Are You Meant To Be An Entrepreneur?
The first steps on the path to entrepreneurship should only come after you've made sure it's really the path for you, says Melissa Graebner, associate professor of management and associate director of the Kelleher Center for Entrepreneurship. Graebner shared these questions with Austin Woman online. The potential answers offer a big-picture view of the entrepreneurial life. Answering them will help you understand whether entrepreneurship is really the path you want to take.
Q. Do I want co-founders?
A. Having a co-founder means you’ll have a companion for the ups and downs of the entrepreneurial experience, and it means that you don’t have to be a Jack (or Jill) of all trades since, hopefully, your co-founder will be good at some of the things you are not. But it also means that you may have some difficult disagreements, and at the end of the day, you’ll be splitting the pie. So, it’s important to think about whether your business idea is big enough to support more than one founder in the long term. If you do decide to work with one or more co-founders, look for people who have similar values but complementary skills. You need to share a vision, but you also need to bring different skills and talents to the table.
Q. Are everyone’s expectations clear?
Early in the life of the company it’s easy to avoid delicate subjects and assume that things will “work themselves out.” Founding teams sometimes postpone discussions of tough topics, like how the equity will be divided up and who has the final say in decision-making. These conversations don’t get easier with time. You can’t anticipate every possible event that could happen, but having some honest discussions early on to make sure your basic expectations are aligned can help to prevent headaches later. If you can’t agree on ownership, roles and responsibilities at the beginning, you probably shouldn’t be going in to business together.
Q. Am I prepared for a sprint or a marathon?
A. For most entrepreneurs, the time will eventually come when you’ve had enough and want to take a break. This is easier for some businesses than others. Joining a high-tech startup is a bit like a sprint; the time commitment for those early years is extremely intense, but if you’re lucky and the business succeeds, the company can be sold after five to eight years and the founders can step down. Other businesses are more like marathons; there’s no quick exit in sight. Some companies are so closely tied to their founders that they can never be sold or handed off to new management. Other industries just don’t have very active acquisition markets. Entrepreneurs in those industries need to be committed to running their own businesses for 10, 15, or even 20 years.
Whether you’re contemplating the all-consuming hours of a tech startup or the lengthy commitment of a small business, it’s important to think about where you are in life in terms of your finances, family obligations and health before deciding to take the plunge. Remember, too, that a sprint can turn into a marathon. When the economy is sluggish, the markets for public offerings and mergers and acquisitions are slow, so even high-tech entrepreneurs can end up locked in to their companies for long periods.
Q. Will I really be the boss?
A. One of the attractions of being an entrepreneur is the idea of being your own boss. But it’s important to recognize that if you take on outside investors—especially if they are venture capitalists or other professional investors—you ultimately report to them. You’ll have a board of directors that can hire and fire the management team. If you’re looking for control, you may be better off being a small business owner rather than getting involved in a high-tech firm.