319: Why entrepreneurship culture is terrible

I saw some stuff circling the internet lately that made me want to rant. I’ve been trying to be more positive, avoid negative energy, and not complain about people on the internet, but I’m really frustrated by how I see entrepreneurship covered in the world. All I see in entrepreneurship culture and the media surrounding it are tech startups, new ideas, and moonshot influencers, which is so different than how most entrepreneurs succeed.

I think that all you need to do to start a business, I won’t even call it a startup, is to get out there, sell somebody something, and do some work for some people. Look up from your computer screen, there are too many people trying to make money on the internet and afraid to go outside and find customers right in their city. Your biggest moat should be your geography–there may be great operators out there, but if they can’t service people in your town then you can. One company on the internet can dominate the global market, but if you provide local work to local customers, you’re competing against a much smaller pool.

Service-based businesses offer the best risk-adjusted return in my eyes. People see entrepreneurship as a series of moonshots that can lead to huge success like Elon Musk, Steve Jobs, and Jeff Bezos, but we don’t hear nearly as much about the 99.99% that fail. The returns in a sexy, innovative tech startup can be great, but the risk is huge and the odds of success are low. You can make serious money, money that buys you freedom for you and your family, but finding an existing market where you can carve out a small piece of the pie, and the risk is much lower.

Most entrepreneurs over-innovate. I’ve sat on judge panels for pitch competitions at the University of Georgia, and I end those days wanting to stand up and scream “Simplify!” at anybody who will listen. Look at existing businesses, and find a small way to innovate. When we launched Storage Squad, there was a company at Cornell doing the exact same thing that made $600K/year in revenue. We looked at how they conducted business and some of their inefficient and outdated operations processes, and we knew that if we did a couple of things differently we could carve out our piece of the pie. We faced competing companies in every market we operated in, and all we did was make small, incremental improvements that helped us grow into a multi-million dollar exit.

The sexier, the more fun, and the more passion-driven your business is, the more saturated your market will be with cheap competition. If you do the sweaty, un-sexy things, there will be less competition. Don’t compete against hobbyists who are happy to just cover their expenses while working around the clock on something they love. After 6 months of growing a business, any business, you’ll be focused on the same tasks: selling, hiring, training, solving problems, and building processes. It doesn’t matter if your business is photography or lawn mowing, that will be your focus day to day, but it’s a lot easier to get there mowing lawns.

The way entrepreneurship is portrayed in the media should be thought about in a different way. Most entrepreneurs that do well didn’t do anything new, they just did the same thing better. They started small against weak competition with low risk, and eventually they took a step forward. At Storage Squad we went from moving boxes to hiring people to move boxes, from just one city to half a dozen, and we were able to grow and generate real wealth in doing so. Very few entrepreneurs start with no experience, and no operational chops, and manage to launch the next big unicorn.

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About Me

I started the Sweaty Startup in December of 2018 because I believe the Shark Tank and Tech Crunch culture is ruining the real spirit of low-risk entrepreneurship.