Ten Reasons Young People Are Afraid to Start Their Own Business

Posted on February 26, 2006 by Dave Pollard
TheNaturalEnterpriseAs part of my research for my book The Natural Enterprise, I had the chance this weekend to speak informally with a group of young people (in their 20s and 30s) about whether they would ever consider starting their own business. Most of them like the idea of doing so, but confess to being afraid to do so, to the point most would never even seriously consider it. Here are the ten reasons they gave for this, along with my thoughts on how a Natural Enterprise could overcome these fears.

  1. Don’t Have the Skills: “I wouldn’t know where to start. I took entrepreneurship in college, but it was all about understanding financial statements and types of loans. I’ve never even spoken to a successful entrepreneur.” As the chart at right shows, their are eight capacities that at least one person on the team starting a new business needs to have, and sixteen learnings, most of which are best acquired by visiting with and speaking with entrepreneurs who are putting these skills into practice. This is not rocket science, and it’s a tragedy we aren’t teaching it.
  2. Don’t Have the Self-Confidence: “I’d get discouraged too early in the process. It all sounds so intimidating. You have to have nerves of steel and incredible courage to take this on. I know some entrepreneurs, and I don’t envy them.” It needn’t be intimidating. This is mostly fear of the unknown, and the lingering mythology of entrepreneurship that is perpetuated, alas, because so many entrepreneurs keep making the same avoidable mistakes over and over.
  3. Don’t Have the Ideas: “I’m not creative enough to come up with something novel. Entrepreneurs have these great ideas, and even then it’s not always enough to make a new business work.” Perception, not conception, is the key to entrepreneurial success: Paying attention is far more important than creativity. It’s all about finding a need and filling it, not coming up with an idea and then trying to find someone who might buy it.
  4. Don’t Have the Money: “If I had another ten grand, it would go to paying debts or meeting other immediate needs, not investing in a risky new business. And I’m not foolish enough to think anyone else would give me the money, either.” If you can fill an unmet need, there are several ways to finance the business organically, drawing on the interest and investment capital of suppliers, potential customers and business partners, and people you know who are always looking for a way of getting a better return than they can get in the bank.
  5. The Deck’s Stacked Against Entrepreneurs: “Big corporations have all the money, the subsidies from government, the tax breaks, and the cash to intimidate, sue or buy out any entrepreneur who challenges their dominance”. There is some truth to this, which is why the key to successful entrepreneurship is to find a need that is not immediately or obviously big enough or profitable enough to attract the attention of the dominant players in your industry. This is what Clay Christensen calls Disruptive Innovation, and entrepreneurs have the advantage of agility (and not having shareholders demanding seven digit revenues from any new offering) that makes them more adept that doing this than large corporations. This is a great equalizer.
  6. Couldn’t Handle the Failure: “If I tried and failed as an entrepreneur, I think I’d be crushed. I’d feel like a failure in life, it would probably affect my marriage and my friendships and my reputation, and if I came to hate my day job I wouldn’t even be able to daydream about running my own business, because I’d have already tried that and failed.” A survey a few years ago by Inc. Magazine found that only one factor correlated strongly with entrepreneurial success: A previous entrepreneurial failure. This is how you learn. If you avoid over-committing and learn how to “fail fast and early”, you can have the resilience to be a ‘serial entrepreneur’, and be comfortable with the fact that no entrepreneur succeeds in every undertaking.
  7. Don’t Know the Process: “I took some MBA courses, and they didn’t teach me anything about how to start or run your own business. Where do you learn this?” This is the principal function that The Natural Enterprise will serve. But while the book will lay out the process, applying it depends on the nature of the enterprise you are undertaking. Learning how to apply it comes from spending time with other entrepreneurs, and drawing on the experience and knowledge of your business partners, and advisers. Most people love to see new enterprises succeed, and those who can help are usually very generous with their time and counsel.
  8. Don’t Have the Time: “I’m working two jobs now just to make ends meet. If there were more hours in the week I’d take a third one. How could I ever find the time to start my own business?” The biggest time-consumer in starting a successful Natural Enterprise is the up-front research. But that research can be done while you’re doing other things you’re already committed to. Social occasions, courses, shopping trips, sales calls, dinners out, even watching your kids after-hours activities — all of these are opportunities to observe, explore and research untapped needs that could be the basis for a successful entrepreneurial venture. Take your time, do your research well, share the workload with your entrepreneurial partners and you will then be so sure of success that you’ll be able to confidently make the time to bring your business idea to fruition.
  9. Couldn’t Handle the Stress: “The entrepreneurs I know are in hock to the bank or to demanding investors, their personal assets are at stake, their family depends on them for steady income, and a single bad debt or overrun could sink them. Life’s too short for that much stress.” Entrepreneurs who live with that much daily stress (and there are a lot of them) are, in my experience, mostly running ill-conceived business. I know many entrepreneurs who absolutely love their work, are beholden to no one, and are doing so well they can afford to turn away lots of business (especially from aggravating customers) because they’d rather pursue leisure activities than work long hours. If your business truly taps an unmet need, you’ll have good customers, and very little business stress.
  10. Couldn’t Handle the Loneliness: “The entrepreneurs I know are the loneliest people in the world. They work incredible hours and have no time for anything else. They have to learn how to do everything themselves, because they can’t afford experts and consultants.” The biggest mistake a lot of people make in starting their own business is trying to do it all themselves. One-person enterprises have the highest rate of failure, largely because no one can know everything you need to know, or have all the requisite skills, to succeed in business. One of the most critical decisions in creating a Natural Enterprise is finding business partners who have skills and knowledge that complement (without overlapping) your own, who have the same commitment to the idea that you do, and who you love working with. Get that right, and how could you possibly be lonely?

I’m now even more convinced that this book meets a serious need. My challenge will be to get young prospective readers of the book to even look at it — their skepticism about the prospects for personal entrepreneurshiprun that deep!
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16 Responses to Ten Reasons Young People Are Afraid to Start Their Own Business

  1. Sarah Nagy says:
    February 27, 2006 at 08:42

    I agree it’s a tragedy we’re not teaching it – an extension of that Learned Helplessness you wrote about earlier. I’m thirty, and I’ve just got my architect’s shingle out in the past six months. I have solved some of the risk issues by: being married to someone who can meet more than half of the necessary bills; continuing to work part-time at a sympathetic business (design-build construction) which meets the rest of the necessities, and saves great time with networking and the ongoing requisite market research. Other advantages I have over my Dilbert peers: my husband travels many weekends, so I have those available to work (very necessary), and we have no children.What burdened me most were two things: the mysteries of the Process, and not understanding what niche I wanted to fill (maybe you’d put this under Skills? – but then again, I’m learning more faster in business than I did trying to prepare for it. Must be why they call it architectural PRACTICE.) The Process finally got cleared up by stumbling on a strident professional liability insurance agent, who gave me a 1-2-3 list of Things To Do By Monday And I’ll Get You a Quote. But the niche I had to struggle for on my own, working for various different kinds of firms, until I was very sure about what it was I didn’t want to be doing, and it finally became clear that a market wasn’t being served that I did want to be involved with. I don’t see how I could have done that more quickly than the ten years it took.I found myself hampered by being raised in a family with no business experience – both my parents are Dilberts – and school wasn’t very helpful either (aside from Technical Writing, which I recommend to everyone.) I did get a lot out of ‘The E-Myth Revisited’, which set my head straight about thinking about business like a Technician, and since the blogosphere has developed, I’ve found a good deal of motivation there.

  2. Chris Woodruff says:
    February 27, 2006 at 08:42

    Thanks for this fresh perspective on the old view of creating a new venture. When I was reading each item in the list I was smiling because I have had the same thoughts going forward in organizing to start my own venture. It is at least refreshing to know that people in my age group think the same. I especially connected with the last point of not trying to do everything yourself.I look forward to the book when it gets published.

  3. Jon Husband says:
    February 27, 2006 at 08:50

    Have you ever thought about publishing it online, on an easy-to-navigate site .. I think there are services for that kind of publishing now, and accompanying it with a Cluetrain or ChangeThis or GetFirefox kind of initiative ? It only takes a match and a few people blowing to start a brush fire.

  4. Ashley Johnston says:
    February 27, 2006 at 11:08

    I’m 23 from PEI. I have a few friends who all we do is talk about entrepreneurship. We have been talking for years. One of the ideas is finally starting to move ahead, and whenever I mention the possibility of starting my own business people ask where they can sign up to help. That encouragement really helps. If you know somebody who wants to do this encourage them to do it. Help them if you have anything to give. I agree, it is the self-sufficiency that is scary. But it feels like I have a network in place to limit the effects of a stumble. Entrepreneurship is a community thing.

  5. Peter Childs says:
    February 27, 2006 at 12:21

    There is a real need for services targeted at helping people at the earliest stages of entrepreneurship. We

  6. Justin K says:
    February 27, 2006 at 22:20

    One more thought that hasn’t come up yet – I’m 23, and work for a young environmental non-profit. The biggest reason that I have no urge to go off on my own is that I don’t want to live my life in (what I perceive as) a fundamnetally, intensely competitive environment. My view of business is colored very much towards questions of survival (where’s the next grant? where’s the next customer?) – how can you be expected to live a fulfilling life in that type of environment? But maybe you’re taking that on in the book?

  7. Russell Crosswy says:
    February 28, 2006 at 09:52

    I’m 23 and I’ve been in the ‘Real World’ since this past August. I worked a co-op job during school for job experience and I’ve been working with my current company since May 2005. It didn’t take me long to realize that I don’t enjoy working for someone else. I read the list and I am struggling with each one to a certain extent, but the drive within me to strike out on my own (with the help of others including close friends and family) and to achieve success as I define it myself is too strong to ignore anymore. I agree that the road ahead will be hard and will have some unavoidable setbacks, but why sit around in the cube wondering what if? One of the goals in my business venture is to achieve passive income. I see that as part of my goal for financial freedom. That will allow me to take on other business ventures (if I so choose or to take a vacation if I so choose) and achieve even more success in my life.

  8. Ashley Johnston says:
    February 28, 2006 at 11:35

    Dave, if you are looking for ideas for the book, I think I would put in an entire chapter on the concept of ‘value’. Not to put too fine a point on it, but I find most can’t tell you what something is worth without looking at the price tag. Like value in trade v. value in consumption. Something like that.. Know what I mean?

  9. Fard Johnmar says:
    March 2, 2006 at 21:24

    Hi. I came accross your post while on delicious. This sounds like a great book. I recently started my own firm (I’m 30) and I’m loving it. It’s certainly hard work, but I feel like I’m doing the right thing for me. I certainly have (and had) a lot of fear, but I’ve learned to deal with the things I can control (marketing, my product) and leave the rest (who hires me; whether I’ll get the business right away). I’m happy you’re writing this book. I’ll keep an eye on your blog to see how things are going.

  10. Jack Yan says:
    March 3, 2006 at 05:02

    To Russell and Fred above, go for it. I began my own business at 15 while studying

  11. Maddy says:
    March 14, 2006 at 12:12

    well i cant agree fully on it but i accecpt most of things pointed on ure articles… MONEY & CONFIDENCE !!! is all u need for buisness…well at age of 19 i started my buisness for rs.5000 .got money from my father. for first 4months i had like rs.30000 debts ..yea all for marketing purpose and i was the only person working in my office i answer all queries,support,accounts…HELL iam unable to sleep in night….no income and nothing till 6 months it has become a DO or DIE situation for me….but i havent lost my intrest on it i kept on working on diffrent marketing techniques and issues….i used to work like 15-16 hrs a day all alone …BUT the results is that IAM on TOP 3 in the industry. i have 15-20 ppl working underme :) SELF CONFIDENCE is something which stood with me always :)

  12. vk says:
    March 15, 2006 at 01:21

    Hi there,Nice write up. To be frank I failed twice in business (and I still dreaming to start third one). The idea of making *more money and doing something new *does not allow me seat back. I started first business when I was 18 years old after 4 four year later, I closed and went bank corrupt. Then I took small job and after 2 years later, I started it new business and within 2 years, again I went bank corrupt. I’d feel like a failure in life, it affected very badly as women whom I was suppose to marry left me and my friends (even my dad) thinks I am totally useless guy. In short, I lost all my reputation and I was on road (the end). It was sad enough for me and I thought I should kill my self. I started to take some medical treatment to get out of this dangerous situation. During this darkest time, I meet one person, we talked all about this failure, and he said few things to me 1) Failure is first step of success; he gave me couple of examples how even big business failed in their first or second attempts2) And he gave me a book called Bhagavad-Gita

  13. Ben Rowe says:
    March 18, 2006 at 11:17

    Great post Dave – I’m considering doing an MBA prior to starting a business. I’ll keep my eye out for your book.

  14. HooiLing, Beh says:
    March 24, 2006 at 05:36

    Nothing comes easy and success means hard work and sacrifice. Enjoy now, suffer later OR Suffer now, ENJOY LATER?Once a successful person told me that “if you want to be sucessful in life, you need to have a lot of self believe, vision, PASSION and not afraid of failure”.

  15. Fred Harvey says:
    June 29, 2007 at 19:26

    This is so right. I agree entirely to this post. If I had read that article before, perhaps I never have done so many mistakes in the past.Like you said, people need to have the self-confidence before investing time and money in a business.

  16. Carl Vogel says:
    August 11, 2008 at 00:27

    I do believe there is a lot of truth to the answers or comments. One other that could be included is getting comments from a spouse or other relation saying you can’t make money on the web. I do believe it can be done I have started 3 or 4 on-line business and then my spouse found out about it and forced me to quit. I was just starting to bring in money on a couple of them.

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