Should
You Start a Business Now?
It's tempting, particularly for cashiered corporate warriors. But temptation isn't enough. You need a compelling reason--and a compelling product. Here are six things to consider before you take the plunge.
As we emerge from the pandemic, I expect that a lot of newly
unemployed, especially 40+ professionals, will be wondering what to do next.
There's gonna be no going back for millions of these people (unemployment was
6.2% in February vs. 3.5% the prior year) and sadly the prospects of shifting
to another employer in the same or adjacent industry sectors are looking pretty
grim. The pandemic has provided ample cover and convenient excuses galore for
cost cutting, workforce reductions, and compensation caps that will be with us
long after the last vestiges of the virus.
A lot of the job shrinkage we're seeing is structural and
permanent and - in certain industries - long overdue. But, even in those spaces
where rebuilding has begun, most of the available slots are going to be filled
by younger, cheaper and more technical talent. No one is going to tell older
applicants to their faces, but employers today are too often looking for
youthful energy (and even inexperience) rather than lengthy employment
histories, "experience," and all the baggage that comes with it.
They'd rather save some money, start from scratch, and "grow their
own." Older employees lecture: younger folks, ideally, listen and learn.
As a result, after getting kicked in the teeth a few too many times,
the prospect of starting their own businesses will look pretty attractive to
many of these WFH warriors. And it sure beats being turned down for jobs for
another six months. No one (except their family members and maybe their
financial advisors) can really tell them not to do it. And they're pretty sick
of hearing "No" all the time.
Being an entrepreneur is great -- I can attest to that. But
don't kid yourself; take a long look before you leap. Startups are hard and
starting over is even harder - especially when you've accumulated a bunch of
family obligations and other financial commitments. At a minimum, you've got to
do a serious personal inventory and really ask yourself honestly whether you've
got the stuff and the stomach for what this is gonna take. And it goes without
saying that, if your idea is just another "me-too" business with
nothing distinctive to set it apart, please don't start.
Remember that, for every breathless story bragging about some
overnight startup success, there are dozens of other wannapreneurs who are back
on the bread line. They may have started, but they never upped. In any event,
before you insist on heading down this very precarious path, here are a few
important things to keep in mind. Believe me when I tell you that whatever you
ultimately decide, you'll thank me later.
(1) Assume that your accumulated technical
skills, training, and expertise (as opposed to your people skills) will be
largely undervalued and useless.
As time passes and we rise in our organizations, our skill sets
change. We possess and develop far more "soft" skills around
things like management and organization and communication. We move
further away from the day-to-day use and application of the "hard"
skills we initially had. There may be exceptions with regard to specific areas
of technical expertise, but even the best software engineers soon find
themselves spending more time managing people than writing code.
In the world of tech in particular, there's a fair amount of
age/experience bias, which is to say that your prior skills may be thought to
be outdated or worse and the highly structured and peer-reviewed way you were
taught may sound old fashioned in the frenzied, spaghetti-code startup world.
It's not just an issue in the software industry. In my restaurant businesses, a
persistent adage was that old bartenders tended to bring their bad habits with
them. They'd rob you blind until you caught them and then they'd find another
job somewhere else.
Sadly, when you're on the street and outside of the context of
your previous organizational responsibilities, many of these softer skills are
hard to quantify and demonstrate. Worse yet, in a very small new business, it's
not at all clear that there's much value or opportunity to apply them. The best
office manager in the world, who actually did a million different and important
things for his or her business (and was in reality much more of a COO) still
reads like an "office manager" on paper. One important idea here: try
to bypass the resume process entirely by focusing on old connections,
relationships and people who actually know you and what you can do.
(2) Forget the concept of the "highest
and best use" of your time.
We're all proud of our own talents and abilities and we're
taught over the years to optimally apply them and to maximize our impact. One
eye is always on "the highest and best use" of our own time and
energies to move the ball forward and toward the company's ultimate goals.
Well, you can pretty much forget that idea for a while. You'll need to roll up
your sleeves and get used to doing anything and everything that needs to get
done regardless of whether you're the best person to do it.
The best entrepreneurs say "nothing is beyond me and
nothing is beneath me" and now's your chance to live the dream. I don't
mean to make light of this process because, in taking out the trash or doing
whatever it takes, you're definitely modeling the behavior that you want your
people to emulate. But that doesn't make the garbage stink any less. Many of
the old adages and reliable rules just don't matter in the new world. You have
to teach yourself to remember to forget some of the "tried and true."
Just focus on muddling through for starters.
(3) Plan on working (at least for a while)
with employees you would never have hired in your last position.
Beggars can't be choosers and, as soon as you enter the real
world and no longer have an HR department or a self-selecting stream of Type A
players, you'll quickly discover that you have to take whatever you can get in
the way of initial employees and just hope for the best. Managers coming from
traditional firms have no idea of just how commonly focused, closely-aligned
and homogeneous their prior fellow employees were concerning values, goals, and
career metrics, regardless of their apparent "diversity." Your
new business - especially while you're trying to create and cultivate a company
culture - will be full of folks with different lifestyles, variable work
ethics, and loads of attitudes. Your job is to make room for all of them.
One critical tip here: the way to avoid constant heartaches and regular
disappointment is to lower your expectations going in and hope to be surprised
on the upside.
(4) Patience is more than just a virtue,
it's a painkiller as well.
By the way, you're going to need to practice being way more
patient and forgiving than you've been for years and not just with your own
kids. It can seem like no one but you is in a hurry and that the whole world -
investors, vendors, partners, lenders, and, of course, your employees - is
moving in slow motion. They don't get it, but then again, they don't have to
because they don't really understand or care about your constraints. Don't get
angry - they're not out to get you, they're just looking out for themselves,
just like you always did.
And, just to be clear, you're not such a great bargain yourself.
You need to get used to being the dumbest guy or gal in the room for a few
months and just hope that all these other folks will give you a break. If
you're foolish enough to try to open a restaurant, you better know something
about standing in front of a hot stove or else you'll discover that it's the
cooks who really control the business. If you're an absentee landlord, like it
or not, your newest "partner" is gonna be the plumber when the pipes
freeze or the potty overflows.
By and large, the people you'll employ know what they're doing
and how to do their jobs (when they get around to it), but you're also supposed
to know their jobs, the way forward, how to tell the future, and how to find
the pot of gold at the end of the rainbow. As you might imagine, it's likely to
take a little time for you to get there. Be patient.
(5) Your job is NOT to educate or lecture
your customers. It's to satisfy them.
Customers are in a whole different category. I realize that the
startup gospel establishes the customer as king and always correct, but as
often as not, in the day-to-day trenches, that's a crock. It's a great idea and
a wonderful ideal, but hard to live up to every day.
Customers come in all sizes and kinds - some are frazzled and
scared, some are cranky, some are slick, some are too careful and choosy for
words, and, especially these days, most of them are there for a simple reason -
to get in, get what they need, and get out. They aren't looking for an
experience, they don't care about your shtick even if you do, and they aren't
there to make your day.
Your job is to grin and bear it. Not to reform them. Not to
patronize them or unctuously "explain" things to them. They are there
- hopefully to buy - for their own reasons and they don't really need your
help. This isn't quite the warm and fuzzy dream environment that you had in
mind. Get used to it.
(6) Don't think money is going to solve your
problems or make your new business a success.
Just as a lawyer representing himself has a fool for a client,
it's very easy for a relatively affluent new entrepreneur to get in the habit
being the business's banker, lender and/or best investor as well as its CEO and
chief salesperson by injecting too much of his or her own cash too often in
order to make up for the business's shortfalls in sales or to help cover fixed
costs. Investment dollars, regardless of where they come from, are worth a tiny
fraction of the dollars generated by real sales of products or services in
large part because investment is not an effective measure of progress, traction
or the likelihood of ultimate success. But when the dollars are coming out of
the entrepreneur's own pocket, it's the worst and most costly kind of delusion.
And, as an aside, hell on your family as well. Don't despair, just think of
this as an opportunity to learn all those things that money can't buy.
Perseverance is fine, but this is a very slippery slope. You
need to agree (with all of the interested stakeholders) from the very start
that there's a dollar limit you're willing to commit. Establish some concrete
milestones, and a realistic overall timeframe for your little venture and, if
the dogs don't start eating the dog food, and profitability is always just
around the next bend, that you'll be smart enough to call it a day and think
about getting a day job no matter how hard that is to come by.
So go ahead and take your shot, but understand that it's going
to be far more of a grind that you ever imagined and thankless as well for a
very long time. And harder still when you're no longer exactly limber and wet
behind the ears. If you thought work was tough, working for yourself is a
hundred times tougher and, since you're working for plenty of other people as
well, you'll have "bosses" galore - all with plenty of opinions and
expert advice.
There will be long days and even longer sleepless nights. And
you'll find that you're too old to cry and that it hurts too much to laugh.
Just sayin'.
MAR 16, 2021