The second .com boom has created many a self-made billionaire. A substantial number of said billionaires come from entirely unremarkable academic and professional backgrounds (case in point: WhatsApp’s Brian Acton). This has inspired an entire generation of people, mostly Gen Y and millennials, to forge their own rags-to-riches stories.
That’s one of the best things that has happened to humanity in the last century, but also one of the worst: for every Mark Zuckerberg, the unvarnished truth is that there are at least a hundred John Does languishing in the pits of startup hell, who will never see a single cent materialise from their misguided efforts at creating the next big thing.
Fortunately or unfortunately, I’m a part of the same tech-crazed generation of dreamers. I gave up a lucrative career at a Magic Circle law firm to teach myself programming, and despite being completely cognisant of my very apparent limitations, still harbour the hope of one day having my own personal fiefdom in the kingdom of technology.
As a result, apart from a short year after my graduation, I’ve spent most of my (admittedly short) working life in and around a variety of startups. In that time, I was briefly involved in two pre-seed start ups in very different industries. At the same time, I’d also spent a year at a well-funded start up, and now work as a web engineer at Tech in Asia.
As a direct consequence of these varied experiences, I’ve also come to form a set of strong opinions about when and whether you should join and/or bootstrap a start up.
Your startup will probably fail
If you spend any significant amount of time with would-be founders, you’ll most likely very rapidly discover that the word “failure” is extremely taboo in such circles, and rightly so.
The fact is, the startup grind is punishing, and requires unyielding self-belief of those who dare tread where dragons lie. But more often than not, the very motivation that drives most founders to start their own companies amounts to nothing more than delusions of grandeur.
Therefore, the first thing any would-be founder, co-founder, or early employee needs to square with is the reality of imminent failure constantly looming on the horizon. It’s often said that failure is the best teacher, and it is. But like most good teachers, it is also utterly terrifying. If you haven’t got the stomach for it, you should probably step away before the incessant fear that all your hard work will very soon come to naught consumes your soul.
You are probably not good enough
Following on, if you’ve decided that the prospect of crushing defeat is something you can stomach, the next question every founder faces is this: “Can I actually do this?” The answer is no, you probably cannot. Men are not made equal, as much as the politically correct horde of neo-liberal millennial would like to convince you otherwise.
Leading is extremely difficult. A leader has to be a walking contradiction. He has to be empathetic to a fault, while at other times, must make merciless decisions on his quest to find the rumoured unicorn. He must both be transparent and a consummate poker player. The list carries on ad naseum. That’s a tough tight rope walk, and one that most don’t get very far in.
As such, it is imperative that you question yourself, and/or your co-founders, if you have any. If you’re an early employee, do you know your founder well enough? Do you, in your heart of hearts, believe with everything you have, that you, your co-founders, or your founder(s) respectively have the iron in them? If not, you should quit, right now, because if any of these key people fall short, your company will invariably blow up in spectacular fashion.
Show me the money
Gone are the days where a group of university students holed up in a hall somewhere on campus could bootstrap the next multi-billion-dollar tech giant.
Ever since tech companies began to exit (either via trade sale or IPO) at absurd multiples of initial investment, venture capital, private equity, and institutional money has come flooding into our industry. Every problem has multiple solutions, and where there’s gold, there are gold diggers.
The upshot is that a startup in today’s environment is not going to survive without some form of significant funding. No, the $50,000 you painstakingly saved up working your 9 to 5 that you plan to use to pay some offshore development company to produce an MVP is not significant. Hiring the right people to do the things your company needs to grow — PR, marketing, product development, community-building — isn’t cheap. Without them, your company will never see revenue — much less profitability and a lucrative exit.
As a result, if you, your co-founders, or your founder(s) haven’t got access to substantial sums of money with which to keep your company afloat in its infancy, or the means to otherwise do so, you may as well spend your time and money on a good holiday — at least you’ll enjoy that ride.
In the trenches
In any start up, teamwork is essential. Unless you’re an omniscient divine entity, you will need co-founders and early employees. You may be on the other side of the coin, and are thinking of joining another entrepreneur on the journey to an early retirement. Either way, you’ll need to very carefully consider who you’re getting into bed with, because a company is only as good as its weakest link.
As mentioned, the start up grind is more likely than not, not going to make you a rich man. Especially in Asia, 8-digit exits are par for the course, with 9- and 10-digit exits putting a company squarely in the mythical creature bracket.
Even if you are successful, and you and your co-founders indeed find a decent exit, you’ve most probably given up so much equity to venture capital and other investors that you’ll be left with a pittance of a stake for your efforts.
That’s why a team mate whose only goal is to make a killing is nothing more than toxic waste that should be purged — or gotten far away from. Nothing ruins morale and innovation more than money-grubbing charlatan. While even in a great team drama and fights are inevitable as the grind begins to take its toll, having a co-founder who tries to squeeze you of your cut at every turn is the most sure-fire way to end your journey in tears.
Life is still good
This piece isn’t meant to be the wettest blanket you’ve ever come across, despite how it may seem to be. After all, fortune favours the brave (and occasionally, the foolish).
Ultimately, there is no codified standard set of questions to ask in deciding whether or not to embark on the journey of tech entrepreneurship. If you have a dream, chase it — after all, there isn’t much else worth living for in life. That being said, I do hope, however, that my experiences (mostly painful) will save at least a few from having to learn — ironically — by experience.
This article originally appeared on Tech in Asia