Is Starting A Company A Terrible Decision?

Sometimes "fail fast" really just means failure. Here are three reasons we don't always realize that we might be setting ourselves up to be let down.

Not every entrepreneur's story is a bootstrapped fairytale. Recently, a HackerNews user going by "themanthatfell" made this lament in a post called "Started a stupid company. Failed.":

Ran out of money. Ran out of credit. Losing house in two months (already foreclosed). Wife pregnant. Three kids all under 6. Pretty sure I am the opposite of everyone here. I am no man. Just a statistic. Everything is gone. Selling spare parts to keep the lights on. It was a nice fantasy. To the rest of you: fight hard and good luck.

The resulting thread is a work of remarkable Internet magic, with strangers offering to revise his resume, make introductions to hiring companies, and other consultations. But as programmer extraordinaire Aaron Hillegass at the Big Nerd Ranch points out, this tale of woe isn't uncommon. Starting a company can be a terrible idea, though we (the tech press) don't readily admit it to ourselves. So let's make a few admissions.

Companies fail, but we don't hear about it

We don't realize how likely it is for companies to fail because we mostly read about the one's that have crazy amounts of success. This blindspot gives us the impression that if you start an app that the kids will love, then you'll be turning down billions from Facebook any day now. According to David McRaney, the brilliant curmudgeon behind You Are Not So Smart, this blind optimism is called survivorship bias. In this way, he says, dreams of Silicon Valley are similar to dreams of Hollywood:

We don't appreciate how much is left to chance

As we've noted before, lucky people are those who expose themselves to positive chance on a regular basis. As Hillegass's story shows, a gigantic change in industry is a major manifestation of positive chance:

I was a smart guy with a lot of real-world experience. I decided to start a professional services company for Apple technologies when Apple’s stock was below $10 per share. I had worked in the professional services team at NeXT and Apple, and I thought there was an opportunity doing training and consulting on Objective-C and its related technologies. I ran around explaining the beauty of these technologies to anyone who would listen, and Big Nerd Ranch managed to grow to seven employees.

And then, in 2008, Apple released the iPhone SDK and the seven of us were suddenly the best programmers in the hottest technology that had ever existed.

Intelligence and competence got him to seven employees. Then luck, in the form of a chance in the course of technological history, catapulted his career.

The quality of life is terrible

There's a reason that Paul Graham says schlepping is a key startup value: over the first few years of founding, you're going to have to spend all your time slogging through the work.

The weird thing about startup land is that long hours are glamorized, a symptom of what Jason James calls the "badge-of-honor-martyr-complex." But long hours can have stultifying effects: exhaustion, alienation, and a sense of treadmilling through your life. All of which adds up to burnout.

So when is starting a company a good idea? Let us know what you think in the comments.

Hat tip: Big Nerd Ranch

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