How to Stop Worrying and Start a Company
In this edition of “Ask Mario,” we talk about entrepreneurial leaps of faith, the newsletter business, and pragmatic optimism about crypto.
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I’m excited to share another edition of “Ask Mario,” the series in which I answer your questions about tech, venture capital, writing, and much more. In today’s edition, we dig into three great prompts:
How do you make the “scary” leap to become an entrepreneur?
How do I feel about crypto after the “cleanup” of 2022?
Why aren’t there more newsletter companies making $100 million in annual profits? How could someone get there?
I hope you enjoy it! And don’t forget, if you’re a member of our premium newsletter, you can submit a question for me to answer in a future edition at the bottom of the piece. I’d love to hear from you! (And if you’re not, now is the perfect time to join!)
I find that I have many business plans and potential startup ideas that I could see myself pursuing. But I find it difficult to make the leap and the decision to go full steam and execute. How did you cross this gap and decide to leave the support of a “regular” job to create the Generalist? What’s your advice for someone who needs to take that first scary step? – J
I felt this question in my gut, J. I have been in your shoes and remember it well.
Back in 2020, when I was considering going full-time on The Generalist, I fretted about it incessantly. It seemed like such a ludicrous choice: I had spent years trying to break into venture capital with an unorthodox background, only to consider leaving it as I got my feet under me. Worse, I was thinking of doing so to start a newsletter: an alternative with lower stability and, presumably, a lower ceiling. I didn’t know anyone who had become wildly successful by running a mini-publication.
In hindsight, I drastically overestimated the risk of entrepreneurship and underestimated my abilities and the upside of the opportunity. Though every business is different, as primates with a loss-aversion program running in our cranium, I think many of us are predisposed to making this kind of miscalculation. Above all, I’d try to recognize the faulty evolutionary software that might undergird your fears and cap your conviction.
Beyond that, several frameworks and ideas are helpful for someone stuck in the limbo of would-be-founders. Some come from my experience, while others have been gleaned from other entrepreneurs, typically those pursuing a venture-backed path. I hope they help because the world needs more founders, and I bet you’re more than capable of building something you’d be proud to have your name on. On to the advice:
Talk it over. I found it really helpful to talk about going full-time on The Generalist with friends, family, and old mentors. What I was looking for in these conversations was a kind of permission. Was it ok for me to go and do this thing? Was I being reckless or deluded? Would I be ruining my career? Ultimately, you need to make these assessments yourself, but it can help to know that people whose opinion you trust see the virtues in striking out on your own. A word of warning: you have to choose your advisors wisely! And make sure you’re willing to filter out advice you don’t agree with.
Find other founders. Spend time with other founders. It can be extremely difficult to visualize what starting a business looks like if you’ve never seen it before, especially in the early stages. Hang out with people just a few steps ahead of you, use the time to learn from them, and normalize the risk of going solo. To a certain extent, we adjust our ambition and risk tolerance to meet the average of those we spend time with. There are exceptions, but the pull for social acceptance is extremely strong. If all of your friends are management consultants, there’s a good chance you’ll lower your risk tolerance to fit in. If all your friends are founders, there’s every chance you’ll raise it.
Assess your market value. In a previous Generalist piece, we wrote about a study on entrepreneurship showing that founders tended to be people who felt the market insufficiently valued their abilities. Absent an employer recognizing their worth, these people make a rational choice and employ themselves. I like this framework because it’s incredibly pragmatic. It sounds like you’re probably employed at the moment, J. Do you feel your current job is a fair representation of your market value? Do you think there’s an alternative job that would be? It may be that to capitalize on your true value, you must build the opportunity for yourself.
What’s the downside? It’s easy to catastrophize the worst-case scenarios of building a company – to imagine the professional damage, humiliation, and financial cost a failed startup could incur. But how realistic are these worries really? When you soberly appraise the risk involved, it’s often less severe than you imagined. Would your career really be ruined by a year spent trying to get a company off the ground? Companies often prefer to hire someone with entrepreneurial experience, particularly in the tech world. You might find your prospects buoyed rather than scuppered. Would failure really be socially humiliating? Some might laugh, but not anyone who has built something. Many may admire your ambition. Would an unsuccessful business irremediably damage your finances? This, I cannot answer. If you have some financial latitude (and don’t invest beyond your means into your business), a year’s salary loss may sting but is more than recoverable. If you don’t, accelerator programs like Entrepreneur First and Antler provide stipends for pre-idea founders, allowing you to defray your outgoings from day one.