bezos, Elon Musk and Bill Gates are household names and enjoy the same attention as Hollywood stars, while Steve Jobs has become even more of a cultural icon in the years since his death.
These entrepreneurial titans are recognized for both the wealth they have created and the breakthrough innovations enabled by their visionary approach to technology. Additionally, their stories have helped forge the current narrative around entrepreneurship and the rich possibilities of going it alone, inspiring millions of young people to take the entrepreneurial path rather than the traditional corporate career. Now, with the emergence of the YOLO economyEntrepreneurship is increasingly seen as the best way to make money, make a difference and live life to the fullest.
Unfortunately, however, this view of the entrepreneurial journey is idealized and overly simplistic. It’s difficult to build great companies and develop breakthrough products. For all the well-publicized success stories, there are many more failures when the romance of entrepreneurship gives way to reality. So what do budding entrepreneurs really need to know before taking the plunge?
Becoming an entrepreneur is not for everyone
Success in business can eventually bring fame and fortune, but by then, most founders have had many years of hard work, long hours, and little recognition to build a successful business.
“When someone sells their company for billions of dollars or IPOs, the way the story is told sounds like a walk in the park,” he notes Anders Ibsen, co-founder of the no-code website building platform Cobiro. “In reality, the spirit of an entrepreneur is defined as doing what you do and doing it for a decade or more. The moment you realize you are a potential product/market fit is also the moment you realize you are facing one of the toughest challenges of your life.”
Anyone can become an entrepreneur – it’s not a myth. Founders come from all walks of life, with many different backgrounds and demographics. However, successful founders tend to have specific characteristics. Our research shows that characteristics such as “resilience and drive” rank just as highly as “persuasion/sales ability”, “self-reflection” next to “ambition and motivation” decide whether aspiring entrepreneurs ultimately take off.
Of course, self-reflection often comes with experience. Many who choose the entrepreneurship path are young, first-time founders who have yet to break through in the business world or build support networks capable of providing outside guidance and perspective. “Most successful founders are in their 40s rather than their early 20s,” adds Ibsen. “Although you may not have the same energy level, you will be better at navigating in the long term simply because of the experience you have from life. Successful entrepreneurship is about perseverance and the knowledge that technology grows exponentially. 10 years feels like an eternity when you’re in your 20s.”
Being an entrepreneur takes a lot of determination, a constant willingness to learn, and the realization that there are sacrifices along the way. Even then, success is far from guaranteed. Luck almost always plays a part in how the journey unfolds.
Fights in all directions are inevitable
Entrepreneurs are constantly confronted with new situations and circumstances, many of which they have never experienced before. From product and market challenges to leadership and hiring issues, supplier issues and funding difficulties, being a founder means constantly “fighting the fire” just to stay in the game.
“As a founder, you are responsible for everything that happens in your company – potentially including hundreds of employees,” explains Ibsen. “Investors will call you every quarter for an update and you have to show up. If you don’t like the thought of it, you should probably reconsider your dream, because most of the time that’s the reality of the role.”
Many entrepreneurs choose to team up with friends or co-workers to share the burden. But while the right partnership at the top can certainly improve a company’s chances of success, in fact two-thirds of startups fail at it Conflicts between co-founders.
On the other hand, individual founders are more likely to suffer from loneliness, self-doubt, and a host of other health issues. The pressure can be unrelenting, and there’s also the widespread problem Burn outwhen entrepreneurs sacrifice their work-life balance to solve urgent customer problems, prepare product updates for launch, or get funding rounds through the line.
“Starting a business is incredibly difficult and the odds are slim when it comes to making it successful,” he notes Virraj Jatania, CEO of alternative digital banking provider Pockit. “Not only that, but as the sole founder, nobody has the same connection to the company as you do. When something goes wrong, no one else feels it that way. I’m relying on strong family support, a great board and management team to share the load with me, so it’s not a purely solo experience.”
Many entrepreneurs fail for other reasons, such as lack of capital. A founder’s financial prowess is tested right from the start and he must ensure that his initial investments pay off as early mistakes in his growth strategy can quickly bring the company to a halt. Corresponding Patrick Borre, co-founder of the ticketing platform Billetto. “When you are funded by venture capital, your professional role must be primarily growth-oriented. However, many entrepreneurs try to take the fastest path to growth and this can lead to premature scaling before finding the product/market fit. Growing your business without overdoing it is a constant challenge.”
rise to the challenge
Regardless of the nature of the current problem, entrepreneurs must remain calm and solution-oriented. The ability to prioritize effectively when issues arise left, right, and center is an invaluable leadership skill — not only for keeping a startup on track, but also for reassuring employees and investors. Nobody wants to feel like a few bad business weeks could jeopardize their job, so founders need to support their teams to navigate tough situations, stay pragmatic and positive, and most importantly, avoid drama.
“It’s a good idea to have other things in your life that can distract you from everyday stress,” adds Jatania. “It could be exercise, meditation, yoga, participating in a charity, or some other hobby. If it distracts you for a few hours a week, it’s worth it and will help you be a better leader.”
Above all, founders need to know when to seek help. The entrepreneur may be the hero of the story, but every heroic narrative contains a number of supporting characters — in this case, co-workers, peers, trusted advisers, investors, and others — who can help them prepare for and overcome the inevitable hurdles and bottlenecks they face personally Challenges they will encounter on their journey.
For example, investors need to recognize that the most important aspect of an investment is the founders. It is in their interest to closely monitor the coping process of founders and to recognize warning signals at an early stage. Ultimately, the role of the investor is to enable entrepreneurs to grow and build successful businesses. Today, this also includes training and coaching that helps founders to cope with the mental aspects of their job.
Getting by when the music stops
Although not widely known, there are many examples of entrepreneurs who have suffered from severe stress and mental health issues throughout their careers. In some cases, e.g Anthony Bourdain and Kate Spadethe journey ended in tragedy.
Entrepreneurs, like sports stars, seek to push the boundaries of human potential. The stakes are incredibly high, and these are ordinary people – not superheroes – who are just as vulnerable to the same challenges as the rest of us. Romanticizing entrepreneurship and putting entrepreneurs on a pedestal only increases the pressure to succeed when, in reality, all founders will eventually fail.
“In my opinion, there is nothing worse than not trying,” argues Jatania. “But in the UK and Europe, we really don’t recognize and accept and don’t accept the idea that entrepreneurs fail in the same way that people in the US do.”
This is an area where the European startup ecosystem needs to evolve. We need to communicate that the outcome of entrepreneurship is not always rosy and that it is important that founders have a broader support network should the music stop.
However, it’s equally important to remember that failure can lead to valuable insights that can be used in another environment – allowing entrepreneurs to gain experience, learn and develop an even thicker skin.
Realism over romance
The pandemic has stress-tested most industries, revealing weaknesses across value chains that can be addressed with technology-driven solutions. There is an urgent need for entrepreneurs with a clear vision to implement this change.
But while anyone can be an entrepreneur, not everyone is cut out for it. In addition, all entrepreneurs need support and guidance on their way to avoid getting into a situation where they cannot continue. Even with this guidance, entrepreneurship will not always enjoy a fairytale ending. It is a difficult path, full of pitfalls and uncertainties.
And yet there has never been a better time to start a business. Startup costs continue to fall due to the availability of the cloud, easy access to development tools, and more open-source knowledge. The venture ecosystem has also matured. Investors are now more attuned to the problems typical of entrepreneurs and better equipped to help them through these challenges.
Only by painting a more honest picture of entrepreneurship can we ensure that founders truly understand the task at hand and are committed to their cause for the right reasons. As Borre concludes, “Many entrepreneurs start with a clear mission and then get caught up in the valuation game and chasing a big payoff. If you’re thinking about starting a business, it’s because you want to create something. Whatever happens on the journey, never forget why you are doing it.”