Be Careful What You Wish For

So you want to do a startup!

Sure sounds like fun doesn’t it?  Starting and ending your day devouring the latest articles on Hacker News. Posting questions and answers on Quora.  Working the party circuit at SXSW. Snarfing pizza with your fellow Y-combinator founders.  Dashing off clever twitter exchanges with Dave McClure, Chris Dixon,  Mark Suster and the rest of the Entreprenati.

Well I hate to be the one to break it to you, but ultimately, you have to actually build the  company you’ve spent all that time pitching.  That’s not quite as easy.  Nor as sexy.

There’s a lot of talk these days about whether the start-up world is in the midst of a financial bubble, but not enough discussion about whether we’ve over-glorified what it really means to be an entrepreneur.

With TechCrunch breathlessly reporting every seed round raised, not to mention glowingly reporting on every Pitch contest, Hack-a-thon and Startup Bus, it’s easy to think that the entire process of being an entrepreneur is coming up with a clever idea and raising a little money.

The pitch deck starts to become the product being sold, with little thought to the reality of what might be involved in actually making the concept become the reality.

And now that “social proof” has becomes its own investment premise, it easy to be a “famous” entrepreneur based entirely on how confidently and quickly you were able to raise money.

But in fact, as any real founder knows, it’s only once that first round is in the bank, after your popped your TechCrunch cherry, and once you’ve moved out of your basement into a real office that the immensity of the task you’ve bitten off becomes real.

Your next round will have very little to do with how charismatic you are and how many twitter followers you have.  Your seed investors may have been enamored by your vision, but your series A funders are going to be much more interested in more basic concepts.  Like Traction.  Customers.  Revenues.  Profitability.

As true entrepreneurs find out, building an enduring reputation comes from building an actual company.  Which in many cases requires an entirely separate skill set from the skills required to launch one.

If you don’t have a true passion for your product, and the ability to bounce back from countless setbacks, it’s going to be a long hard slog.  Ben Horowitz has a phenomenal blog post where he so accurately describes the loneliness of the entrepreneur, memorably saying that if you’re not comfortable having to frequently choose between “horrible and cataclysmic” you may not be cut out to be a CEO.

Perhaps not so eloquently, I once described our first years at Netflix to someone as “four years of pissing blood”.

The moment I first felt like a real entrepreneur was not the day I deposited my seed round checks.  It was a day about nine months later, with subscriber numbers basically flat, when I looked down from our conference room window onto the parking lot and thought “Oh my god, I’m responsible for all those car payments”.

But don’t let me scare you.  It’s still worth every minute of it.  Just know what you’re getting in to.  And be careful what you wish for.

This might be a little too abstract a reference, but there’s a wonderful moment at the end of The Candidate, where senator-elect McKay (played by Robert Redford), after having betrayed every one of his beliefs to finally win the election, pulls his campaign manager aside and ask “what do we do now?”

Like many politicians, McKay ultimately confused what it took to win office with the real responsibilities of governing.

For your part, don’t confuse the act of starting a company, with the real responsibilities of actually growing it.

About Marc Randolph

Marc Randolph is a veteran Silicon Valley entrepreneur, high tech executive, and start-up consultant. Most recently Marc was co-founder of Netflix. Follow him on Twitter: @mbrandolph
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4 Responses to Be Careful What You Wish For

  1. Pingback: Jeff McNeill – เจฟ แม็คนีล » links for 2011-05-03

  2. Cary Somogyi says:

    Hi there, I found your page from stumbleupon. This isn’t not something I would normally read, but I loved your thoughts on it. Thanks for making something worth reading!

  3. Sriram says:

    Great article. I have been dabbling at the thought of starting something….don’t know what…. I have been working for a high-technology company in the sales role (have engg. background) and led the growth of this firm significantly. Now, I want to do my own gig… just don’t know what it is! Any suggestions on how to go about it? I know I am asking a vague question… but that is where I am at right now… I have done well for the firm in the technical sales role (Youngest Dir. of the firm now) but can’t think of how to start a company! How did you think of Netflix? When did you know, yes, this is something I really want to do? Your advise is greatly appreciated.

  4. Ah, Marc, finally some wisdom, and from someone who has actually built a great company. Thank you for this.
    Whether there is a bubble in start-up valuations or not, I am not qualified to say (Steve Blank and Ben Horowitz debated this in the Economist But I am certain that we are in the midst of a bubble in entrepreneurship. At every social gathering, at least one person introduces themselves as an ‘entrepreneur at heart’ or someone ‘in love with innovation’ or even presents a business card with only the title “Entrepreneur” (tagline: “Let’s build something!”). Since many VC’s believe that entrepreneurs ‘peak at age 25’, courses in entrepreneurship have been pushed into colleges, high schools, and even elementary schools and summer camps. If you are in an undergraduate engineering discipline at college and not planning your own start-up, you are the exception, not the rule. The frenzy to self-declare oneself an entrepreneur has led to a devaluation in the title of “founder,” an inflation in expectations for quick success, and a hollowing out of true innovation. We all wait breathlessly for the company with one of the world’s largest market caps to tell us what’s next. Where are the ninja start-ups nipping at Apple’s heels, innovating faster than that behemoth can? Are we all doomed to make apps to feed the Apple ecosystem? As you point out, it’s time to de-emphasize pitching and funding and concentrate on customer and market development.
    Seth Cohen
    Co-founder, CEO, Screenius

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