Movies depict a grand view of an entrepreneur, a view of a life that’s filled with bright ideas and enthusiastic men and women. The dedication to their dream unrelenting and somewhat childlike in a sense that they show the world anything is possible. The true grit and sacrifice of an entrepreneur cannot really be summed up in an hour and forty minutes.
Pertinent observations arose in a 2015 Barclays study on the psychology of entrepreneurs, conducted in partnership with The Psychometrics Centre at the University of Cambridge.
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“Does a certain ‘type’ of person become an entrepreneur, no matter what – or does the political and regulatory landscape of a particular country determine the type of person who will succeed as an entrepreneur?” the study asked.
“Could we all be entrepreneurs, given the right environment? And what is the right environment to encourage the entrepreneurs most likely to succeed?” the study continues. Not everyone will end up being entrepreneurs, but those that do, have overcome the above observations in their own capacity.
Greg Davis, the Head of Behavioural and Quantitative Finance at Barclays, correlated the importance of entrepreneurs to successful economic growth. “Entrepreneurs have an important role in supporting economic growth and social progress through the creation of new jobs and proliferation of new skills,” he says. This is a huge factor in that before you’ve commenced with your startup, there’s already a need for your ideas and input.
Why the world needs entrepreneurs
Before we go into the pros and cons of starting your own business, a 2014 study conducted by IZA World of Labour and the University of Potsdam in Germany elaborated on why the world needs entrepreneurs:
Pros
- Entrepreneurs accelerate structural change within rigid economic firms
- They provide job opportunities (the most obvious one)
- Emerging markets brought in by new entrepreneurs challenge existing ones, creating fair and balanced competition, which also stimulates economic growth
- Entrepreneurs boost economic growth by providing new services, products and technologies, which can serve communities directly or indirectly
But much like any pros, there have got to be a few cons as well:
Cons
- Not many entrepreneurs have the drive and dedication it takes to become entrepreneurs
- Entrepreneurs face a big risk of failure, often at the cost of taxpayers
- It’s impossible for entrepreneurship to flourish in an economy that’s overregulated
It’s clear that economies need innovators; free-thinkers that are determined to create their dream no matter what.
What you should know about starting a startup
According to the Barclays study, three important traits arose during their research. Entrepreneurs have a strong need for autonomy; how important is your need to influence the objectives of your work? Entrepreneurs show a sense of self-efficacy; how important is your self-belief in succeeding in your task? Lastly, how strong is your motivation for pursuing your goals? These traits aren’t the be-all and end-all of entrepreneurs, but they’re the spark to the fuse.
If you exude these traits and are willing to take the plunge, here’s what you should know:
Pros
The freedom that comes along with venturing into the market
We interviewed Guillaume De Smedt, Global Community Director of StartupGrind, which hosts monthly networking events in over 200 cities (including Cape Town and Johannesburg) and over 85 countries, on his thoughts on the pros and cons of starting your own startup.
De Smedt knows all about the freedoms being an entrepreneur can offer. “Modern technology is wonderful in the way it can now allow founders of certain startups to travel extensively while still running their businesses. My wife and I were able to travel to six countries over four months while still actively managing our respective businesses,” he says.
Your income has the capacity to be greater than what it is/was working for someone else
Becoming an entrepreneur requires you to sacrifice a lot upfront but, being hopeful and dedicated to your craft, the rewards can be greater than when you were employed by someone else. “When things go well, and you are in the right industry, you can earn more money than being employed,” said De Smedt.
Personal gratification and satisfaction
Venturing into the world of startups, your business becomes like a child, you help it grow and become stronger, feeling a “sense of achievement, growing something from scratch that is your own, and nurturing it through its different stages”, says De Smedt. “Nothing can beat the ‘high’ of a win, like landing your first big new client, or closing that elusive deal,” he continues.
You have the ability to succeed/fail according to your own merits
What you put in can be what you get out and more. The effort you put in can determine whether or not your business fails or succeeds. If you slack, your business will slack. However, being forced to put in a tremendous and intelligent effort can resort to you growing as a person. “When you leave your job, you think your CV will reflect ‘unemployed’ and worry that should things go wrong, you may not be able to get a job again. By running a startup, you end up doing a bit of everything and therefore actually increase your skills set,” says De Smedt.
Cons
Freedom needs to be disciplined
Having freedom means you have to be disciplined in how you spend your time, having no one to answer to can be extremely gratifying. As an entrepreneur you should keep in mind you still have people to answer to. “While you might not have a ‘boss’, people forget that your ‘boss’ is your client,” says De Smedt.
Financially and socially taxing
There’ll be times when you’ll go weeks or months without seeing a personal income as you’ll be required to risk a lot not just financially, but socially too. “You never get to switch off, it’s a 24/7 job. Some of the best ideas come while in the shower. You need to be passionate about it, else you are unlikely to put in the 24/7 work and therefore possibly not succeed,” says De Smedt. “Working 24/7 means not seeing friends and family as much as you used to/want to,” he adds.
The sheer responsibility you carry
Launching your own startup, it might just be you and a handful of others on this journey with you, but the bigger you grow the larger your responsibility to your workers becomes. “When you expand and employ staff, you will have good and bad months financially, but you always have to ensure that you can afford to pay your staff as their families are relying on you,” says De Smedt.
Becoming an entrepreneur can be a daunting task; you’ll hear stories about those that failed, those that weren’t willing to put in the effort. Sometimes your own family will be the ones telling you not to risk it. Some out of the love they have for you, wanting to not see you fail, but also not fully believing in you. Others just because they don’t want you to succeed.
Take comfort in knowing that you aren’t in this alone, the ones that came before you succeeded in their dream, so why can’t you?
Featured image: Erikaow via Flickr
