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Why start a company?

Posted by James King at 1:00 29/08/09

In the last post I provided a link to an article that asks the question “Should I start a company or do an MBA?” [sic] and we highlighted the common sense response from Paul Walsh –
“The fact you’re asking the question leads me to believe that you haven’t recognised a real problem that people need resolved and you have the answer. So, in short, study for an MBA whilst you continue to earn money in full time employment.”

I want to elaborate on that in this article.

At FIG we always ask the FIG Seeds why they started/ why they want to start their business. We hear two responses frequently at FIG that set off alarm bells…

“I wanted to start my own company”

and

“I don’t want to work for anyone else”

If these are your drivers for starting a new venture – STOP. STOP RIGHT NOW.

Go back to uni, get a new qualification, go get a job, build your experience, I implore you, please don’t start a company “because you want to”.

If you are doing that then you haven’t seen a problem. You will end up creating a solution then looking for a problem.

First lets deal with “I wanted to start my own company”;

I’m a firm believer that the accidental entrepreneur is the best entrepreneur. The people who set out to start their own business will find it harder to create a product or service people want and as a result will struggle to make their venture a success.

We love hearing “I was struggling with X* and set about trying to make X easier. So I created/ want to create something** that does Y to make X easier”.

*or I saw that people were struggling with X
**the reason we highlighted ‘something’ is – a company can start with an idea, the idea doesn’t have to involve creating a company

We also love hearing “I was doing/ making Z and friends, colleagues and strangers were impressed and asked me if I would recreate Z for them if they paid”.

Please note that you may want to start your own company AND have a good idea and wanting to start a company is not a bad thing! I am just suggesting that it is a poor solo driving force or reason for starting a venture.

If you really want to start your own company and that is your only driving force, I would suggest you buy a franchise – you can find a list of franchises here;
www.franchisebrief.com

Right, now on to the worst response possible - “I don’t want to work for anyone else”;

If anyone says that to me, my immediate response is “Why?” and my immediate thoughts are “Is this person awkward to work with? Don’t they enjoy working with people? Don’t people enjoy working with them? Don’t they take criticism well? Are they a control freak? Do they have any idea how difficult it is taking responsibility for everything? Do they have a lifestyle that no one else can accommodate? Can they not communicate their needs and wants to others? Have they even tried working for someone else? Would they not even consider having a partner? If they had a partner would there be problems? Are they arrogant?”.

Rather than labour the point, I will simply say that if your main driver is to not to work for anyone else, you should have a VERY good reason for not wanting to work for anyone else! Especially if you want to speak to investors.

“I never perfected an invention that I did not think about in terms of the service it might give others... I find out what the world needs, then I proceed to invent”
- Thomas Edison, inventor and scientist
 

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