Tuesday, July 26, 2016

So about this thing called a start-up...

We've all got that one friend, who's involved in a start up of some kind. With the proliferation of Facebook, Twitter and Linkedin at the turn of 2010, to the recent hype of Uber and beautiful branding of Airbnb, it is hard not to be tempted to jump into the bandwagon.

I've been to a couple of start up talks, and networking events across the last few years and I'm constantly struck by the kind of questions that some would-be entrepreneurs ask, or the attitude they display.

Don't get me wrong, this post is not to suggest or downplay start-ups as a frivolous pursuit. Neither am I possessing the opinion that it is a waste of time, and that most of them are scams.
However I am of the opinion that the word "start-up" has become a brand in and of itself, and I have observed that some people have bought into the hype and think that being part of a start-up, or somehow being self-employed is desirable.

It is not.

As a loved one told me, the word start-up gives the would-be entrepreneur an excuse to fail, that it is somehow okay to do so because everything is "experimental" or "untested". As a result, incompetence is tolerated because we are all part of the "learning journey".
I find this notion uncomfortable to stomach. Incredibly, would-be entrepreneurs find capital and see it as a be-all and end-all solution to their insolvency, or the high costs of running a company. It is also extremely self-centered, that someone should trust their capital in your hands for a turnover when you have no track record, not even an inkling of what it means to analyse a balance sheet. A good idea is not enough.

Our parents and indeed some people now, would never have self-identified themselves as a start up.

Not-too-long ago, it was called running a business.

It was about feeding their families, about working for a better life - recognising that working for someone else offered limited opportunities because of the current career climate. It could also be that the person earned much more doing freelance outside, that slowly gained traction into a registered business.

I think in our pursuit of the dream of owning your own million dollar company, we forget that it was ultimately either a rich family's son/daughter's interest that grew into something, or one's desperation to get out of poverty at all personal costs. However some individuals see this start-up culture as an event to hand out business cards that says "CEO" or "MANAGING DIRECTOR" behind a wrinkle free face. It is not an avenue to bolster one's ego. Ask any SME and they can tell you that they have endless nights worrying about cashflow, and from mistakes they gain valuable experience.

Because experience is one of two things: age and exposure. Some fortunate individuals have had the opportunity to be exposed while they were in safe environments (schools, family businesses, universities), they grow quicker and therefore are well-poised to seize a new idea and turn it into a new business.

However, observing the small sample size I have, I feel that many would-be entrepreneurs have no idea what they are doing. There is a lot of wastage - time, effort and money - to get the same result. A lot of would-be entrepreneurs also reject the "corporate monolith", often setting it as a dichotomy to their own identities. Either seeing them as bullies or as stuck-in-the-mud institutions. Yet, I share a different perspective.

I see corporations as learning institutions and some have more lessons than most. Unlike the climate our parents face, many companies are rich areas of experience. The exposure in some companies can be better than most start ups. Furthermore, they have failed before and these lessons are passed on. There is received wisdom and modus operandi is a series of trial and error. There is a reason why they are stuck to their ways - it worked. The only failure is a company's lack of agility and vision, which understandably can be lost due to groupthink and set ways.

So ultimately, I've learnt plenty by working for organisations, that I didn't get while working for a start-up. Of course you get the office politics in a office of 500 instead of 15. Of course you have red tape when you have shareholders and authorities to account to. Of course there would be more control because your actions are consequential.

However consider this, control is labour intensive and time consuming. If no authority bats an eye, it may very well be that you're too small to make a significant impact. In that case, what kind of superstar start-up would you be?

Ultimately, I am against ill-experienced, self-important and indulgent start-uppers. Those that can't tell revenue forecasting from market analysis. Those that waste their parents' hard-earned money to bolster their egos.

It's good to have ideas, and above all, it is absolutely crucial to have better execution.

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