I had dinner with a friend last night who was lamenting about his recently failed startup. He had put his heart and soul into his company for over two years. He borrowed money from friends and family, maxed out credit cards, and did everything he could, but the market just didn’t respond to his idea. He had a cool product, but it just wasn’t addressing a problem.
My friend was trying to figure out what to do next. He could go work at a big company, go back to school, or…there was this one other option. An early stage startup he knew and respected asked him to join their team. It was clear from his description of the idea that this was definitely the opportunity he was most excited about, but he was nervous about taking the leap. He was worried that if he goes to another startup and it doesn’t work out, he’ll be pigeonholed in the business community as someone just waiting for his next startup to come along and won’t be able to find a “real” job. He was worried of what his friends and family would think about him going to another highly speculative startup. “I’m just nervous they’re going to think I have the equivalent of a gambling problem or something.”
I think he’s right to be nervous about the perception. Being an entrepreneur is often seen as a risky vocation, not much different than deciding to be a professional poker player. In most conversations if you tell someone you are an entrepreneur, they hear unemployed, just like if you told them you played poker for a living.
But I like to think of the similarity between professional poker play and entrepreneurship in a positive light. Poker players know they aren’t going to win every hand or every tournament. It’s a statistical impossibility. They know they are going to lose money some days. The trick is to minimize your losses. Learn from them. And live to fight another day. The only factor that determines whether or not you are a professional poker player is if you can afford to keep playing at the professional level, meaning that you have to win more money than you lose.
I told my friend that he has to have a similar mentality to his entrepreneurial endeavors. It’s clear that he’s drawn to start up companies. He wants to create things that have never existed. He wants to change lives. He wants to solve problems. There are few other professions that can offer the same level of risk and reward that he covets.
But sometimes startups fail. Sometimes the ideas are bad. Sometimes the execution is poor. At some point in their run, virtually every single successful entrepreneur has encountered failure. Some of them lost hundreds of thousands of dollars. Some of them lost millions. But it’s not the individual setbacks that determine whether you should continue your path to being an entrepreneur. It’s whether you can learn from your mistakes and afford to keep playing. If you are passionate about startups and you have the ante, then don’t let a bad hand chase you out of the game.