Making a Difference

What motivates entrepreneurs to pursue building high-potential companies? Making money? Independence? Making a difference? The answer might surprise you.

Reflecting on potential motivations for building a high-potential startup reveals that some reasons are more durable and sustaining than others when considering commonly cited possibilities.

Possible Startup Founder Motivation #1: Build Extraordinary Wealth Quickly

Our media culture celebrates the wild success of some entrepreneurial businesses. There is endless lauding of self-made billionaires.

Yet, when you examine the statistics, creating a multi-billion dollar valuation for a privately-held company that translates into a multi-billion dollar exit is an incredibly rare event. It is so rare, in fact, that we call such companies unicorns.

The first unicorns were founded in the 1990s. When Aileen Lee coined the term unicorn, she estimated that only 0.07% of software startups founded in the 2000s ever reached a billion-dollar valuation. And while unicorns have become relatively more common over the past decade, they are still incredibly rare.

My point is that if you anticipate that you can start a business and build it to a multi-billion dollar exit to turn yourself into a self-made billionaire, the odds are massively stacked against you. Of course, you can make a lot less than $1B and still secure life-transforming wealth from a successful startup. However, with startup failure statistics of greater than 90%, the odds are still stacked against your success.

The reality is that there are easier and more reliable ways for someone talented enough to found a high-potential startup to make an attractive income, so if making wealth is your primary goal in founding a startup, make sure you evaluate the risks involved. In addition, building a startup is incredibly hard work with many hard-to-overcome risks, so just remember there are easier ways.

Possible Startup Founder Motivation #2: Be Independent

Some people imagine that founding a high-potential startup means you get to “be your own boss.”  This sounds highly appealing when dealing with annoying requests from an actual boss. It becomes easy to imagine how nice it would be not to have to do the things you would prefer not to do in your job.

It is easy to fantasize that if you found your own high-potential startup business, you will get to be your own boss and have complete control. However, the point that many miss is that a startup founder/executive leader has many groups to serve.

Because the growth and scale of high-potential businesses demand teams, scale, and funding, the founder/startup CEO quickly learns that once you introduce a team, customers, suppliers, investors, and the many other groups that must be pulled together, you end up responding to many different needs without nearly the control you thought you might have. In some ways, it can feel like you have even less freedom, control, and balance than a job with only a single boss who sometimes goes to sleep.

One of the significant challenges of leading a startup is continually solving the multivariate equation of prioritizing the different needs and figuring out how to accomplish all that needs to be done. In more than twenty years of leading startups, I rarely felt that sense of power and control that others always seemed to think I had when they learned my title was CEO.

So, if your motivation is to be independent, perhaps consider becoming a sole proprietor without all the demands of constituents of a high-potential startup to meet.

Possible Startup Founder Motivation #3: Make a Difference in the World

The motivation I have always found most durable and applicable to founding and building a high-potential startup is discovering a passion for solving the hard problem you need to form and build a startup to address. That powerful sense of purpose can motivate you to get out of bed in the morning and tackle the next set of problems to achieve your goal.

Many startup founders have a powerful and often personal story for why they felt compelled to tackle all the work of building a startup to solve a problem they are personally and deeply invested in. This is one of the reasons that professional investors will often start an initial exploratory conversation with a question about why the founder started this business in the first place. They are seeking to understand the strength of the motivation underlying the formation of the business because they know that a powerful passion can go a long way towards keeping a founding leader engaged in surmounting hurdles during the slog of building a business.

The opportunity to make a difference in the world by solving a problem that is personally important to the founder as well as many others who suffer from the same unmet need provides the deep and continuing motivation required. When considering founding, remember that your chances of success increase when you care about generously making a difference in the world because that passion you feel can often attract others to participate as well.

When you focus on making a significant and powerful contribution to the world, you can find great satisfaction at each step of the way. Every step towards creating and refining a product that delights a customer feels like a victory. Along the way, you may very well find that you experience joy serving all those who join you in the journey (connectivity over independence?) and may even be successful in building wealth as an outcome. However, those last two consequences tend to flow from the contribution-oriented difference-making rather than being ends unto themselves.