A few weeks ago, I gave a talk at the Indian Institute of Management, Trichy, on entrepreneurship. [You can find my presentation here, and my reflections from the talk here]. I also had a chance to speak one-on-one with many students from the B-school, as well as from NIT Trichy, the engineering school they share a campus with.
One question I got from many students was this – “I have a great business idea. Should I start up now, or wait and gain some (valuable) work experience first?”
Let’s assume, for the moment, that their business ideas were indeed great. Then, what’s the right answer to the question? It’s clearly an important one. Not least for students without much worldly experience, making a “risky” choice. Let me try and answer it.
But hidden inside this nuanced question is a far more basic one – why should you start up at all?
Why start up at all?
Granted, there’s a ton of hype about startups. If you only hear of Flipkart raising billions or SnapDeal buying Freecharge, your glasses will be rose-tinted. But 92% of startups fail, and most of the survivors meander without decisive success. So, don’t start a company in expectation of a massive exit alone. Or even a small exit.
The journey of building a business is long and arduous. Even uber-successful Elon Musk compares it to ‘eating glass’! It doesn’t make sense, if all you have at the end of it is a minuscule probability of making some money. Especially if well-paying jobs are available.
So, why start up at all, if the expected monetary return isn’t high? Here’s my opinion, based on the last two years I’ve spent trying to build a sustainable business.
- Starting a company from scratch teaches patience and long-term thinking. Few other experiences can match it. You often have to persevere in the face of repeated and several “No”s, making the joy of finally hearing a “Yes”, of beating the odds and succeeding, so much sweeter.
- There’s an unmatched joy to building something yourself. Even more than the first time you wrote a “Hello World” program.
- It’s a great learning experience. Nothing teaches you as much about starting up… as starting up (a point I’ll come back to later).
- And there’s a tiny, tiny chance that you’ll luck out and won’t have to work for money again. But again, the probability is so low that on average, it won’t be higher than a full-time job (which has much less stress).
So, despite the lack of income, there’s definitely value in trying to start a company. But should you start one now? Or, as the prevailing wisdom in college campuses / steady jobs seems to be, should you wait and take the plunge later?
Should you wait?
Some of the main reasons you hear for waiting your turn at the startup lottery are:
- “Let me gain some experience first – I don’t want to make any rookie mistakes”
- “Let me collect a decent pool of money first”
- “I need a brilliant idea. I come up with 3 ideas a day, but a little research shows that someone’s already doing it / it doesn’t work.”
All good reasons. But incorrect. Here’s why:
1. Experience: Hate to break it to you, but no experience can teach you how to build a business. Apart from trying to build one, that is. Recursive logic, but true just the same. Even if you work at a startup, it’s not the same as founding one.
Trust me, I know. I started a company after several years of experience helping companies enter new markets, launch new products, or develop business models. I knew how to build a new business from scratch. Except that I didn’t.
2. Resources: You don’t need a ton of money to start up. As I mention in this Slideshare (slide 30), it’s inexpensive to start a company today. Once you see consumer traction for your first product, you can begin investing more (or raise funding).
Moreover, today, tools like Kickstarter make it even easier to test your product concept for free, before investing your time and (other people’s) money in building it
3. Idea: This is the hardest roadblock – without a decent plan of action, your business will be stillborn. But it’s also an easy one – good ideas are a dime a dozen. Just look for problems you or your friends have, and try to solve them. Sooner or later, you’ll stumble upon a goldmine. Like Twitter did. Or Hotmail.
Thus, you don’t gain any specific advantage by “starting up later”. You’re much better off diving in now, when you’re young and less risk-averse. So, what are you waiting for?
I’d end the article now, but this answer leaves me a little unsatisfied. You see, a wise man once said – there are good reasons, and there’s a REAL reason. Experience, resources, lack of an idea – all these are great (but wrong) reasons. So what’s the REAL reason? What if you really need the money? What if the above reasons are just excuses?
Specifically – what if you want to start up eventually, but would be really comfortable if you took a job and earned some money first?
Well, you’re in luck, pal. Because this is a false question. You don’t need to choose between a job and starting up – you can do both!
Validate the idea (or the MVP if you will) in your free time, while working at your day job. Flesh it out gradually, observing user behavior and feedback on each iteration. If it catches fire, you’ll quit on your own!