“ A little learning is a dangerous thing.
Drink deep, or taste not the Pierian Spring;
There shallow draughts intoxicate the brain,
and drinking largely sobers us again.”
― Alexander Pope
It was in 2015 that I was first introduced to the word "Entrepreneurship”. I started digging into the notion of becoming an entrepreneur. It seemed quite exciting because entrepreneurs are sold to us like glamorous celebrities. A mechanism to free yourself of your horrible boss and live the life on your terms. Well, 4 years, quite a bit of research, a few online courses and luckily wasting only three months of my life, I have to make a case that entrepreneurship is completely misunderstood in the world today.
Entrepreneurship holds a very specific meaning that we ought to understand correctly. I will break it down.
Entrepreneurship
Simply put, an entrepreneur is someone who has a novel idea and then he puts all his efforts into his idea. As Steve jobs said, “ To put a dent in the universe”. Your idea can take years to make it a success. Therefore, you must be in it for that idea and not a lavish lifestyle. Unfortunately, entrepreneurship is being used as a substitute for a cure to a 9-5 lifestyle – which it isn’t! Nowadays, the primary goal of entrepreneurship is not to build something new, but to somehow catch an investors with a false hope that maybe landing a huge investment is all it takes to become successful entrepreneur.
Take LinkedIn as an example. The famous employment-oriented service has around 300 active users each month. Well, according to a 2018 report, Linkedin is still operating at a loss, mostly due to long-term costs associated with the acquisition.
Elon Musk is a great example of an entrepreneur. As he said, “My proceeds from the PayPal acquisition were $180 million. I put $100 million in SpaceX, $70m in Tesla, and $10m in Solar City. I had to borrow money for rent." Even as a billionaire, he works around 12-18 hours a day.
All you need to ask yourself is this, would you still work 18 hours a day if you were a billionaire, or would you rather take a vacation?
So before you make a choice to become an entrepreneur, be sure to analyze what you want from your life. Do you want to make more money or do you want to change the world?
Business
We all know what a typical business is. You probably know someone who owns a business as well. Even though every other businessperson identifies himself or herself as an entrepreneur nowadays, the primary focus of a business is to make money, not bring innovation to the world. Elon Musk would never have released all of Tesla’s patents if he were a businessman.
Being a business owner in itself may be rewarding but it still requires your oversight. If you believe you can start a business and take a long break without directly managing it, you have another thing coming.
You might wonder, if I still have to work all day, why even start a business. Why not stick with my job? I personally explain it something like this: In a job, whether you give your 10% effort or a 100%, you will get the same pay (to get a raise you need to put in a 200% work because nobody usually notices your 100%) whereas in a business, the more the effort the greater the reward. You give 100%, you get 100%, period.
I personally recommend keeping a job if you are a slacker and you just want to complete your hours and get paid. If not, start a business ASAP!
Investing
When we look at the Forbes list, we look at exciting people like Mark Zuckerberg or Bill Gates but if you look closely at all the billionaires today, most of them, almost 90% are avid investors.
Investing is something we are rarely taught about. You might have read “Rich Dad Poor Dad” but you stopped there didn’t you? I would suggest go a little deeper, read the strategies of people like Warren Buffet, Charlie Munger or Mohnish Pabrai.
The story of the Patel Family (Who now own 40% of all the motels in USA) as described by Mohnish in his book “The Dhando Investor” is a must read.
Investing is not easy but it is definitely worth it. As you become successful, you can actually spend a good amount of time on your hobbies, which isn’t quite possible if you stick to your own business only. As Warren Buffet beautifully said, “Most businessmen limit themselves to their own field”
An interesting story about Mohnish is when he was at a hedge fund conference and someone asked him how much time does it take him to manage a Billion dollar portfolio and how many people does it take to run it? His wife stepped up and said, “He spends 0.1 %” which means he spends most of his time hanging around the house.
Don’t be fooled though. Starting out, it takes a lot of reading and understanding to become a good investor but it is definitely worth it.
Don’t follow you next door uncle who might have invested a small amount on a friends advice and lost it all. He will definitely have a different point of view. Go to the top and read about the best out there. Phil Town's YouTube channel is a good place start. If you want to become the best, you must learn from the best. Just like Mohnish learned from Warren.
Which is the best way to be successful? Well, I don’t know because I haven’t made it yet. What makes sense to me now is starting a business first, then going towards investing and becoming an entrepreneur as the last step. Becoming a good investor creates wealth while consuming a fraction of your time when compared to the time and energy required to run a business. This allows you to think about your entrepreneurial venture without having to worry about making your ends meet, and that increases your creativity, which is much needed in order to become a successful entrepreneur.
I talked about investors even though this post is about eradicating the false notions associated with entrepreneurship. It is because I see investing as a bridge to become a low-risk entrepreneur. Many of us look towards entrepreneurship as the cure to horrible bosses and a 9-5 job while I believe investing in the real cure of a 9-5 job. You will definitely have to put in the effort, but you it will be rewarded with more freedom.
" Beware of false knowledge; it is more dangerous than ignorance." ― George Bernard Shaw