Whenever I meet someone who wants to start a business, the firstquestion on my mind is: Why? Why are you doing this? Why now? Whatare your reasons, and what outcomes are you hoping to achieve? The answersto these questions will drive both the direction of the venture andhow effective the founder will be in getting it off the ground.
All reasons are not created equal. Each comes with benefits andtradeoffs. What follows are nine common reasons for plunging downthe startup path, along with a few important considerations for each.
If the freedom to call your own shotsappeals to you—if you want to set your own priorities, work at yourown pace, and be your own boss—you are in league with most aspir-ing business owners. The more autonomy-driven you are, the moreyou might prefer to operate as a sole proprietor or freelancer, ratherthan as part of a founding team.
“Being your own boss” is more myth than reality for most entre-preneurs. Every successful business owner must consistently answerto others: customers, creditors, suppliers, and investors. Understandhow your independent streak might constrain your bottom line andlimit your growth prospects. Research confirms that businesses startedby two or more co-founders succeed at higher rates than those run bysole proprietors.3And if you are interested in growing the value ofyour business over time, you will, most likely, need to complementyour strengths with those of others and relinquish some control ofyour business to funders or other business partners.
If you are motivated by challenge, driven to be thebest in a particular field, want to prove to yourself that “you can do it,” see a better way of doing something, want to do work of highestquality, want to stretch, learn, and get better—all these are positivesigns for the future of your new business. The drive to achieve is oneof the most potent and lasting motivators because it comes fromwithin, can be focused on the concrete steps vital to advancing astartup, and isn’t easily weakened by challenge or adversity.
The early days of a startup can be frustrating for achievement-driven founders because many important tasks and activities don’tlead directly to measurable outcomes. Given that paying customersmay not be a reality for some time, the more clearly you can definewhat constitutes meaningful progress, the more your drive to showprogress can be directed in fruitful and satisfying directions. In Chap-ter Five, I’ll share ideas for clarifying goals and priorities early in yourstartup process.
FINANCIAL GAIN / WEALTH
You may view starting a business as thebest way to earn a good living or as the road to wealth creation. Thislatter ambition is often a special case of the drive to achieve, wheremoney functions as a way of keeping score and a means to other ends.Even after financially driven entrepreneurs have earned more moneythan they and their families will ever need, they continue to be luredby the great game of commerce and the thrill of the deal. In the eyesof venture investors, this drive toward financial success is usually apositive sign.
As Chris Holden of Court Square Ventures notes,“Those who are most motivated by a return on their personal sweatequity and the risks that they took, the money that they raised, andtheir own money that they put in it, those are the ones who are mostwilling to adapt to changing conditions, and be transparent, and tonot care about being liked or how they look. . . .
They don’t let any-thing get in the way of their real goal, which is to succeed.” Chris’sexperience is supported by a Kauffman Foundation study publishedin June 2009, examining the personalities and motivations of 549 suc-cessful startup founders across a range of industries. Seventy-fivepercent of these founders “expressed a desire to build wealth as animportant motivation in becoming an entrepreneur.
Bringing realistic financial expectations to your startup journey will be vital to your success. The road to startup wealth usually re-quires financial sacrifice in the early going, sometimes extended overmany years. Well-prepared founders are willing and able to operateat reduced income levels as long as necessary. If financial motivationis the only thing driving you, you may not be willing or able to handlethe economic realities of early-stage startup life.
HIGHER CALLING / MISSION
Some entrepreneurs are passionatelydriven by a special cause or a higher calling. Their animating firecannot be quenched. Lynn Ivey personifies this reason for starting abusiness. I’ve met very few people who bring her combination of un-shakable belief, optimism, and energy to their startup effort. As wewill see in later chapters, Lynn’s personal sense of mission propelledThe Ivey through some very tough sledding. This is true across thestartup landscape in the form of many mission-driven founders, whoseem to draw energy and inspiration from a source greater thanthemselves.
Unfortunately, mission-driven founders may be more likely thanothers to become trapped by their passion. Their confident certaintyand sense of destiny can blind them to the more sobering aspects ofbuilding a business, and they may be slow to understand that theirmission and message won’t resonate with everyone. If you feel drivenby a higher calling, be sure to surround yourself with reality checksto counterbalance the stubbornness that can come with inspiration.
Of all the reasons to start a business, I be-lieve most strongly in this one as a predictor of ultimate success.When founders are driven to address a known gap in the marketplace,their energy is directed precisely where it should be—on solving anemerging or existing customer need. They are much more likely tobuild their new business on a foundation of solid market demand. J.C.Faulkner has always been an entrepreneur in waiting—it’s stampedin his DNA—and so it was only a matter of time before he made hisstartup leap. But his specific idea for D1 sprang from his timelyrecognition of an emerging gap in the marketplace. He was passionateabout catching the coming wave of home finance activity and de-signed his venture to do so.
If you are obsessively driven to solve a customer problem, be sureto do your homework by testing your assumptions about the size andreadiness of your chosen market. It’s not enough to successfully solvea problem. You must solve a problem that customers will pay to havesolved in sufficient numbers and at a price that will generate a healthyreturn for your business over time.
AN ESCAPE FROM SOMETHING
Many, many people want to pursueself-employment because they are desperate to break free from adead-end job or a bad boss. They may feel bored or stagnant or fearthat working for others no longer provides the security it once did.Or, they may have been laid off and cannot find any reasonable op-tions in the current job market.
Although it’s understandable that such situations provoke manyof us to finally take the startup plunge, these kinds of “away-from”reasons, unless they are accompanied by an even stronger “toward”motivation, do not typically drive entrepreneurial excellence. The fur-ther a new founder moves from a distasteful situation, the less moti-vational power these reasons pack. Starting a business is hard; peopledon’t succeed simply because they were unhappy or unsuccessful atsomething else. If you are driven by dissatisfaction with your careeror life situation, try to identify and cultivate more forward-lookingmotivations, reasons that would cause you to abandon a great situationbecause they are so emotionally or intellectually compelling.
Some founders are primarily motivated to run a businessthat meshes with their desired lifestyle outside of work, but achievingyour dream lifestyle while building a healthy business may be moredifficult than the hyped-up entrepreneurial media would have youbelieve. It’s true that technological innovations have led to an explo-sion of home-based, Web-based free agents across the world (blog-gers, Web designers, Twitter consultants, SEO marketing specialists,etc.) and you can now outsource almost any task that you find daunt-ing or uninteresting. But most of these free agents don’t earn enoughto cover basic living expenses,5 and those who do make a good livingat it will readily admit that they work around the clock to lift theirproduct or service above the abundant noise and clutter of the Web.
In the case of Tim Ferris, author of the best-selling book The 4-HourWorkweek and father of a worldwide movement of “lifestyle design,”6it’s clear that he has put in herculean hours and effort in promotinghis book, building his brand, and marketing his image across theworld. In mastering any profession or a craft, the appearance of a rad-ical shortcut is usually illusory. If it seems too good to be true, it usu-ally is. Achieving your ideal lifestyle will likely require tough choicesand sacrifices.
SOCIAL / COMMUNITY
Some founders are driven to entrepreneurshipbecause they want to work with friends, be part of a great team, meetnew and interesting people, or create a vibrant community of co-workers, customers, or colleagues. J.C. Faulkner launched D1, in part,because he wanted to create a better place to work. “My motivationwas more personal than professional,” he said. “I wanted to build aplace where I could attract talented people and treat them better thanthey’d ever been treated and where I felt better about working. Iwould have taken a cut in pay to do this. In fact, I thought I was takinga cut in pay.”
The instinct to start a business with friends or family is as old ascommerce itself, and it’s common for founders to end up on startupteams because friends recruited them into the role. I worked for manyyears with a successful and superbly led global consulting firm thatgrew out of the collegial friendships among its three founders. For themost part, they saw working with each other and having fun togetheras the primary reason for joining together in a business. In this case,the founders’ social motivations served the venture well, contributingto trust-based relationships and alliances inside and outside of thebusiness.
The inherent risk associated with starting a business with friendshas been well chronicled. Just because you like a person or went toschool with that person doesn’t mean he or she is a good fit for thebusiness you are launching. I’ve enjoyed healthy business partnershipswith close friends, but, in every case, the business relationship madesense and worked well independently of social factors.
INNOVATION / CREATIVITY / ARTISTRY
Many aspiring entrepreneursare driven to pursue a technical innovation or a unique product idea,to turn a specialized hobby or craft into a job, or to build somethingthat has value apart from themselves. I group these motivations to-gether, because the common animating force is the age-old thrill ofmaking something from nothing. Founders driven in this way seetheir new ventures as crucibles in which this creation can occur. It’sa powerful motivator, and a close cousin of the need to achieve.
MarkWilliams, founder of Modality, is a great example of a founder whois obsessively, passionately, unreasonably driven to create the perfectproduct. Such founders are typically creatures of the lab, the studio,or the computing platform. Any opportunity that allows them to pur-sue their creative passion is one they will gladly embrace.
The challenge for founders driven by innovation and creativity isfinding markets that are both sizable and ready for their craft. Re-searchers, “creatives,” software hackers, and product developers areoften leery of marketing and sales activity and lack general businessacumen. If your first love is innovation, learn to respect market andfinancial forces and the talented people who understand them. Theywill help you tether your passion to sustainable streams of good for-tune.
There are, of course, other reasons to start a business. Some peoplefeel that they were born to be entrepreneurs and will jump at the firstopportunity. Others want to go deep into a professional specialty orfollow in a family tradition of entrepreneurship. Whatever your rea-sons, work to understand what is driving you and how this might im-pact your startup approach.
Alongside the question of why you want to start a business is thequestion of what you hope to accomplish. Even if sketched out in verygeneral terms, articulating your goals puts a stake in the ground andhelps you to further think through your overall level of readiness. Iuse the following questions with clients as a starting point:
Briefly describe your business concept in 50 words or less: What willyou offer? For whom? Why is your concept unique or compelling?
What do you hope to achieve—personally and professionally—over theshort-term (next 1–2 years)? What about the longer-term (5+ years)?
There are no perfect answers. Start by brainstorming a list. Writedown whatever comes to mind and then narrow the list to those itemsthat are challenging and compelling enough to drive energy and ef-fort, directional enough to guide week-to-week choices and behav-iors, and clear and simple enough to keep front of mind.
Here are some examples of early founding goals I’ve heard:
- Spend no more than $30,000 over the first year of operationand generate positive monthly cash flow after nine months.
- Become known as the go-to expert in specialized healthcaretraining for the greater Nashville region within two years oflaunch.
- Launch an initial website within three months and have ac-curate per-customer metrics in place within four months.
- Build a company that is valued at $10 million or more withinseven years.
- Develop my team to the level that allows me to take two con-secutive months off each summer to spend with family,within three years.
- As you can see, goals can vary considerably in terms of time hori-zon and focus (personal or professional). Only you can determinewhat success looks like as you move forward. The more concrete yourstarting goals the better, although they shouldn’t be etched in stone.They will need to evolve as you learn more about your market op-portunity (Chapter Four) and clarify your business model and “mathstory” (Chapter Five).