When you ask a lot of people to define Entrepreneurship, “Be your own boss” “Make decisions yourself” “Exciting” “Profit” “Investors” are keywords and phrases you most likely won’t find missing in their definitions. Actually, entrepreneurship is exciting. You can make a profit from it, in monetary terms and otherwise. If your business is good and pitching great, investors will come on board. As an entrepreneur, you get to be your own boss and make decisions yourself. Yeah, all of that makes sense. They actually are obtainable. Unfortunately, it is not always straightforward, as entrepreneurship is not straightforward. There are probably some things about entrepreneurship that you do not know about.
1. Is Entrepreneurship exciting?
No doubt, entrepreneurship is exciting. Why won’t it be? If you are closing deals after deals, signing up thousands of users daily and touring the world on promotional events for the startup, it is.
But what if you are not? There are startups struggling to make sales and hit their growth point targets, what we define startup success as. At that point, excitement gives way for sadness. You are sad; you want your startup to actually work. Remember, 90% of startups fail in their first year. Why? Because they failed to gain traction and/or profit. For people in that condition, how exciting do you think entrepreneurship would be?
2. Does everyone in Entrepreneurship make a profit?
As a much younger student, what teachers taught whenever asked “Define Entrepreneur”, in Economics or related subjects or even general discussions, was; An Entrepreneur is a factor of production responsible for controlling and managing the other factors of production, takes risks and makes a profit. It sounded cool, still does. The truth is, making a profit is a very hard thing in Entrepreneurship. Don’t be fooled. Twitter ran for over a decade, without making profits. They announced their first ever profitable quarter early this year, February 2018. Twitter was founded on the 21st day of March 2006. That makes it twelve years of non-profitability. They survived that long because they had traction. They had hundreds of millions of users and investors were willing to wait it out. How many other startups can survive 12 years of nonprofitability? There are more entrepreneurs who don’t make a profit than those who do.
3. Does every startup find investors?
Considering the fact that startup founders are investors, in a sense of it, yes. Investing sweat, capital and assets into launching it and making it take off. Asides that, finding investors is difficult, very difficult. The rule of the thumb for investors is that only ten percent of their investments go big. This rule seemingly applies to smart and experienced investors; some investors lose everything, even the ten percent. Expanding on this rule, it implies that, of every hundred people that pitch to investors, only ten people get funded. It is also worthy to note that most times investors give less than you ask for, it’s always a tough bargain. Tact is needed to effectively define rules of engagement that are favorable to both parties. There are entrepreneurs who don’t succeed at getting a chance to pitch to investors at all. They end unfunded. These ones see the harsh reality of entrepreneurship.
4. Are Entrepreneurs their own bosses? Do they get to make decisions themselves?
If you define being your own boss as being the Chief Executive Officer of the company you work at, then Entrepreneurs are their own bosses. But the truth is, in Entrepreneurship, you always have to answer to someone or some people. For companies with a board of directors, you have to answer to them. Their decisions will easily override yours. Investors are your bosses too; they gave you their money, therefore, you are answerable to them. The customers hold the highest power overall. There will not be a business if there are no customers. The board is there because of the customers, the investors invested because of the customers, you generate revenue because of the customers. They are the actual decision-makers in the business or at least should be. They define the product, and you have to make that or risk not getting their money.
All in all, Entrepreneurship is an interesting journey. But just like everything in life, it is filled with obstacles. Is it worth it? A lot of entrepreneurs say so, successful and otherwise.