Startup Lessons: Entrepreneur or Working Poor?

I left this post in draft form after reading a story on Huffington Post that decreed that entrepreneurship was the cure for global poverty.  A key excerpt from the post:

All around the world, and in the countries and provinces and neighborhoods held captive by some of the most entrenched and toughest to battle poverty, women and men turn to business to feed their families. These range from banana and potato chip companies in Liberia to logistics companies in Afghanistan and food markets in Pakistan. In the process many are doing much more than surviving. They are transforming subsistence into consistent income and nourishing their families and educating their children, cousins, nieces and nephews on their earnings.

The writer, author Gayle Tzemach Lemmon, isn’t alone in her point of view.  The Clinton State Department made entrepreneur education a centerpiece of its foreign policy and Secretary Kerry, who for many years had Congressional oversight of the Small Business Administration, is likely to stay the course.

And it’s good policy. Wealthy, content nations do far less saber rattling than impoverished ones. As Lemmon writes: “The payoffs, in the form of less poverty, more jobs and greater growth, will benefit us all.”

Still, I shelved this post, at right about the point I read Lemmon’s direction to “file ‘entrepreneurship’ in the category of what works when it comes to the poor lifting themselves out of poverty.”

It’s not that I don’t, in broad strokes, agree with the assertion.  But on that particular day, I had reached for the bootstraps and they were just about worn through.  I wasn’t alone.  Since the year-end holidays, I had talked to dozens of entrepreneurs – many of them deeply experienced – who had come to the end of the runway, not just for the business, but for themselves personally, as well.   They were giving up offices, selling cars, moving in with friends, taking consulting work, or short, doing whatever they could to keep the lights on and the dream alive.

So when I read that line in Lemmon’s post, I muttered under my breath, ”

File entrepreneurship in the category of what works when it comes to dropping oneself into poverty.”

There is a fine line, I thought, between entrepreneur and the working poor.

That’s when I wrote the headline for this post and filed it in the draft folder for another day.

That other day came today when I ready Tommy Walker’s raw blog post warning “entrepreneurs”  (his quotes, not mine) about the dangers of self-deception.   The opening line of his post:

There is a fine line between being self-employed and unemployed.

I’m never met Walker, but clearly we think in parallel streams, at least on this issue.   He calls it the “duality” of living a public life of the successful entrepreneur (a “fictional personality”) while masking private traumas (“you can’t pay your bills”).  Walker tells a cautionary tale of a social media personality who takes his own life, presumably because the stress of his duality became too great.  It is a sad story, and Walker is right to implore these “online entrepreneurs” to get help.

There is another facet to the story, though, and I suspect it may speak to the causation of the sad outcomes Walker writes about.

With every good intention, our culture celebrates entrepreneurship and entrepreneurs.  Indeed, entrepreneurs were the super heroes that would rescue our slumped economy, just as entrepreneurs would, according to Lemmon’s story, empower the emerging nations of Africa.  In this country, we heralded the launch of Startup America Partnership  and went ga-ga over headlines that encouraged college students to drop out and tune in to startup land. Forget medical schools and law degrees; entrepreneurship has become the aspirational career.

And one so easy to attain. In the wonderful, storied world of entrepreneurship, no degree or certification, residency or clerking required.  All you need is a copy of The Lean Startup, and any seemingly reasonable idea, and you can declare yourself an entrepreneur.  If your lucky, that idea gets validated by an angel who writes a check that barely keeps you in ramen noodles, but that’s okay because you’re earning sweat equity.  Okay, that is, until you realize your creditors don’t accept sweat equity as payment on the tab you’ve been running to support your Entrepreneur Lifestyle.

It’s not long after that you realize that there is more fake it than make it to the startup life.  You start to get that funny feeling that the ballyhooed low barrier to entry means everyone is doing it, and if anyone can be an entrepreneur, just how super a hero can you be? And just about then your car blows up and you don’t have the money to repair it and you soon stop answering calls from unknown numbers because it’s probably that perfectly charming but definitely stress-inducing woman from the credit card company.

Still, you get up every morning and go to work, building your dream company, until one day you realize:  I’m working way too hard to be this poor.  You start to look at the panhandler with a little envy, realizing that he makes more at rush hour than you’ve made all last quarter.  You feel good about yourself because you are, after all, an entrepreneur and he’s just a bum, even if his life and yours look a lot a like these days.

The point is, building a business is hard, and being and entrepreneur is more than filing incorporation papers and jumping on free wifi and pounding out your MVP.  Entrepreneurship is not a lifestyle. Entrepreneurship is a practice every bit as challenging as medicine or law.  And just as one can’t put on scrubs and call himself a surgeon, one isn’t truly an entrepreneur without following a disciplined practice of company building.

Anything less is the path to the poverty that real entrepreneurship is supposed to lead us from.



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3 thoughts on “Startup Lessons: Entrepreneur or Working Poor?

  1. James Brinton says:

    Truer words were never spoken.

  2. Very well said, Chris.

    It is always a shock to pull back the curtain and realize that the so called “meritocracy” in Silicon Valley (and I don’t mean the location, but rather the idea) is simply a myth. Not unlike the American Dream, itself; an economy of who you know rather then what you know.

    There are always exceptions to the rule, but knowing how truly hard it is to build a company from an idea is a good thing. And much harder when you don’t come from money. Know it going in, or leave it to the brave or even the deluded. It’s not unlike the children of celebrities in Hollywood, who have have access, and power. It’s a family business.

    I’m not saying there is a better model in the world or even my field. I love my country, and her dream. But, knowing its a construct helps one deal with reality – and that is a competitive advantage.

  3. What a beautifully written article, and I appreciate being cited.

    It’s funny, because as I’ve read through this, and re-read my own article, I’ve come to realize that there are so many people out there, who don’t understand what it means to really run a business.

    By run a business too, I don’t mean just being able to sell a service. That’s step 1. Step 2 is making that repeatable, and step 3 is to set up a reliable foundation to make that process repeatable.

    When I wrote that article originally, even though I hadn’t realized it then, I fell into that category.

    The problem is, as you make really clear throughout, is that it takes so much more than an internet connection and a copy of the lean startup to really make it work. The huge disservice that’s been done is that we don’t, as a community, emphasize that enough, and that leads to all sorts of undue stress that could be easily avoided.

    Thank you so much for writing this, and I hope this is a conversation that echoes far and wide.

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