You Know You’re An Entrepreneur When…
I had just made my future wife cry—and what was worse, I wasn’t exactly sure what I had done to upset her.
We were in premarriage counseling and had gotten to the point where we were discussing our financial future together. My bride to be was shocked to learn I had run up over $13,000 in credit card debt in 1990 trying to get my current company—my third, OK?—off the ground.
I didn’t think it was that big of a deal. The pastor shared an empathetic look with my fiancée, then turned to me and said, “Entrepreneurs think very differently about money, don’t they?”
They do. In fact, entrepreneurs tend to upset a lot of people—spouses, partners, lawyers, professors, bankers and politicians (pushing entitlement)—with how they think about most things.
Over the past 20 years, I’ve had the enormous pleasure of spending time with hundreds of entrepreneurs, some of whom have been incredibly successful and some who could seem to get out of their own way.
If you are an entrepreneur or an intrapreneur—somebody who uses their skills and social capital to create products, services and business models from inside an established company—the following characteristics should seem pretty familiar. I’ve added a tip or two after each one in the hopes of making your journey less painful, less expensive and more productive.
Who knows? Maybe I’ll even keep a spouse or two from crying.
You know you are an entrepreneur if you HATE risk
This always surprises nonentrepreneurs. The common belief is that people start companies because they get a rush from taking risks. But show me a serial entrepreneur—someone who has started two or more successful firms—and I will show you a serial risk-avoider. Having a job is akin to having all of your eggs in one basket. Many would-be entrepreneurs see a bad manager or temperamental boss as good enough reason to take responsibility for their own future.
Back in the days when I worked for other people, I remember imagining my boss having a big red EJECT button with my name on it. He’d go out for cocktails at lunch and come back angry. I would sit waiting at my desk, thinking about that button and wondering if today was the day he was going to push it.
For many, this type of situation is enough to hang their own shingle or start something new from within, where their compensation and job security is tied directly to their own performance. This is why so many sales people are entrepreneurial. They are drawn to jobs where there is a straight line between risk and reward—a line that they get to draw.
TIP: Move from asking, “WHAT could I do better than my boss?” to “WHO needs something that my boss doesn’t provide?” Entrepreneurs often fall into the trap of just trying to optimize a product or service, but what happens if the market for that service is diminishing? If you look for something that lots of people need but can’t get, your success will be rewarded exponentially more.
Untold hundreds of thousands of entrepreneurs fail because they never get around to focusing on the one or two ideas that matter most. Instead, they have a new idea, and then another one and another. They feel strong being divergent and inspiring the people around them with their amazing vision for the future but then never, ever get around to executing a finely tuned strategy to get it done.
TIP: Walt Disney had his brother Roy, and Steve Wozniak had Steve Jobs. Go find a (Ring)leader who feels just as strongly about focus and measurement as you do about big ideas. When you can balance your Idea Monkey mojo with that of a great (Ring)leader, you will change the world together.
You know you are an entrepreneur if being broke is OK
For most people, going without a paycheck is the worst outcome. But even though most of the successful entrepreneurs I know like money—they aren’t driven by it. Personal profits become one of the many gauges on their dashboard.
Being broke seems to be a natural part of the entrepreneurial journey. I recently found some personal tax returns that were gathering dust. The returns spanned the years in which I was starting and growing our company. I was surprised to see that during that time, I made in the low $20K. I don’t remember money being an issue. I do remember that we were paying partners far more to help us get the engine humming, and I was thrilled at where we were heading. There have been a few times during the past 20 years where I—and other leaders in our company—have gone without paychecks to keep us moving in the right direction. While it didn’t necessarily feel good, it felt right.
Here are some tips on money that may make the road smoother for you:
TIP: Entrepreneurs love to sell and generate top line revenue. As you grow, remember that cost savings are just as important. For example, if you run a 20 percent profit margin, it would take $1 million in additional revenue to produce the same result of cutting $200K in costs (yes, the math isn’t perfect, but you get the point).
TIP: Debt is OK done the right way. An entrepreneur needs to understand the difference between healthy debt and unhealthy debt. Healthy debt should be embraced as it allows a company to fund and fuel its growth. Unhealthy debt is used to fund the delay or avoidance of making tough, but necessary, business decisions.
TIP: Don’t play by the rules. Just because your competitors get paid by the hour and ask for 30-day terms, you don’t have to. You can bill by the project or even ask for a piece of the action. And yes, you can even ask for your money up front.
Maybe if I had been capable of explaining all of this to my fiancée while we were dating, the counseling session would have gone better. Fortunately, my marriage and journey as an entrepreneur have both been a successful adventure. My hope is that your story has a happy ending, as well.