A lot of people in technology fields consider themselves or strive to be entrepreneurs — to work for themselves, seeking out opportunities to create new value and profit. They’re self-motivated hard workers trying to grow businesses and offer new products and services. There are thousands of web designers and developers out there, many still in high school or recently graduated, that consider themselves just that.
I’m not an entrepreneur. The difference between an entrepreneur and a small business owner is risk. I take only the most trivial risks and grow my business very incrementally. Constantly seeking out opportunities and acting on them involves a lot of risk. Even with the most comprehensive feasibility studies, market research, focus groups, etc., most new products and services will fail. Most new businesses fail. Those that do survive are usually far less successful than projected. Getting to either destination involves time and money.
Most of these new web developers and designers won’t be successful either. Competing with so many around the world willing to do the work for less, they won’t find enough work or enough high paying work to be successful. A lot of web developers are jumping on the web services bandwagon, putting out their own subscription services where the revenue model involves convincing free users to upgrade to paid accounts. Most of them won’t learn the 1% rule until they’ve put in months of work and find the return much lower than they planned.
ToddW: After all your success (with websites) how come you are wanting to work for “the man”? I take it for corporate experience and to better yourself in your own business? Or do you really want to work for someone else the rest of your life?
I don’t want to work for someone the rest of my life, but I also don’t want to ever lose the lifestyle I enjoy. I have never worried about being able to pay a bill, affording some new gadget I want to buy, spending too much on entertainment or having to take out a loan to cover a surprise cost. I’m doing what’s necessary to ensure that, which means taking the safe path in life.
My argument is that this is the path most new independent “tech types” should take as well, rather than trying to live off their own business right out of high school or even out of college. The threads at SitePoint, Web Hosting Talk and other forums I frequent about this are too common. Individuals find themselves working low-paying retail jobs, or living with parents while searching for a job because they didn’t find the success they expected so easily. There are also a number of them in high school or recently graduated asking whether a college degree is worth all the work when they can find freelance work online without even sending in a resume.
It’s worth it. A college education gives you things you won’t ever find starting a one-man business without it: the ability to find a better and higher paying job for the rest of your life, exposure to fields of specialty you might otherwise never knew existed, thousands of potential business partners, job opportunities, research opportunities through other students and professors, and the ability to confirm that the type of business you’re planning to run is what you really want to be doing.
When you can’t find enough work to pay your bills, you have a degree to fall back on, so you can get a job within your industry that you can support a family with. When your business finds itself in legal trouble (warranted or not), is hit by fraudulent payments, suddenly needs new equipment to compete, needs money to adapt to new regulations, you’re not left broke with nowhere to go but fast food work.
Money isn’t an excuse to not go to college. You don’t need to go to an expensive, prestigious university for four years. You can go to a smaller college, even a community college, maintain a high GPA and transfer for later years. It’s the last one you attend you get the degree from. You don’t need to have no income or live in poverty to qualify for federal and state grants. They’re there for the taking even for the upper middle class. Beyond grants, almost anyone can get federally subsidised loans, and you usually don’t need to make payments until half a year after you graduate. Then there are the thousands of scholarships available if you’re willing to take the time to apply. Plead your case to the college you want to attend’s financial aid office and you’ll often find even more free money.
Once you graduate, get a job. Get the best, most interesting job you can. If you had the passion and business sense to run your own business, add a college education to that and you shouldn’t have a hard time landing a good job and quickly moving up the ranks. Learn as much as you can from wherever you’re working, from the people you work with. You’ll learn things you can’t learn in a classroom and you can’t learn reading online “tutorials” by actually working in the industry you wanted to work for yourself in. You’ll see the interaction between employees and management, the challenges companies face and the technologies they use to deal with bigger customers than you’re likely to have.
Then use that to start your business. Work nights and weekends building up your customer base, your portfolio of experience, your network of business connections. Use your experience from your day job to do it better, to identify new opportunities for growth and new problems your company can solve. Build up your income and your savings. Then some day, when you have the money in the bank, the portfolio and the contacts, you’ll be ready to work for yourself without the risk. The risks were taken back while you had a full time job to fall back on in case you didn’t find the success you expected.
The safety net works in reverse too. If you’ve been working hard on your business in your free time, should the company you’re working for suddenly close or downsize and you find yourself out of a job, you have both sources of income and the extra income you’ve been saving from all that extra work protecting you.
Or the path may lead you somewhere unexpected. You may find that the business you thought you wanted to run isn’t something you can spend 8 hours a day on after all. Or you may find a much more interesting field of study and work. Or you may find you’re not really an entrepreneur at all. You were just looking for the easy way out, not knowing it wasn’t really easy. But that’s alright, because now you have a college education and a great job.
Sara
January 26th, 2007
I’m with you Dan and that is how I have done it the last few years. But the way I did it or the way you did it may not work for everyone. I started my company 4 years ago for several reasons, but what really prompted me to was that I couldn’t find a programming job. A few months later, I got a programming job, but I continued working on the company part-time for the next 3.5 years. During this time I worked for the Army as a .NET developer and I learned so much that I wouldn’t have been able to learn on my own. I also had a really great salary that gave me the same security that you experience. As of last August though, I am now working for my business full-time. I don’t make nearly as much as I made, but I can pay my bills and do things that I want to do. Now is the right time for me. I’ve got the education behind me (I received grants and scholarships to help pay), some real world working experience, and I’ve learned quite alot about my business over the last 4 years that let me really ease into it so taking it full time, wasn’t a huge leap for me.
You definitely have the right attitude in my opinion. But, I may be biased as you seem to echo a lot of my opinions.
Jason
February 2nd, 2007
I agree in most cases, but using a sweeping generalization like that isn’t entirely necessary.
When I graduated college with my Computer Science/Business degree, I hit the interview trail and got a job - a good one. I loved the company, but I HATED the job. I hated having a boss, hated having to go to work in the morning, hated not being able to do what I wanted to do, generally hated not having control over my own actions - and not having the responsibilities of my own actions, as well. But most of all, I hated having to wait months for a raise.
So, I quit my job and went out on my own. Now, two years later (I’m 25 now) I’m making more than I did at my job, and I have an incredible foundation for my business - I expect to hit the 7 figure per year mark in the next 2 years and I’m the only employee.
I’m a testiment to the fact that not everyone needs to get a “job” - you just have to do what you enjoy. If you enjoy having a job, working for someone else, having that predictibility and stability (yes, the income and benefits are much more stable than starting your own business - at first) then get a job and work your way up the ladder.
But if you’re not that kind of person, what’s the big deal about living with understanding family or friends while you start your business? Just know that it’s harder than “If you build it, they will come” but it’s much more rewarding, too
jarrett
May 25th, 2007
hey guys,
great article, i enjoyed reading it. I have a question, however. How high would you rate a university/college education for starting your own business in this field? Right now I’m finishing my 3rd year of university for a Computer Science degree, and I personally can’t stand it. I don’t do poorly in school, I’m just bored out of my mind and really feel like I could be doing better things with my time. I’ve been seriously considering dropping out and starting my own business, I’m just not sure what kind of success I can expect, or if it’s a smart move. Is it really worth it to tough it out if all I’m planning to do is do my own business anyway?
Dan
May 25th, 2007
Most small businesses fail. What will you do if yours does? Why can’t you start your business while you’re in college, and consider your classes a break from doing your work each day?
Jason
May 26th, 2007
I was in the same boat. I was soo bored with school and was annoyed at how little my teachers actually knew. However, I stuck with, albeit part time. For the past year I have been going to college part time, working on my small consulting company, starting a startup, working 25 hours a week doing tech support for a hosting and domain company doing the graveyard weekend shift (boy does that suck!), and balanced a social life and relationship with my girlfriend (now my fiancée).
So, I would say stick with school. It NEVER hurts to have a degree, but can seriously hurt not to have one. If you are really driven and passionate, you can do just about anything. It wasn’t always easy doing all the above, but now I graduated, quit the hosting job because my small business and startup can support me, and I am getting married. If anything, go part time. But Dan is right, most small businesses fail and it is very hard to keep one going. In my business, technology consulting, I only have succeeded thanks to knowing the right people. Some of those people you meet in college ïŠ
jarrett
May 28th, 2007
heh good point, I have no idea what I’d do if it failed..I think I’d pretty much be SOL. As for starting a business with classes, I guess it’s really my only option. Hopefully working on something I want will keep me sane for the last stretch of school.
Thanks for the responses guys!
Eric
August 2nd, 2007
Thanks for the insight.
This applies only to entrepreneurs, prospective doctors, please stay in school.
I think it really too situational to generalize, it’s like asking “should I get divorced”. Sometimes you have a good reason to, sometimes you don’t.
I think if you have a clear vision of what you want to do, and you don’t think you can benefit from college, then just quit.
However, if you have the vague idea of “starting a business” and aren’t willing to work 80+ hours weeks or you are “just bored”, then stay back in school.
You aren’t going to (well at least I didn’t) learn anything that you can use for starting your business. In terms of networks, I guess it depends on your school. I most certainly didn’t encounter a business partner in school.
Of the most popular reasons to stay in school, I offer the following opinions:
Job- you can always take some money from your business out “just in case”. You will not be rich in the next 5 years (probably) working for someone else, “not much money” will always be a problem until you’re 30 (or so). So use your brain.
Credibility- only an issue in some industries. But usually, you need an advanced where that would matter (e.g. life sciences)
Learn something useful- get a library card and borrow library books. Ask the authors if there is something you don’t understand, a lot will reply.
“Everyone has a degree”- everyone is not a successful business mogul. Everyone is an average Joe by definition.
Just my guess, but I think a lot of stories about businesses taking off then dropping out of school are made up by the media. I’m not sure where people got the time to even start, I was behind precisely because of school.
If you have the money to go to college, why not just start a couple of cheap businesses?
If you can find money to support yourself in school, why can’t you just support yourself while running business?
Jack
January 15th, 2008
Great Article, I think it really depends on what kind of person you are. Like, most of these fresh out of college/still in college kids who want to be web developer upstarts have great technical skills, they can code the shit out of a website…but they couldn’t hold a conversation with a potential customer without overloading them with technical jargon that the customer doesn’t want to hear, so the customer goes elsewhere. Then they wonder why no one buys their product (websites) when they have absolutely zero understanding of business.
Because what you need to be a successful entrepaneur, is the ability to understand every side of a business (from producing the product to selling the product to managing your people, because you can’t do it all yourself and expect to be able to compete with the big boys). And most of all, you need the balls to take some risks, you need the balls to “bet the farm” if you will, if you truly believe in your product. But that belief needs to be founded with a pessimistic outlook, ie: worst case scenario can it still be viable?
You need to pick your product apart from every side before you take it to market. The reason most of these web upstarts & small businesses fail is because they do everything in the wrong order, they don’t have a good judgemental centre to found their business on, they work on “best case scenario i’ll be rich” rather than “worst case scenario i won’t be viable”, they don’t know how to market or how to manage people effectively, and then when it eventually goes to shit once the loan they used to fund their business or their own savings run out, they go and blame their competitors. Fact is people with that attitude, that outlook, simply aren’t cut out to be entrepaneurs, and so they fail when they go into business.
I mean, even in our economy, where if you talk to any accountant they’ll tell you small business is fucked, we still have companies (the googles, the yahoo’s, the myspaces & the youtubes, and a whole swag of businesses in every industry) starting up, being successful, and raping their competition, because they’re founded by people who are cut out to be entrepaneurs. People who rip their product apart harder than any customer will before they go to market, people who look at the industry they’re going into and create strategies to slice out a big part of it for themselves. People who can see holes in any industry where they can go in, create a “new” product, have a short term monopoly, and then get bought out by some mass hoss company.
Simply, If you want to be an entrepaneur, you’re not going to simply have a skill, you’re going to be a leader, you’re going to be intelligent, you’re going to be capable to do every side of your business to an excellent level, and most importantly you have the right attitude. You have the attitude of if someone doesn’t buy my product, it’s my fault. It’s not their fault because they’re an idiot, it’s my fault because i didnt make the product have enough value, or i didn’t sell it right, or i left them unsatisfied. Thing you find with all these mega-sucessful entrepaneurs is they are very personal responsibilty minded, because if they weren’t they’d blame their competitors or the government or the media or whatever everytime they failed somewhere in their business. Successful entrepaneurs instead blame themselves, and are their own harshest critics, which in turn makes their business ventures more successful because when they do finally take their product to market, having worked out the production, the organization, the distribution, the marketing, the sales, and the management of their customers, they meet success, because they have products that are harder to shut down.
People that don’t have that attitude, that drive and motivation, and that ability to lead others, and motivate others towards a common goal, just aren’t cut out. Some people can become this, some can’t because they’re too afraid to ever take risks.
Myself, well, I Dropped out of High School, didn’t really know where i was going to go, worked at a supermarket for a couple of years, until about a year ago when i quit. Had enough money saved up to cover my living expenses for 3 months, With the idea to start an advertising company, Creating My own Yellow Pages kind of gig. I live in an Area Of Australia Called Torquay, Kind of Yuppie upper class gig with surfies. Myself and a friend of mine, decided to make a slick, full gloss phonebook, pocket sized, with maps, etc. It was hard, seeing as we both had very little experience with photoshop & Indesign, etc. However we’d stay up late every night, work every day of the week, putting it together, and go door to door with businesses selling it. In the first week, selling each day 9-5, I’d sold 3 ad’s. And i think they bought them more out of pity rather than anything. So, i sought out a friend of my father’s who runs a sales business, had lunch and picked his brain on everything, i studied what i’d learnt from him and worked it into my routines. The next day, I sold advertising to 8 of the 10 people i saw. Reason? Not I went to a sales school or i’d been trained, but because i realized that what i was doing wasn’t working, so i sought out a solution to try to make it more effective. Little things like appearance, a namebadge, maintaining eye contact, controlling the flow of the conversation, selling the value, the benefit, rather than the cost, all made huge differences. Now, i manage 8 sales staff & 3 graphic designers, and we produce 4 phonebooks in our region, each with about 250k worth of advertising in them. Funny thing is if i never took the risk to get into it, i’d still be working at a supermarket, stacking shelves.