Chapter 1. Myth No. 1: It Takes an Extraordinary Person to Start a Business
Truth No. 1: You Can Do It!
Introduction
The notion that it takes an extraordinary person to start a business is the most damaging myth that we discuss in this book. In most cases, it simply isn’t true. There are two ways to think about this myth. First, ordinary people, no richer or smarter than you, start new businesses every day. To convince you of this, we’ll introduce you to some of these people in this chapter and throughout the book. Second, even if the myth were true, who’s to say that you’re not extraordinary? No one has the exact same set of abilities, skills, values, experiences, past accomplishments, and personal aspirations that you do. As a result, you could be more uniquely qualified or have a more compelling reason to start a specific business than someone with a PhD from an Ivy League school or 20 years of executive work experience.
If you accept that these sentiments are true, it can totally transform your attitude about whether you’re capable of starting a business. It can free you to start thinking about whether specific business opportunities are right for you rather than whether you’re capable of starting a business at all. It can also boost your morale and sense of self-esteem. Starting a business isn’t easy, but neither are many things in life that are worth pursuing. The brutal reality of life is that in most instances what we’re able to accomplish boils down to whether we believe we can do it or not, the amount of encouragement and support we get, and the degree to which we’re willing to work hard and get help. As you’ll see throughout this chapter, there is no aspect of life in which this set of realities is truer than in the case of starting your own business.
The differences between people who start their own businesses from those who don’t has been studied for years. The somewhat surprising collection of results illustrate that there are no meaningful differences between business owners and nonbusiness owners in the most basic human characteristics, behaviors, attitudes, and desires.1 Most people, for example, want to make more money and crave independence, not just people who start their own businesses. Similarly, in regard to personality traits, people who start their own businesses are just as diverse as people who work in traditional jobs. You don’t have to have a certain personality, behave in a particular way, or have a certain set of motives or desires to be a successful business owner.
What type of person, then, do you have to be to start and run your own successful business? Say you’re a 50-year-old male whose career has plateaued, and you see no chance for advancement, or you’re a 28-year-old female with two small children, and it literally breaks your heart to drop them off at daycare five mornings a week. What type of people are able to say, "Stop, I’m not doing this anymore. There is another option—I’m starting my own business to take control of my life, set my priorities straight, and do something that makes sense for me and that I’ll be able to thoroughly enjoy."
The myth that "it takes an extraordinary person to start a business" is damaging in part because it focuses strictly on the individual. If you believe it, it puts the entire burden on you, rather than the broader set of circumstances and issues involved. It causes you to think, either consciously or subconsciously, "Am I good enough?" or "Do I have what it takes?" Thinking this way invariably leads to an up or down vote in your mind—you decide, once and for all, whether you’re good enough or not good enough to start a business based on your notion of what an "extraordinary person" is. This type of thinking is fundamentally flawed. Objectively, most of us don’t know if we have the skills, abilities, aptitude, and experience necessary to tackle a specific task or do a particular job unless we learn more about it (or have done it or something similar to it before). In addition, nearly all of us would seek the advice of others and ask their opinions about our suitability for a particular business or career before making the final decision to start our own businesses. In some cases, we may even decide to go back to school or get additional training if we’re interested in a particular area but don’t think our skills are sufficient. So in reality, the issue of whether you’re good enough to start a business doesn’t depend just on you at a fixed point in time. It depends on a lot of things. Primarily, it depends on the fit between your skills, abilities, experiences, and aspirations and the demands of the particular business you have in mind. It also depends on whether you really want to start a business or not.
There are basically four types of businesses, as shown in Table 1.1.
Table 1.1. Types of Businesses
All these types of businesses are acceptable—there is no value judgment made here. This book, however, focuses on the last three: lifestyle, managed growth, and aggressive growth firms. A natural outcome of the myth that it takes an extraordinary person to start a business is the mistaken belief that every business should grow rapidly and make a lot of money. There are many small businesses that provide their owners financial security and satisfying lives and never grow or make tons of money. This book equally targets this type of business along with more aggressive growth firms.
In our experience, at least four primary factors prompt and motivate people to start their own business. As you read through these factors, tip your chair back from time to time and think about your own life and the degree to which each of these factors might play a role in your own decision to start a business. Pay particular attention to the examples of people who left traditional jobs to start their own businesses and the reasons they made the decisions they did.
Factors That Prompt and Motivate a Person to Start His or Her Own Business
The factors that prompt and motivate people to start their own businesses are shown in Figure 1.1. A person’s decision to start a business is both practical and personal. It’s practical in that the decision is based partly on a simple calculation of whether a person can better manage her life and meet her aspirations and goals through a traditional job or by owning a business. It’s personal in that the decision also hinges on whether a person believes she is capable of owning a business or not, whether she has the support of the most important people in her life, and the degree of passion she has for a particular business idea.
Figure 1.1. Factors That Prompt and Motivate a Person to Start His or Her Own Business
Let’s look at the four factors that prompt and motivate someone to start a business.
Triggering Event
There is almost always a triggering event that starts someone thinking about starting a business. A triggering event can be getting a business idea, either by deliberate search or chance encounter, or it can be any incident or occurrence that has an impact on a person and causes him to think about making a major life change—like changing a job or career. Examples of triggering events, which can be either positive or negative, are shown in Table 1.2.
Table 1.2. Triggering Events
For many people, the types of events shown in Table 1.2 have little impact, at least as far as their jobs or careers are concerned, and don’t trigger any reaction. For others, one or more of these events might be deeply impacting and cause them to seriously consider making changes in their lifestyles and careers.
An example of how an event can trigger a major change in a person’s life, which leads to the decision to start a business, is provided by Sean Tennant, a middle-aged male. After a 20-year career with Delta Airlines, Tennant had to decide whether to take a pay cut to stay in Boston or transfer to Atlanta, a Delta hub. "I had to make a decision whether to go and get a cheap buyout (equivalent to three months’ salary) or stay with a sinking Titanic and get nothing," Tennant recalls.2 He decided to leave Delta and buy a Cartridge World franchise. Cartridge World is a rapidly growing franchise organization that refills ink cartridges for about half the price a new cartridge costs. An added benefit of owning a Cartridge World franchise, from Tennant’s perspective, is that it encourages people to recycle ink cartridges rather than replace them, a practice that appeals to his sense of environmental stewardship. Tennant now owns and runs a busy Cartridge World franchise and indicated that his business started breaking after only four months.
Aspiration Gap
The second factor that prompts people to begin thinking about starting a business is the presence of one or more aspiration gaps in their lives. All of us have aspirations, which are made up of our most important goals, objectives, ambitions, desires, and longings. Our aspirations vary because they are influenced by our values, abilities, experiences, families, jobs, and individual circumstances. When one or more of our aspirations are unmet, we have aspiration gaps in our lives. The extent to which an aspiration gap prompts someone to take action, to try to eliminate or narrow the gap, varies based on the importance of the aspiration and the individual involved.
Collectively, our aspirations form what researchers call our aspiration vector, which is the sum total of all of our aspirations. Sometimes, our aspiration vectors can get complex, particularly during busy times in our lives, like when we’re simultaneously trying to build a career, love our spouse, raise kids, save money, stay fit, and so forth. For people who have strong aspirations and are insistent that certain aspirations are met, their aspirations become the motivating or driving factors in their lives. For example, a young mother might have the following three aspirations regarding a job that are particularly important to her: pays at least $40,000 per year, has her home by 3:00 pm on weekdays to meet the school bus, and allows her Sundays to be free to participate in church and volunteer-related activities. Similarly, an Assistant Manager for a large retail chain, like Target or Lowe’s, might be driven primarily by the single aspiration of having his own store to manage and run by the time he is 35.
A person can become discouraged or upset when he or she looks at his or her job or alternative jobs in the traditional labor market and concludes that none of the choices will allow his or her most important aspirations to be met. In these instances, a logical alternative is to start a business. Although starting a business isn’t easier than a traditional job, a business owner often has more discretion and control over his or her time and schedule. This rationale explains in part the recent jump in the number of home-based businesses. Home-based businesses often help people better juggle both professional and family-related goals and aspirations.
Daryn Kagan, a former reporter for CNN, become discouraged with her career trajectory and decided to leave the cable network to do something she had thought about for a long time, create a Web cast (a streaming video on a Web site) that features good news.
"After 12 years at CNN, it became clear that I wasn’t going to have the kind of opportunities that I wanted. I see that as the nudge I needed to move on. I had been thinking of some version of this (business) for a long time. These are the kind of stories I have been drawn to—the kind that make your heart go zing. It was one of those moments in your life where you have a chance to sit back and think, ’If I could do anything in my life, what would it be?’"4
After leaving CNN, Kagan eliminated her aspiration gap and fulfilled her ambition by launching darynkagan.com. If you’d like to see the fruits of her efforts, you can go to her Web site and view her daily "good news" Web cast. The stories she posts are both heartfelt and inspiring.
An example of three people who shared an aspiration gap and eliminated it by starting a business together is the story of Christopher Jones, David LaBat, and Mary McGrath. The three, who are educational psychologists, had secure jobs at a public school in the Santa Clarita Valley, north of Los Angeles. Over time, they felt inhibited by the limited range of services they were able to provide students in a school setting; so they left their jobs to start Dynamic Interventions, a more full-service educational psychology and counseling center:
"The idea came from some general frustrations with not being able to practice the breadth of service that [we wanted to]," Jones said. "And instead of going to work and being angry about it for the next 30 years, we decided to do something about it. With Dynamic Interventions, our service doesn’t stop at the end of the school day. We can go more in-depth and be more beneficial to the whole family."5
Dynamic Interventions now offers a full range of educational and counseling services for school-aged children and their families.
A final example is Kristina O’Connell, who experienced a triggering event and an aspiration gap at the same time, which led her to start Wadee, an online company that sells handmade children’s toys and gift items. A former high-tech marketing executive, O’Connell comments on the set of circumstances that motivated her to start her own business:
"In 2000, I lost both my parents. That, on top of the fact that I started having children, changed my perspective. It made me realize how short life is, so you’ve got to do what you love. I had run out of gas with high-tech and was burnt out, so at the end of 2002, I decided to take a couple of years off and start Wadee. I wanted to be home with my family, so I built my business around my family. My husband has been tremendously supportive, and that has allowed me the freedom to follow my passion."6
Even though she was a successful high-tech executive, O’Connell had a long-time interest in starting a company to make children’s toys. That interest, or aspiration, coupled with the loss of her parents and the start of her own family, provided her the necessary motivation to set her high-tech career aside and fulfill her aspiration to launch her business.
Self-Efficacy
A third factor that prompts people to start their own businesses is self-efficacy. Self-efficacy is similar to self-confidence and refers to the strength of a person’s belief that he or she is capable of successfully completing a task.7 A person generally avoids tasks where his sense of self-efficacy is low and engages in tasks where self-efficacy is high. It’s important to understand the distinction between self-efficacy and self-esteem. Self-esteem refers to a person’s overall sense of self-worth, whereas self-efficacy refers to a person’s ability to complete a specific task. As a result, a person could have a very poor self-efficacy for performing a specific task, like playing golf, but still have a very high self-esteem, if playing golf isn’t an activity that’s very important to the person’s overall sense of self-worth.
The result of this rationale is that a perfectly normal person with a healthy sense of self-esteem could have very low self-efficacy for starting a business. Low self-efficacy often leads people to believe that a task is harder than it is. It also affects how a person deals with a task. Individuals with high self-efficacy for a given task, like starting a business, usually approach it with enthusiasm and drive, while people with a low self-efficacy for the same task approach it with skepticism and dread.8 This is why some people, even though they often think about starting their own businesses, have never done it. Deep down inside, they believe that they don’t have the skills and abilities to start and run a successful business.
Four factors that affect a person’s self-efficacy for starting a business (or performing any task) are explained in Table 1.3: experience, modeling, social persuasions, and physiological factors. A person can increase his or her self-efficacy for starting a business by strengthening themselves in one or more of these areas. Simply reading the stories of ordinary people who start and run successful businesses is one form of modeling (or vicarious learning) and can provide you with the sense that "If they can do it, I can do it, too!" Similarly, participating in small business workshops and events where you get encouragement from successful business owners, who are no smarter or more capable than you, can boost your self-efficacy for starting a business of your own.
Table 1.3. Factors Affecting Your Self-Efficacy in Starting a Business
J.J. Matis, a successful business owner, affirms the importance of vicarious learning through reading about others. Matis started a company called J.J. Creations which designs, manufactures, and sells a line of backpacks, travel bags, book bags, and similar items primarily for sports fans. In 1999, she looked for something that she could use to carry her water bottle, peanuts, binoculars, and radio when going to a Los Angeles Dodgers game. When she couldn’t find anything out of the ordinary, she created a bag herself (she had been sewing since she was a teenager) that looked like a baseball. At the game, she was inundated by people asking her where she got her bag, which prompted her to think that she might be onto a business idea. She took her idea to Mike Nygren, the merchandising manager for the Dodgers. Nygren encouraged her to make some additional samples and incorporate the project into her MBA program at California Lutheran University. After receiving her MBA, Matis started her business, which took considerable persistence and will. The business now sells bags for a variety of sports teams, politicians, and rock groups. Her "flag-bags" are even featured in the Senate Gift Shop on Capitol Hill in Washington, D.C.
Matis later wrote:
"After being a Featured Lady on LadiesWhoLaunch.com in April 2004, I received numerous emails from readers who felt inspired by my story of turning my graduate project into a business. Mostly, their emails expressed how they’re planning on starting a business and by reading my story of perseverance and tenacity, they’re going ahead with pursuing their ideas for starting a business. It inspires me when people express that I’ve inspired them!"9, 10
Passion for a Business Idea
A fourth factor that prompts people to start their own businesses is passion for a business idea. What often happens is that a person gets an idea for a new product or service, and there is no practical way to bring the idea to market other than starting a new business. In these instances, a person’s willingness to quit her job or start the business part-time often hinges on how passionate he or she is about the product or service idea.
In many cases, a person’s passion for a business idea stems from the belief that the idea will positively influence people’s lives. This sentiment guided Benjamin Troget, cofounder of Kepner-Tregoe, a management consulting firm. He said:
"Tremendously important to me was the feeling that we were doing something that had a significance far beyond building a company or what the financial rewards could be. I was convinced we were doing something that had tremendous importance in the world."12
This level of passion explains why billionaires like Bill Gates of Microsoft, Steven Jobs of Apple, and Larry Page and Sergei Brin of Google continue working after they are financially secure. They strongly believe that the product or service they are selling makes a difference in people’s lives and makes the world a better place to live. It also explains why many owner-operated businesses do well in spite of stiff competition. If a business owner is willing to work long hours and commit himself or herself passionately to see a business succeed, that’s a combination that’s hard to replicate in a regular firm.
An example of the pervasive role of passion in conceiving and launching a new business is provided by John Plaza, the founder of Seattle Biodiesel, a company that makes biodiesel, an environmentally friendly substitute for regular diesel fuel. Plaza, a former airline pilot, quit his job flying commercial airplanes to pursue an interest in alternative fuels. A single flight sparked his passion for environmental stewardship and caused him to decide to make a career change:
"I was flying a 747 from Anchorage to Tokyo, and I started thinking about how much fuel that flight used. I figured out that in a 6 hour flight, we used enough fuel to power my personal vehicle for 42 years. I had to make a change."13
The change Plaza made was to start Seattle Biodiesel. To get the business off the ground, Plaza mortgaged his home, sold his boats and cars, and borrowed money against his 401(k). Taking financial actions such as these are common for entrepreneurs who are passionate about their ideas.
The payoff that many business owners receive from their hard work and passion is the level of extreme satisfaction they experience as they work in their businesses every day and watch customers benefit from the products or services they sell. Joy Pierson, the founder of Candle Café and Candle 79, two restaurants in New York City, is such a person. Her restaurants serve organic and vegan food, which provide options to people who not only prefer a certain diet, but have strict dietary restrictions because of allergies or other health concerns. Pierson said her greatest success is...
"...the opportunity to touch people’s lives in a profound way through feeding them. We offer menus for people with Celiac disease, who cannot tolerate wheat. One day a child with Celiac disease dined in our restaurant. She was about nine years old and had never been to a restaurant before...she couldn’t risk the possibility of cross-contamination from wheat products. She and her family were thrilled that they were able to experience being in a restaurant together to celebrate a special occasion."15
A similar example is Lubna Khalid, the founder of Real Cosmetics, a company that creates make-up and skin-care products for women of all nationalities and ethnicities. Khalid started Real Cosmetics as a result of her own personal frustration in not being able to find products and colors for her skin tone. Khalid said:
"What I love about this business is the opportunity to create something new, different, and innovative and the chance to create images and colors that work on a range of skin tones. The other day, we did a photo shoot using seven different models who were women of all different backgrounds. It was incredibly satisfying to produce this shoot and experience the culmination of all my ideas."16
One aspect of passion is that it is often used as a proxy by others to determine how committed an individual is to starting a firm and seeing it through. Tom Simpson, an investor who passed on the opportunity to get in on the ground floor of Starbucks because he couldn’t see how anyone could make much money selling coffee said, "I missed and completely discounted all the passion that Howard Schultz had and what he was going to set up (and how he planned) to accomplish his goals."17 Simpson now says that when he meets a team (of prospective business owners), he watches to see if their eyes light up when they make their presentation for funding.
Additional examples of how business owners view passion are shown in Table 1.4.
Table 1.4. The Importance of Passion in Starting New Businesses
Summary
Ordinary people, just like you, can and do start successful businesses every day. The irony is that many people never get the chance because they think they can’t do it or they believe that only extraordinary people start their own businesses. If one or more of the factors that prompt or motivate people to start their own businesses applies to you, you may want to give business ownership more serious consideration.
The next chapter deals with the myth that starting a business involves lots of risk. While there is a measure of risk involved with any endeavor in life, it’s important to think about risk holistically. If this chapter has caused you to stop and think, "Boy, maybe I should do something different with my life. I have unfilled aspirations and passions, too," your biggest risk might be to maintain the status quo, rather than to make the change that will lead to a more satisfying and fulfilling life.
One final note of inspiration. Muhammad Yunus is a Bangladeshi banker who won the Nobel Peace Prize for inventing the concept of microcredit. Microcredit is the extension of small loans to people who can’t qualify for traditional financing. Yunus recently wrote a brilliant and heartfelt book titled Banker to the Poor. In the book, Yunus took on the myth that it takes an extraordinary person to start a business and also talked about the role of small business (or entrepreneurship) in building economic systems around the world. Yunus wrote:
"To me, an entrepreneur (small business person) is not an especially gifted person. I rather take the reverse view. I believe that all human beings are potential entrepreneurs. Some of us get the opportunity to express this talent, but many of us never get the chance because we were made to imagine that an entrepreneur is someone enormously gifted and different from ourselves. If all of us started to view every single human being, even the barefooted one begging in the street, as a potential entrepreneur, then we could build an economic system that would allow each man or woman to explore his or her economic potential. The old wall between entrepreneurs and laborers would disappear. It could become a matter of personal choice whether an individual wanted to become an entrepreneur or a wage earner."18
Endnotes
1. Murray B. Low and Ian C. MacMillan, "Entrepreneurship: Past Research and Future Challenges," Journal of Management 14 (1988): 139–161.
2. Michael McCord, "Career Refilled," Seacoastonline, http://www.seacoastonline.com, 2006 (accessed February 2, 2007).
3. Screenlife home page, http://www.screenlife.com (accessed February 2, 2007).
4. Ladies Who Launch home page, http://www.ladieswholaunch.com (accessed February 5, 2007).
5. Adam Clark, "A Risk Worth Taking," The Signal, October 26, 2006, http://www.the-signal.com/?module=displaystory&story_id=33749&format=html (accessed February 6, 2007).
6. Ladies Who Launch.
7. C. Chen, P. Greene, and A. Crick, "Does Entrepreneurial Self-Efficacy Distinguish Entrepreneurs From Managers," Journal of Business Venturing 13 (1998): 295–316.
8. Daniel Forbes, "The Effects of Strategic Decision Making on Entrepreneurial Self-Efficacy," Entrepreneurship Theory and Practice, September 2005: 599[nd]626.
9. Ladies Who Launch.
10. Ladies Who Launch. Matis’s full story, can be accessed by typing her name into the search box.
11. nPost home page, http://www.npost.com (accessed February 5, 2007).
12. Larry C. Farrell, Entrepreneurial Age: Awakening the Spirit of Enterprise in People, Companies, and Countries (New York: Allworth Press, 2001).
13. "Seattle Biodiesel Closes $2 Million Financing: New CEO With Package," Green Car Congress, July 18, 2005, http://www.greencarcongress.com/2005/07/seattle_biodies.html (accessed February 9, 2007).
14. Flavorx home page, http://www.flavorx.com (accessed February 10, 2007).
15. Ladies Who Launch.
16. Ibid.
17. Monica Soto Ouchi, "Entrepreneurs With Passion Could Hold Secret to Investing Success," The Seattle Times, April 19, 2004.
18. Muhammad Yunus, Banker to the Poor: Micro-Lending and the Battle Against World Poverty (New York: PublicAffairs, 2003).