In my experience, being an entrepreneur is all about taking on and managing risk well. An entrepreneurial spirit almost enjoys risk. At a firm, you usually don't get much material risk exposure to manage, so entrepreneurial individuals end up seeking out opportunities that can give them a more direct handle on their risk exposure (and any subsequent rewards). More often than not, this means starting a company where you largely decide which risks you're comfortable accepting, and which risks you prefer to avoid. The thrill is in navigating those risks using your guile to deliver value much above the expected risk premia for your domain. I worked in an investment bank for a few years, but the risk environment was too restrictive for me to really make a mark (from a job security perspective also, I'd often see lifers get the boot, so never really felt comfortable, even though on paper I should have been). Thus I quit, started my own company, took on a great deal more risk, but still experienced more work satisfaction. I think what I like most is the ability to take your professional future by the horns without any artificial constraints holding me back. For me, what it comes down to is this: entrepreneurs despise restrictions, and modern companies can't seem to exist without them.
you're equivocating. first you say it's about risk seeking/management and then you say it's about agency/independence. personally I strongly believe it's the latter. if you derisked my startup for me but let me stay in control I would be much happier. eating the risk is the premium /I'm/ paying for the agency - it's that opportunity that you don't have in a large company (trading risk for freedom).
Perhaps, but what I was trying to convey is that your own company gives you the freedom to choose your risks without restriction. Working for someone doesn't usually allow you to do that (as your boss decides your risk environment).
Traders choose high risk over low risk. Statistically, most day traders end up regretting that choice.
I suspect for a good proportion of entrepreneurs, the financial risks are low - it's either money you can afford to lose, or it's someone else's money, or both - the professional risk is low because a lot of companies will still hire you if you fail, and the personal risks are unknown and/or ignored.
Being a corporate employee is actually riskier. You can be fired at will with little or no safety net, for reasons that have nothing to do with your own professional skills or mistakes.
Quite the contrary in my experience. For most entrepreneurs, their first attempt is often make it or break it - i.e. the risk is high. The only thing is, the entrepreneur often knows that the odds are not as bad as they appear, because of their personal abilities at managing the risk. That's what they're hoping to get rewarded for eventually.
People choose risk based on their appetite. For sure, we try to minimise it, but if your statement were true, no one would ever cross a street or even drive a car. People will often take a higher level of risk in order to improve the potential reward.
Indeed, I was in the same boat - funding out of my own pocket. Now I still have full control of all my equity, which of course feels great. Otherwise, you risk becoming a glorified employee again and the control you worked hard for slowly fades away.
Source? I think one would find that most tech entrepreneurs are not backed by VC capital. VCs only invest in certain kinds of businesses that have the potential to grow to at least ten million dollars. YC looks for potential billion dollar companies. The VC business model just doesn't work for smaller businesses, which are probably the majority of tech businesses.
But that's the point - 2/3 of what you'd get from an established company, multiplied by a few years, is a very large amount of money.
If "maybe 1/3rd of what I’d get from an established company" was enough to pay mortgage and provide for a family of 3, then in the "not doing a startup" scenario you'd have earned&saved that money, and you effectively lose it if your startup doesn't work out.
Sure, but it’s not like I was living under a bridge or anything. My standard of living did not change one iota. The stereotype of a starving founder is just not true most of the time. In fact I’ve yet to meet a founder who did not pay him/herself a pretty good upper middle class living wage. Not millions, natch, but still six figures.
The point is not about living under a bridge or starving, the point is that this should be considered equivalent in most terms (except tax-wise) to earning your market-rate salary and choosing to invest 2/3 of that cash into the startup.
No matter how much you have left, the consideration of whether it's a good deal or not should include that choice to "spend" that amount of (potential) money on the startup versus whatever you would have done with that money otherwise. If you wouldn't have done anything, then there's choice of spending a few years on the startup versus having, say, half a million of savings for retirement.
Imaginary money you can't spend on anything, sure.
All of the time I have spent trying to build software at large, stable, safe companies has been wasted. Most of the time I have spent trying to build software at startups has been wasted, too. That's life in a field as young and uncertain as ours: most of what you do will turn out to be a waste of time.
So, what's that time actually worth? Same as what that software is actually worth: nothing, usually.
Not quite that imaginary. The opportunity cost is about 70-80k€ for a perm position, about 120 for freelancing. Plus the savings you’ll have to burn through. That’s a fuckton in my book
Well, sure, but if that's your measure of worth, then what are you doing making software? Go work in finance or insurance instead - that's where the real money is.
