Why dont more people start companies?

traderpimp111's picture
Rank: Monkey | banana points 48

Andy note: Best of WSO - this post originally went up October 2009 and we thought it deserved to go back on the homepage for those who may have never seen it.

Hey guys, so I have a simple yet important question: why is it that so few students from elite schools start their own companies right after graduation?

The richest kids at my Ivy school have parents who own their own companies. It seems like most people with a net worth greater than 10 mil own companies (is this accurate?)

So, then, why is it that the best and brightest students choose to become employees? A shockingly low percentage of HBS grads start companies at graduation, and even fewer do from undergrad schools like Wharton.

Please tell me guys, what am I missing? why is everyone so obsessed with even getting a job to begin with. Am I wrong that business owners make the most money? is it herd mentality? Is it pure risk aversion? Is it that everyone actually thinks doing 100 hours/week of powerpoint may help then start something later on in life?

Why make a million/year at Goldman Sachs when you can make exponentially more money doing something as stupid as running a garbage company????

Comments (49)

Oct 20, 2009

There actually are more than you think, but they're are definitely out weighed by kids going into banking. Banking is somewhat of the "next step" after an Ivy or whatever, prestigious, (used to) make a ton of money, (used to) secure, and for some kids the comfortable choice. Starting a business is sketchy; you have to find someone as crazy as you & basically lay it all on the line with a HUGE chance of failing, even with venture backing and a EE degree from Princeton. While your banker friends from school are enjoying their models and bottles your stoked on the care package your mom sent while your trying to re-write 700+ lines of back-end code that isn't interacting with your user interface.

Oct 20, 2009

Its just the risk-reward trade off. Just look at how many start ups fail. The odds are severely stacked against you.

Oct 20, 2009

Schools are employee factories. They are self-perpetuating institutions that sell kids on the idea that the more education you have the better job you will get, and then go get an advanced degree for an even better job, etc...

If you notice most of the innovators of the last two decades, the ones who've had the most significant impact on our daily lives, are all creative people who divorced themselves from the education system. Here is a fantastic (and quite hilarious) video from TED explaining the phenomenon:

School is pretty heavy on indoctrination and pushes the 40-40-40 plan (work 40 hours a week for 40 years so you can retire on 40% of what you already can't afford to live on). Obviously, the numbers are skewed higher in banking, something along the lines of a 110-40-50 plan, but the concept is the same.

    • 1
Oct 20, 2009

School very much skews people into the "employee" mindset. It was actually quite difficult to break out of that myself last year when I was getting started with my own ventures, since I had followed the typical elite institution --> banking path my entire life.

I think the other thing that stops a lot of people is that starting a company sounds "romantic" but in practice the actual work is not fun.

Sure, everyone wants to be the next Larry and Sergei - but when push comes to shove, are you going to work your ass off for years with the possibility of getting no financial return from it?

Even if you're not trying to be the next Google, there's still a lot of upfront work and you won't see much upside for a long time.

People at top schools are conditioned into the "immediate reward" mindset, which is why they skew more heavily toward finance.

The "risk" (both financial and opportunity cost) of starting a company is actually much lower today than it has been in the past, but it is still a less certain option than following "The Track."

Oct 20, 2009

All the points are true and valid; however the US needs more smart & motivated entrepreneurs.

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Oct 20, 2009

i'd really love to hear a bit more from dosk regarding what he's learned in diverging from the so-called "track." what do you need in order to make that jump, and make it work? any lessons learned that would have been helpful in hindsight?

Best Response
Oct 20, 2009

what i hear most as an excuse is "i don't have a good idea." what I always tell people in response is that being a successful entrepreneur is less about the idea and more about the execution. Ideas are everywhere, but few are the next Google...that does not mean you need to be the next Google.

I started this site 3-4 years ago and it was small, brought in minimal cash and I spent 100s of hours trying to make it better, struggling with web development, marketing and a whole host of other issues i had no experience with -- many people thought I was stupid / crazy and/or didnt get it. The way I explained it -- if I was willing to work 100s of hours for someone else, why wouldnt I work 100s of hours for myself for the chance at never having a boss again?

If you are motivated and relatively smart you can take a pretty mundane / simple idea (iBanking discussion board) and turn it into a nice small "lifestyle" business. Now I plan to run WSO full time when 3 years ago that would have been laughable. The key is you have to be willing to work your ass off. Look at what Dosk did with Mergers & Inquisitions...when he first launched his blog, he was on here giving great detailed advice to anyone that wanted it -- as a result his blog got more traffic, his reputation was built and he was able to build ancillary businesses off of that success.

i have seen countless other iBanking communities / blogs that eventually die out -- i don't think that it because their ideas are any worse/better. I just think Dosk outworked all of them (and was relatively early like WSO) = execution.

-Patrick

    • 3
Oct 20, 2009

How do banks and HF feel about you running a side business while employed? I know my contract stipulates I cannot, but how firm is that? Do they really care or is that just there so your not making calls for your business at your desk.

Oct 20, 2009
UBmonkey:

How do banks and HF feel about you running a side business while employed? I know my contract stipulates I cannot, but how firm is that? Do they really care or is that just there so your not making calls for your business at your desk.

Ultimately, you have to ask yourself whose team you're playing for. If you are playing for their team, then the answer is simple - you do nothing but work for them.

If, however, you're playing for your team, the answer is the opposite but just as simple. You do whatever you have to do to earn your release from indenture.

At the end of the day (thought I'd work one of those annoying buzzwords in), would the company go to bat for you if the chips were down? A few bad trades made way over your head that you had nothing to do with and you're pounding the pavement looking for another job.

Your primary loyalty has to be to yourself and your family.

Oct 20, 2009

Very interesting topic of discussion. Patrick makes a very valid point regarding the "lack of good idea." You don't need to start the next google, twitter, amazon, which is the trap many of us, including myself, fall into. As a VC analyst, I'm always thinking about the next "big" thing. In pitches its all about disruptive technology in a multi-billion dollar market with a clear exit strategy. The companies that fit into that description are the ones we all hear about, which seems to create a feeling that if you don't have the next big idea then your company will automatically fail.

We all have our over priced education, which tells us we should be working for some "prestigious" company/firm. For some reason our schools lead us to believe we are better than everyone -- we are better than students at xyz school, we are better than kids that never went to school, etc, etc. I'm sure all have friends who decided to go into the trades(plumber, electrician,etc) and I'm sure some of us made fun of them for not going college. The funny thing is that while the rest of us are getting owned at an ibank, pe shop, or accounting firm, if they become good at what they do and start their own company they will be the ones with the million dollar homes. Companies don't need to be a disruptive force or complicated at all...they just need to be good at what they do.

Oct 20, 2009

For me trading is like running my own business. I know that im getting paid for exactly what Im worth and there is no debating that since I control my P&L. What is unique about prop trading is the ability to really leverage your edge. Take an idea and prove that it works on a small scale and given the right liquidity you can really have something profound that you can make a lot of money doing. I have been trading since April and what used to be a good week is now a good morning, it swings both ways but if you have an edge that wont matter in the long run. Most people deep down I think are pretty risk averse and would rather have security.

From a young age I knew I wanted to run my own business but never really had that big idea till I started noticing repetitive patterns in markets. I kinda have to disagree that idea generation is over rated. I think one of the most important factors is surprise.... PASSION for what it is you do. Patrick loves this site and its clear.

As far as education goes I also agree that elite institutions are good at molding drones but it seems like the people that are REALLY driven to excel do so past a couple years in banking.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

Oct 20, 2009

WARNING: LONG POST (skip)

I have been wondering the same thing about why more students, especially from elite colleges do not try to go out there and make their own destiny. Yes I know that the failure rate is very high, but when is the last time you didnt learn something valuable from a failure?

I was lucky to attend Baruch College Zicklin School of business which left me with 0 debt and has a top 10 ranked entrepreneurship program. I know that if I had graduated with a ton of debt, paying it off with a high paying job in finance would be my first priority. Perhaps it is the lack of faculty or mentors that are entrepreneurs since most professors are either lifetime academics or worked in the corporate world.

One of my very good friends (he is 40, I am 24) ran a very successful business (sold it for 100m)always used to tell me that college just trains the guys the guys to work for him. And that includes his Harvard educated lawyers and the statisticians with PHD's crunching numbers for him.He has been a very big influence on me and the moment I got laid off from Morgan Stanley I was more than happy to start my life as a full time entrepreneur. I already had an online retail company I started during college and I went 100% full time with it and it was pretty successful(for a young college grad)

Im currently working on 2 very exciting ventures which I think will make a positive impact on our society, and even if they fail I will always continue to work on new ventures. I plan to apply for top MBA programs in the next year or 2 so I can expand my skills, network, and create a brand name for myself where it will be a lot easier than it is now to get funding and even respect as an entrepreneur. There are many HS dropouts that think they are becoming entrepreneurs by attending a Primerica meeting and paying $200 for a new member kit; I would like to distinguish myself from that crowd.

I wish more people started their own companies, I find that these people are always the most interesting to talk to as they have a wealth of experience, well traveled,and are very outgoing. I have friends working in corp finance/banking and all they ever talk about is their jobs and coworkers. For the most part their lives consist of spending their entire time at work and not having a life outside that. Dont get me wrong entrepreneurship is A LOT of work (7 days a week!!) but its flexible and scalable.

On a more senior level both traders and Ibankers are pretty entrepreneurial. One of my friends is a Sales Trading Director at a BB and I was surprised how entrepreneurial his job really is. Although I probably have a very slim chance, I'm definitely going to look into the VC field in grad school as it seems like a good fit for an entrepreneur.

Oct 20, 2009

Really think that this is a great post that I decided to create an account (finally after reading wallstreetoasis for a long time).

As I am nearing my 2nd year as a consultant, I'm in the process of creating my own venture soon. Would like to get people's experiences who have started their own startup:
1) Apart from hardwork, what does it really take to start an online business (do you need to learn how to program? Or at least understand how HTML/PHP work?)
2) Anyone knows entrepreneur-forums similar to wallstreetoasis?

Oct 20, 2009

greenapple - if you want to hear more, just email me - it would take way too long to explain on a message board but I'll give it a shot. :)

The short version is that what Patrick said is exactly right - it's 99% execution and 1% inspiration. This is why I never worry when people say, "Oh look at XYZ site or XYZ product they are competing with you!"

Competition is a GOOD thing - it means there's interest in the market. After that, it all comes down to execution.

I would say the key lessons I learned:

  1. Do not expect immediate results. I was running M&I for almost a year before it really began to take off. For months I barely made any money with it.
  2. It's more about consistent work vs. killing yourself all at once. This is in stark contrast to banking and school, where you're always working last-minute on projects.

I'd say the key things are to start small as Patrick and I did, keep costs down, and then test lots of different ideas to see what sticks.

This is actually the exact reason I launched my modeling program in the first place - I had no idea whether it would work, but I spent a few weeks creating the first videos for $0, got really good feedback, then expanded from there.

I think the other good point that Patrick raised is that it's not that difficult today to start a business that supports your lifestyle - yes, if you want to make $500 billion you will have to do a lot of work, but if you just want more flexibility, freedom, and ability to travel, that's very do-able.

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Oct 21, 2009

i think it is the lack of structure

being in an empty room of my "company" and being like, what next? its so flexible, no groups or divisions. its been a nightmare of mine, especially as i realize i might eventually branch off from my compnay.

Oct 21, 2009

Guys,

Edmundo is exactly right. I have a decent education with a decent gpa and got a decent job out of school. I had an opportunity at a boutique that would've been life changing, but when the large deal fell apart shortly after I started I found myself unemployed. I obviously lost out in that scenario, but the risk was well worth the reward and I'd do it again.

However, I have now crapped out of finance and am back to my accounting degree at a F500. My job is fine, the company is great, but I'm really pushing for that promotion to "Management". It sucks. It's widely acknowledged that I am more than capable, but its not that simple. There's a lot more to it, but the moral is you need to look out for yourself. You can be safe (I am extremely safe now), but there are tradeoffs to achieve that stability.

The question I have for those of you on the board are what are some of the ideas that are supposedly safe and easy? I'm not expecting anyone to give up their idea for the next google, but maybe share some succes stories that aren't internet based.

I am really looking to do something, however with my current situation I am forced to be fairly risk averse. I've got the time, intelligence, work ethic and financial savy to succeed at something outside of my day job....I just font know what yet.

twitter: @CorpFin_Guy

Oct 20, 2009

Patrick,

I agree with you about execution being important, but just what can you do without a good idea ? I think for people to force themselves to come up with something just for sake of being an entrepreneur is not the right way to go about it.

Also, how did an MBA help you with your venture ?

Oct 20, 2009
<span class=keyword_link><a href=//www.wallstreetoasis.com/company/sac-capital rel=nofollow>SAC</a></span>:

Patrick,

I agree with you about execution being important, but just what can you do without a good idea ? I think for people to force themselves to come up with something just for sake of being an entrepreneur is not the right way to go about it.

Also, how did an MBA help you with your venture ?

The MBA curriculum by itself hasn't been incredibly useful (although I've taken some interesting courses in entrepreneurship including a class right now called Monetization of Emerging Media) but the various entrepreneurial programs here and my classmates have helped me with WSO a lot.

for example, within the first few weeks of classes I sat down with a guy from my section who had a lot of internet start-up experience -- he helped me completely redesign the site and improve our SEO...experiences like this are what have been the most valuable to me. Also, while I think that we can continue to bootstrap WSO, if we continue to grow at the current pace there could be a time when I am looking for angel or VC money and I think having the contacts I've developed here at wharton will be very valuable.

In terms of "not having a good idea", I think there are a lot of mundane businesses (laundry mats, convenience stores, etc.) that if run efficiently are great businesses. What is important is that you enjoy the challenge of running your own business...the passion can come from simply breaking out on your own or from the specific industry you have decided to work in...but it really has to be there or you will give up too early. I'm not saying your idea can be crap and you can succeed, but it doesnt have to be something revolutionary. Do your homework, become an expert at something and then challenge yourself to compete in that space. if you are willing to work 100 hours in a cubicle each week, you'd be surprised how fast you can build a successful small business.

-Patrick

Oct 20, 2009

This is just my two cents, but no one ever said you had to innovate. What's wrong with taking an existing idea and just executing better?

For example, I've been a yachtsman for many many years. Several years ago,I happened to be living in an area with many yachts. The market was served by about 20 different yacht brokerages and the level of service was abysmal. Unfortunately for the local yacht owners, the bar had been set unbelievably low and all the current companies agreed that no one would even try to clear it.

I decided to start my own yacht brokerage, just to offer an alternative to the poor service. This was certainly not an original idea. Going into it, I decided to cater to the top 5% of the market, only the most expensive boats and only the most demanding owners. I serviced them to death. Run your boat aground in the middle of nowhere? I got the call. Divorce forcing a distress sale on a million dollar yacht? No one else was even considered.

Inside of 24 months, I owned the 3rd largest yacht services company in the state. And the two companies ahead of mine had each been in business for more than 25 years.

I say this not to brag but to illustrate the point that you are surrounded by lucrative ideas every day of your life. Just pick one and find a better way to execute. I came across a prime example today. I'm no computer programmer, but I can't imagine this was too difficult to put together. Today I installed a Firefox extension called lu.ly. It simply aggregates feeds from Twitter and Facebook and gives you a crawl on your browser. No more checking Twitter and Facebook. Total time saver. I've only had it for 6 hours and I'd be willing to pay probably $25 for it if they asked.

To use a cliche, there really is no need to re-invent the wheel. Just pick something you enjoy that someone else is already successfully executing and carve out a different niche of the same thing and execute better.

    • 3
Oct 24, 2009

Patrick.

Just wondering, but roughly what kind of lifestyle are you able to maintain from running WSO? For example, is it instant ramen and the occasional pork and beans for breakfast, lunch, and dinner or would you classify it as more middle, upper middle, or upper class?

Oct 20, 2009
guts:

Patrick.

Just wondering, but roughly what kind of lifestyle are you able to maintain from running WSO? For example, is it instant ramen and the occasional pork and beans for breakfast, lunch, and dinner or would you classify it as more middle, upper middle, or upper class?

well when i graduate this May i will probably be making significantly less than most of my classmates, but enough to live comfortably and enough to invest back in the business so that we can keep improving / growing. so while I don't mind the occasional cup or raman I will sometimes splurge on pork & beans.

Aug 31, 2012
WallStreetOasis.com:
guts:

Patrick.

Just wondering, but roughly what kind of lifestyle are you able to maintain from running WSO? For example, is it instant ramen and the occasional pork and beans for breakfast, lunch, and dinner or would you classify it as more middle, upper middle, or upper class?

well when i graduate this May i will probably be making significantly less than most of my classmates, but enough to live comfortably and enough to invest back in the business so that we can keep improving / growing. so while I don't mind the occasional cup or raman I will sometimes splurge on pork & beans.

Patrick,

How has this changed since 2009? This site has grown tremendously since then.

Oct 20, 2009

Owwwww my eye!! Seriously Edmundo a yacht brokering business?!?! Have you also scaled Mt. Everest and trained with samurai warriors on your time away from the African village you saved with your micro finance venture.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

Oct 20, 2009
trade4size:

Owwwww my eye!! Seriously Edmundo a yacht brokering business?!?! Have you also scaled Mt. Everest and trained with samurai warriors on your time away from the African village you saved with your micro finance venture.

I get the sarcasm from the other post now.

I've just lived a life dude. Something you might be able to do too if you trade a few things the right way. And if you know when to walk away.

Oct 24, 2009

Going to disagree with the common sentiment here.

I have been involved with a few start-ups, have been itching for the dream of running my own business, being my own boss, etc. However, I pursued the "big brand names" approach and am relatively happy with the choice.

Ultimately I believe you should make career decisions based on the "overall package" i.e. what would your life look like, not just your paycheck or your hours or the prestige. Entrepreneurship has a probability of long hours, fluctuating income, unforeseen (potentially large) capital expenses, a lot of unpredictable/unpleasant work and is largely a solitary experience (you against vendors, customers, partners, etc.)

It's great to talk about "being your own man" or whatever other bombastic verbiage you want to use but at the end of the day, there's a lot to be said to be able to walk into a nice office in the morning, have all your IT stuff working, have a good sense of what you are doing and will be learning, have the camaraderie of other people in a similar role to you, and be able to go home and leave your work stress at work.

From a longer-term perspective, a job is ultimately about supporting your other goals (not an end in itself); my preference is to minimize the volatility on basic things like salary/bonus, health insurance, career trajectory, skill set, etc. Yeah, there is a chance you can get laid off but compare that against a new business going out of business (with all your eggs in it).

At this point in my life, entrepreneurship comes dangerously close to pushing work from a means to an end, to an end in itself. Not as a commentary on those who posted above me, but one thing I've noticed about some who go into entrepreneurship - a big part of the decision is driven by ego. If you go through a thorough thought process and are doing it for the right reasons, more power to you.

    • 1
Oct 20, 2009

Edmundo,

You're right. There are many simple businesses that can be run more efficiently. I met a few entrepreneurs a while ago that run an online tutoring website and the model is fairly simple, its the execution that differentiates the firms offering the service.

Patrick,

As I suspected, the networking aspect of B-School proved to be pretty helpful to you.

Oct 20, 2009
<span class=keyword_link><a href=//www.wallstreetoasis.com/company/sac-capital rel=nofollow>SAC</a></span>:

Edmundo,

You're right. There are many simple businesses that can be run more efficiently. I met a few entrepreneurs a while ago that run an online tutoring website and the model is fairly simple, its the execution that differentiates the firms offering the service.

Patrick,

As I suspected, the networking aspect of B-School proved to be pretty helpful to you.

One of them wouldn't happen to be Mike and went to Princeton?

Oct 20, 2009
<span class=keyword_link><a href=//www.wallstreetoasis.com/company/sac-capital rel=nofollow>SAC</a></span>:

Edmundo,

You're right. There are many simple businesses that can be run more efficiently. I met a few entrepreneurs a while ago that run an online tutoring website and the model is fairly simple, its the execution that differentiates the firms offering the service.

Patrick,

As I suspected, the networking aspect of B-School proved to be pretty helpful to you.

One of them wouldn't happen to be Mike and went to Princeton?

Oct 20, 2009
Guest1655:
<span class=keyword_link><a href=//www.wallstreetoasis.com/company/sac-capital rel=nofollow>SAC</a></span>:

Edmundo,

You're right. There are many simple businesses that can be run more efficiently. I met a few entrepreneurs a while ago that run an online tutoring website and the model is fairly simple, its the execution that differentiates the firms offering the service.

Patrick,

As I suspected, the networking aspect of B-School proved to be pretty helpful to you.

One of them wouldn't happen to be Mike and went to Princeton?

Nope. This guy went to Wharton

Oct 20, 2009

BTW, I don't know if any of you watched Start Up Junkies, if you haven't, you should definitely check it out: http://www.hulu.com/start-up-junkies.
Its a great show following serial entrepreneur Ron Weiner and his newest start up called Earth Class Mail.

Oct 20, 2009

1) No interest in mountain climbing
2) I've had my ass kicked enough times to know not to fuck with samurais
3) My only exposure to African villages was when we threatened to burn one to the ground when they wouldn't quit fucking with the American embassy while I was in the Marines

Oct 25, 2009

What does elite schools have to do with anything? It seems many successful entrepreneurs are dropouts (in some cases high school dropouts).

Oct 20, 2009

My micro's a little rusty, but I believe so. Starts up aren't limited to the name brands we all know about, it was sample out of all the VC backed portfolio companies that they have on their data base and their founders respective backgrounds.

Oct 26, 2009

The data set is all biased. VC funds are looking for future $100 mm companies that can go public / be bought out. Some VCs, such as Khosla Ventures, are looking for highly disruptive companies. The fact that these companies even took VC money means they have significant startup costs that require institutional investors. The only thing that can be concluded from the data is that VC backed companies with management sans college degrees tend to have lower sales than VC backed companies with college-educated management.

Plenty of businesses that don't require a bachelors in comp sci. to start up become very successful. Restaurant chains, real estate companies, yacht brokerages, IT consultancies, check cashing, franchisers, etc. These are companies that will rarely ever ask for VC money but could easily get up to the $10 mm yearly revenue range. That won't impress a VC but $10 mm in sales to a small partnership is good money.

Plus there are some huge businesses built by college drop outs. Michael Dell dropped out of college at age 19 to pursue his business and now his business does $61 billion in sales. I doubt the one year of intro level classes he had in college made him that much smarter than the only high-school educated entrepreneur.

There's most likely an underlying factor between attending college and running a successful startup that makes there appear to be a causation. But in general, when it comes to running a startup, it's all about how good of a businessman you are; not what your pedigree is.

Oct 26, 2009

http://www.techcrunch.com/2009/10/24/got-degree-en... Cail (@fscktwitter) - October 24th, 2009 at 9:03 pm CDT
The thing that strikes me is:

"The success of these two groups markedly contrasted with startups established by tech founders with only a high school degree."

Now divide 2.2M by 18 (= 122K), 5.7M by 42 (= 136K) and 6.7M by 55 (= 122K) and you'll actually find out that CEOs without a higher degree get the same value per employee as ivy-league CEOs and only slightly less than average CEOs.

That's what counts, not the total return.

Go figure.

Oct 26, 2009

One of the issues I noticed with few of my friends running their own company is being able to scale it up. From my understanding, for 3 of them to make normal base salary for someone at their age, revenue has to go up a lot (and the market size is not there), and they'll lose much of the flexibility that works in their favor now (cheap labor, customization, etc.). Adding other functionalities is always an option, but that's not an easy thing to do, basically same as starting another business. Same can be applied to WSO and such. Are there really enough users in scope to make it a sustainable, raise a family type for next 20 years business? Of course exceptions apply.

Oct 26, 2009
brick:

Same can be applied to WSO and such. Are there really enough users in scope to make it a sustainable, raise a family type for next 20 years business?

Yeah, WSO probably has trouble scaling up with such a niche site. Most finance-aspiring people who would enjoy posting on a forum probably already know of WSO and the few that don't would cost too much to acquire through SEO/SEM.

But running a business is an iterative process and I see Patrick testing different products with GMAT prep, Wall St guides, etc. I'm sure through his efforts, WSO will evolve to gain more market share. And that's not like starting a new business on the side because a customer base is already set in. Additionally, each of WSO's products compliment each other and the incremental cost of selling Wall St guides as opposed to just running the forum is negligible.

Also, there are exit opps from running a business. Who knows, one of Patricks classmates might go work for a VC fund and recruit him to be the CEO of some Internet company. So all in all, I think Patrick will be doing well for himself for the next 20 years.

Oct 20, 2009

Is that "scaling up" is not necessarily the goal of every business.

This niche is way too small for either WSO or for my own sites to ever be "big" businesses. The same applies to all the financial modeling training companies - they may pretend to be big, but I'd be shocked if anyone had over a few million in revenue. I recall seeing somewhere for the DealMaven acquisition it around $5MM revenue or something in that range.

That said, if you're a 1-person operation or only have a few people, then you can create a pretty nice business that's relatively stress-free and gives you a lot of free time. That was actually my motivation in the first place - and it has definitely paid off.

Every business has a different goal: maybe you want to change the world, maybe you want to become the next Google, or maybe you just want to try an idea and see what happens.

Scaling any kind of niche business is difficult because, well, that's what "niche" means - it's not the iPhone with hundreds of millions potential customers.

Oct 20, 2009

thats really funny, because the guys I know run www.wyzant.com and their model is pretty awesome.

Oct 20, 2009
Guest1655:

thats really funny, because the guys I know run www.wyzant.com and their model is pretty awesome.

Well to clarify, the guys I met with have a different business model. Its more like http://www.tutorvista.com/, entirely online

Aug 31, 2012

I share the OP's thought process.

I think it's relevant to have 'some' experience during or after college before starting your business, for obvious reasons. It's up to the entrepreneur and his desired industry how much experience/knowledge is necessary to be successful, establish a network, raise funds, etc. It's not essential to start right after college, BUT at least have your strategy.

DELETED_ACCOUNT

Aug 31, 2012

(double post)

DELETED_ACCOUNT

Aug 31, 2012

all the wealthy guys I know that have their own business all started out in industry and then just set up their own shop in their mid thirties or so. They just saw an opportunity in their field set up their business and took advantage of it.

Starting straight out of college is very fkin risky/difficult, you have zero skills, zero network, zero capital and likely zero opportunity. This is for ex-tech start ups, there it is a bit different.

Aug 31, 2012
leveredarb:

all the wealthy guys I know that have their own business all started out in industry and then just set up their own shop in their mid thirties or so. They just saw an opportunity in their field set up their business and took advantage of it.

Starting straight out of college is very fkin risky/difficult, you have zero skills, zero network, zero capital and likely zero opportunity. This is for ex-tech start ups, there it is a bit different.

This.

People don't start businesses because they know it's hard as fuck. Harder than banking.

Aug 31, 2012

+1

Aug 31, 2012

I'm in the process of trying to start my own business. Here are some of the things I have noticed:

1) No direction, no deadlines, ie, no one tells you what to do.

2) Legal stuff: I have a food product, so i need to meet safety standards and figure out that kind of stuff.

3) You need to be a "jack of all trades" or find someone to help. I'm not very artistic so the website isn't very strong yet, also I have no programming experience which makes it hard. I'm not a good chef either so I'm still trying to perfect my product. I also have poor sales skills which i'm sure will be a problem when i try to market the stuff. My personality is a lot more suited to sitting in excel all day.

4) Up front opportunity cost and regular costs that i don't know if there will be a return on my investment.

  1. Also its hard to work harder and better than the competition if u arent truly passionate about your business.

Finally we hear primarily about the huge payoffs from the success stories and not the many people who dedicate their lives to something that are neer successful

Anyways good convo so far, hope i added something.

Aug 31, 2012
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Competition is a sin.

-John D. Rockefeller

Aug 31, 2012