Blimey! Someone agrees with me about entrepreneurship
There is a sense of relief whenever I see a writer or journalist speak openly about the pitfalls of starting one’s own business. On this occasion, it was Sathnam Sanghera who had written an article in The Times entitled, ‘Dream of being an entrepreneur? Trust me, they dream of being you’. However, as the piece is behind a paywall, I thought it worthwhile to provide a synopsis in a slightly less articulate fashion (he is a professional writer and I am just an amateur after all).
Sathnam encapsulates the sentiment of my blog within the opening paragraph: ‘Does the extent of the relentless coverage [of entrepreneurial success] … risk creating a warped idea of what entrepreneurship involves?’
He quotes Tomas Chamorro-Premuzic, professor at Columbia University who describes stories of start-up success as ‘entrepreneurship porn’. This ‘porn’ has lured many to starting their own business and neglects to highlight the costs involved with such an endeavour and the likelihood of it actually succeeding.
Sathnam also talks about something I was unaware of; whilst I knew full well that significant wealth improves the chances of business success, I never realised that being older also improves these chances. ‘It has been shown that the odds are against young entrepreneurs, with the Massachusetts Institute of Technology finding that twentysomething founders have the lowest likelihood of starting a company with a successful exit.’ In essence, a 50-year-old has almost twice as much chance of succeeding in starting a business than a 30-year-old. This evidence makes me want to cry out, “WHY DON’T MORE PEOPLE TALK ABOUT THIS?!”
And yet there is more. Sathnam speaks of how small start-ups are perceived as job creators. In my own experience, the only jobs that start-ups seem to create is one for the owners themselves. He refers to academics who have argued that what jobs start-ups to create are generally poorly paid jobs and the business itself often suffers with low productivity (see my previous post, ).
Sathnam provides a great insight into why start-ups tend to receive a pervasive level media coverage: ‘The reason we journalists are offered so many entrepreneurs for interview is that many hope that the publicity will attract someone to buy them and realise an exit.’ This, for me, epitomises the difficulty when trying to offer a more balanced opinion on starting a business. There is very little incentive for entrepreneurs to speak about the odds being stacked against them and that starting a business can have unintended consequences, including difficulties in obtaining personal finance. Instead we are bombarded with the excitement and untold riches that can be obtained through building a start-up. This has become virtually received wisdom on the subject, which very few people are interested to challenge. And for this, I am hugely grateful for Sathnam’s article.