Knowing your true motivation for starting a business could make the difference between success and failure.
Imagine this: A top venture capitalist is considering funding your startup. He or she invites you out to drinks and asks you this question: “Why are you starting this business? Do you want money, fame, or to change the world?”
There are, in fact, real-life investors who ask this question of every entrepreneur who comes through their doors. And there is only one right answer: to change the world.
Many business experts–academics, investors, long-time practitioners–will tell you that entrepreneurs motivated solely by money or public acclaim usually don’t end up succeeding.
Setting yourself up for disappointment and failure
Why? For one thing, the chances of financial success for any entrepreneur are relatively low. The typical business owner actually earns 35 percent less over ten years than he or she would have earned working for someone else.
Entrepreneurs motivated by money will likely become discouraged and give up, or they’ll keep going but be miserable. If you’re smart, hardworking, and ambitious, there are far easier ways to fill your bank account than to start a business.
Entrepreneurs seeking status and acclaim don’t fare much better. When Nancy Gross worked in Stanford Business School’s Center for Entrepreneurial Studies, she saw all kinds of aspiring entrepreneurs come through her office. She claims it was easy to recognize the students who were drawn to the glitz of entrepreneurship but had no idea what they were signing up for.
“They wanted to be fed. They wanted someone else to give them all the answers,” Nancy told me. “Sometimes they wouldn’t even bring a pen and paper when they came in.” It was obvious to her that such entrepreneurs would never make it.
Self-centered decision-making has real consequences
Another reason why money- or status-driven entrepreneurs don’t do well is that they tend to make decisions that are bad for the business in the long run–though perhaps good for their own ego, image, or bank account in the short term.
I’ve seen more than one entrepreneur fall into the trap of holding onto their power or position for far longer than they should. Even when it would best serve the business and its customers, such founders don’t want to step aside as executives or give up any control over the company’s operations. Eventually, their self-centered decision-making drives away partners and employees, and might even destroy the company they were so desperate to build.
A desire to create something meaningful leads to perseverance
As Guy Kawasaki wrote in The Art of the Start, “The best reason to start an organization is to make meaning–to create a product or service that makes the world a better place.”
Long-time investors will tell you that entrepreneurs who want to change the world are the ones who will persevere through the great challenges of building a large company. They will be willing to give and sacrifice and risk as much as is necessary because they believe so much in what they are doing.
It’s best to just be honest
While I think any of us would be willing to say the words “I want to change the world” to someone who’s about to write us a huge check, the sentiment is not something you can easily fake.
Remember the drinks I mentioned in the opening scenario? It’s in the investor’s best interest to get you relaxed and comfortable, so he or she can find out what really makes you as an entrepreneur tick. Even if an entrepreneur is able to bluff through an interview, the truth will emerge soon enough–in the decisions he makes, her interactions with people, the way he leads.
So it’s important to ask yourself this question:
Why are you starting this business–for money, fame, or to change the world?
If your honest answer is money or fame, there’s no shame in that. Entrepreneurship, though, may not be the best path for you to get there.
If you truly want to change the world, then you’re in the right line of work. Just get ready for a wild ride.