In April 2012, a 27-year-old nobody named Kevin Systrom picked up a check for a cool $400 million. He and a friend founded a company just two years prior that not only allowed people to share pictures of really uninteresting and generic foliage, but also apply fun “filters” to the images in a vain attempt to disguise their flagrant mediocrity. By now you may have realized that Systrom was one of the inventors of Instagram: the photo-centric social media platform bought by Facebook for $1 billion in April 2012. While I actually harbor no ill will towards Systrom or Instagram, I believe that such incredible success stories distort people’s perceptions of the entrepreneurial and start-up sphere.
Though being the next Systrom, Elon Musk, Richard Branson or CEO and co-founder of Bubba Gump Shrimp is a favorite aspiration of the two-beers-deep college student, it is not a smart path to pursue directly out of school. Self-employment or running one’s own business is a great endeavor for later in life. Recent graduates, however, would be better off building a solid reputation while accumulating real experience along with a host of professional connections in well-established firms and organizations.
Consistent readers of my column—Mom and Dad—know that I harp ad nauseam on the importance of business relationships. Mostly for my own sake, I will not continue beating the long dead horse. Suffice it to say, strong ties with colleagues across an industry can mean the difference between founding the next Amazon and being relegated to the overflowing “Page Not Found” trash heap with the other broken dotcom dreams.
On a similar note, how do you expect to attract funding, support and talent if you lack notoriety—good or bad—and a history in your chosen field? Acquiring financing or competent employees necessitates having a reputation within the trade. Why would a major creditor or someone with 20 years experience coding even bother with your social media company? Your record at well-known firms will allow others a chance to do their own due diligence (on you) before deciding whether or not to back your project. Few will invest their time or money without a proper background check—though you might be able to net some other inexperienced, beer-stained sweatpants wearing, fresh college grads.
The most basic question you should ask yourself before committing is “do I know how to run a business?” Are you honestly capable of determining and properly articulating your company based on factors such as market trends, supply chains, consumer demand, sales figures, cost structures, EBITDA, competitor positions, customer service, research, technology concerns, tax strategies, and write offs? Do you even know how to go about paying the office power and water bill? If not, do you know people who can?
Scott Adams, a wildly successful entrepreneur who created and continues to write the comic strip Dilbert, might surprise some by being rather pessimistic regarding self-propelled ventures. He makes an excellent point differentiating between concepts and a functioning firm: “Good ideas have no value because the world has too many of them. The market rewards execution, not ideas.” This quote explains why startups—especially with inexperienced and young people at the helm—have such a high failure rate: there is a significant gap between your “almost finished” brilliant app and having actual paying customers.
Please do not take this article as a rant against original thinking and bold innovation. I respect and admire those that have taken great risks against the system and in turn received well-deserved dividends. But I cannot, in any good conscience, recommend going out on your own without at least serving, learning and even suffering for a time under the “the man.” Be patient. There will be plenty of time to fulfill your entrepreneurial ambition later in life—when you are not forced to run the business out of your parent’s basement.