Wednesday, January 18, 2012

We Can't All Be Astronauts

Back in the 80s, I remember one of my Uncles telling me how he thought it would be an awesome idea to have a store with a few blenders that made nothing but fresh fruit smoothies. I thought it was a stupid idea, but I was probably only 7-8 years old, so what would I know? Therefore my Uncle invented Jamba Juice (or Boost Juice in Australia). Except of course he didn't really, because although he had the idea he never acted upon it. Now this might have been for any number of reasons, but most likely the reality of trying to support a family meant that he did not feel he had the opportunity to engage in a risky proposition like starting his own business. 

So this has got me to thinking a lot lately about the role of the entrepreneurs and startups in the economy and the associated general perceptions. There is no doubt that society has a large amount of admiration for entrepreneurs. Particularly in technology, founders are a highly visible part of a company and held in high esteem. Jobs, Gates, Brin, Page and Zuckerberg are household names. The ability to build a multi-billion dollar business in a short period of time from nothing but thin air is no doubt impressive.

From a business perspective, the beauty of the technology and the Internet are the almost non existent barriers to entry. I could have an idea on how to build a better super jumbo than Boeing or Airbus, but aeronautics is a highly capital intensive industry that would require billions in investment, with no prospect of a return for years. In Formula 1, there is an expression that is used to explain team ownership, which says that the best way to become a millionaire in Formula 1 is to start as a billionaire. Elon Musk (Founder of Tesla and SpaceX) comes to mind, who could be said to have doubled down his fortune in highly risky areas that you would traditionally not see new entrants. The Internet has helped create a more accesible environment for coming up with the next big thing. If I had an idea on how to build a better social network, then there is little stopping me from quitting my job and getting to work on it, aside from only having a rudimentary ability in coding and not really actually having any ideas on how re-inventing Facebook could be profitable. That aside, I constantly see new products launch that I think, "wish I had thought of that first".

So what do I mean by we can't all be astronauts? The space program was a very powerful marketing tool for the US in the 60s, with the astronaut held up as the ultimate embodiment of the good, strong, brave American. I am certain many children dreamed of growing up to be astronauts, but the chances of this happening were infinitesimally slim given the small number of people actually accepted into the US space program. In a similar vein, it would be great if we could all go out and start our own business, achieve commercial success, become independently wealthy and have that sense of achievement that comes from creating jobs. It is however not practical for everyone to attempt to earn a living in a business they started themselves. In the first instance, not everyone is suited to operating in that sort of environment. I have huge admiration for the rare combination of intelligence, ambition and straight out balls it takes to go out and start your own business, independent of whether it becomes a success. In reality, very few new tech business ideas get to an acceptable level of profitability and even fewer go on to Facebook levels of success. Also if everyone had the idea to be their own boss, who is going to work for you to build your new location based, group discount, bit coin, micro-blogging, cloud based, unicorn fart monetization service? If you were to ask anyone in the street if they would like to be the CEO of Facebook, I'm pretty sure the majority would say yes. If you asked those same people whether they would like to quit their job and work on a project for the next two years where they will earn no money with a fairly slim chance of success, the response would be a lot lower. There are differing levels of risk that people are willing to take on. 

So I have also been thinking a little bit about my own experiences. Although I live in Silicon Valley and consider myself to be employed in high tech, I in no way would pretend to be part of the startup scene. That is not to denigrate it as a scene, just that my background and my current employment do not fit that mold. I went from a large corporate of 50,000 employees in Australia, to a profitable private company of 1,500 employees here, to another cash flow positive company of 150 employees. My experience in Silicon Valley has been in somewhat established businesses with a fairly low risk profile to me. Conversely my upside following an equity event is a lot lower as employee number 150, than it would be as employee number 5. I have worked hard to get to where I am, but it is fair to say that I have marched along a path that has not been super difficult for me to find. My opinion has always been that while I enjoy what I am doing, continue to learn new things and I have an upward trajectory, then I am on the right track. I have no regrets and do not feel the path I have taken is any less valid that that taken by an entrepreneur, but I am ambitious and constantly evaluating my career based on momentum. I obviously can't predict what I will do in the future, but I am certainly open to the idea of doing my own thing or working on a new business idea with others, but it has to be something in which I truly believe. That said, starting my own business is not my raison d'ĂȘtre.

Besides, Neil Armstrong was five years older then me when he walked on the moon, so I still have some time left to make it there, but being the guy that designs the rockets isn't such a bad gig.