Entrepreneurial Motivations: Light and Shadow Forces

The best reason to start a company is to solve a problem that you genuinely, to your core, care about, and you can’t see another way to do it. People who find this are truly blessed.

And then there are the rest of us, and we are complicated. Here is my take.

The motivations for starting a company are complex – there are “light” and “shadow” forces. 

What can seem light:

“I want to make a positive impact on the world!”

“I want financial independence so I can spend more time with my family!”

Can also have a shadow component:

“If I make an impact on the world, I will finally feel self worth and the respect of my parents!”

“I need as much money and power as possible to give me feelings of safety I’ve never had!”

In my early 20s, my professional motivations were a poorly understood soup of light and shadow forces. I’d roughly characterize light forces as “needs pursued from a happy, authentic place” and shadow forces as “needs craved from an unhappy, incomplete place.”

I had a vision for my life that ended with a 20 hour work week by my mid-30s, a comfortable suburban existence, and plenty of time to spend with my future kids. I also desperately wanted to feel a sense of adventure – it was less about the money, more about the freedom, fun, and unpredictability.

Becoming an entrepreneur, or “going into business for myself”, seemed like the best way to achieve this future, so I picked that as my aspirational identity.

There was real joy in building a business. I loved finding talented people and being their best (albeit gruffest) cheerleader, and I loved playing a part in creating good jobs and putting a top quality product out into the world.

I loved the feeling that my life had some momentum and that every year would be different than the next. My business partner Tim is my childhood best friend, and being able to play the game of business with him is a real pleasure.

There are cracks in the story though.

Behind every light need there was a shadow craving, originating from a wound and an unhappy place.

Light: I wanted to feel empowered to shape my career towards my goals.

Shadow: I lost confidence that I would ever be “picked” by an elite institution whose status I could attach myself to in order to feel worthy. I had a deep anger and distrust towards authority.

Light: I wanted to be “in the arena”, living a true adventure, experiencing all that life had to offer.

Shadow: I wanted to think of myself as someone who was in the arena. Egoic grandiosity lurked behind many ambitions, telling me I was heroic and writing a superior “story” for my life.

Light: I was full of ambition and super excited to create something “real” in the world that I owned a part of.

Shadow: There was a lot of fear that I would fail at achieving my ego’s chosen identity. The fear could be extremely productive, but it could also be poisonous. I woke up anxiously in the middle of the night, and I would drive home from work with my face sore from clenching it all day. Anger was great fuel, but anger cut me off emotionally and made me numb.

Light: I wanted to feel autonomy over my time and financial future.

Shadow: I really didn’t want the pressures, constraints, financial limitations, and long hours of what I imagined a corporate job to be. I had to find some way to make money that just wasn’t that. Entrepreneurship was as much escaping that life path as it was running to building businesses.

It was messy business trying to get deep unmet needs met through my professional life, and the light/shadow cross currents were very confusing. 

Suffice to say that what seemed like a simple choice at 25 looks a lot more complicated at 39.

So, what?

The truth is, I’m still working on figuring out what to make of all this. Shadow motivations were extremely useful in the difficult parts of my early career, and I don’t know if we would have made as much progress without them. As Josh Wolfe says, “chips on shoulders put chips in pockets”.

However, as I got older, the negative side effects took a toll on my personal and professional life. Having so much fear and anger in my motivational stack just wasn’t working for me anymore, and it became painfully obvious that I had to address some areas of real neglect. Playing detective with my own web of motivations has been deeply helpful for my own growth.

If I had to leave the prospective entrepreneur with one thought (that I would have absolutely ignored at 25) it would be:

“The reasons you want to start a company are probably a lot deeper and more complicated than you think. You’ll learn a lot about yourself when you’re ready to try to figure them out.”

You, Inc – Getting Into Business

Wake up every day, consumed by “You, Inc”.

If your goal is to make the leap from labor to capital, from selling time to making money with your assets, then get into business for yourself as soon as you can. 

Don’t get into the perfect business, don’t get into your life’s work, just get into business.

Wake up every day, consumed by “You, Inc”. Have every thought process working towards your north star, building your little empire.

This journey is not about achieving your professional potential or even being happy – it is the singular goal to gain independence over your time and money. 

You can build your snowball from the smallest flake, but there needs to be something to grow from.

The biggest threat to the dream of independence isn’t picking the wrong type of business, it is procrastinating. It is never starting at all.

The earlier you start, the more time is on your side. The less money you need to live on, the more capital you deploy into opportunities with bigger upside. 

You just have to start. A business you own that is boring and unglamorous is better than no business at all. You have to start owning things, owning your time, and growing as a businessperson.

When you work at a job and you’re young, you make very few real decisions. When you own a business, you make real decisions every day and suffer/reap real consequences. 

Those reps compound rapidly, and over time you build earned, hardened judgment. You make better decisions over You, Inc, and the value builds.

People recognize that you’re “in the game”, taking risk and building. New opportunities come your way.

Over time, you leverage your labor less, and your judgment more. You allocate your time less, and your capital more. The snowball will build if you tend for it every day, but you have to start with something.

How Crypto Tokens Will Enable the Disruption of Businesses like Uber and Airbnb

Businesses that are two-sided marketplaces, built around network effects and transaction fees (Uber, Lyft, eBay, Airbnb), will be especially vulnerable to disruption from businesses built around crypto tokens.

I have spent much of the past six months trying to understand the world of Bitcoin, Ethereum, alt-coins, crypto currencies, crypto commodities, and crypto tokens.

If history teaches us one lesson, it is those who adapt will survive, and those who fight tooth and nail for the status quo will flounder when the world invariably changes. If many smart people say that something “is the future”, it is generally worthwhile to try to figure out why.

If you are brand new to all this,  A Letter to Jamie Dimon, by Adam Ludwin, is a great primer blog post. There are countless other blogs, podcasts, and books, but Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond is an extremely well written book that I thoroughly enjoyed.

Broadly, crypto currencies (like Bitcoin) function as digital money, crypto commodities (like Ethereum) provision scarce digital resources (like distributed computing power), and crypto tokens (99% chance you’ve never heard of one) are more of a flexible combination of a currency and a commodity. Altogether, we call these crypto assets.

Within the world of crypto assets, most of the attention is paid to the biggest crypto currency, Bitcoin, and the biggest crypto commodity, Ethereum.

Often overlooked and in their nascency, crypto tokens could be the most exciting crypto asset.

Crypto tokens have potential far beyond being the “internet of money” – they can reshape how businesses form and operate.

As a means to help individuals band together to create and capture value—crypto tokens could be the greatest innovation since the joint-stock corporation.

I will attempt to illustrate this potential below.

Disrupting the Two-Sided Marketplace of Web 2.0

Businesses that are two-sided marketplaces, built around network effects and transaction fees (Uber, Lyft, eBay, Airbnb), will be especially vulnerable to disruption from businesses built around crypto tokens.

Continue reading “How Crypto Tokens Will Enable the Disruption of Businesses like Uber and Airbnb”

Two Major Ways We Can Help Small Businesses Grow

I thought long and hard about what would most help a Bootstrapped Service Business (“BSB”) like ours grow faster and create more jobs, and it all comes down to improving access to meaningful investment capital – not small changes to tax rates, increasing deductions, payroll tax holidays, or tweaking regulations

‘Tis the season for tax reform, and in tax reform season, politicians talk about how changing the tax code will help small businesses grow and create more jobs.

I thought long and hard about what would most help a Bootstrapped Service Business (“BSB”) like ours grow faster and create more jobs, and it all comes down to improving access to meaningful investment capital – not small changes to tax rates, increasing deductions, payroll tax holidays, or tweaking regulations (which doesn’t even help if you happen to be a vassal with a feudal lord like the state of CA or NY…side gripe for another time).

Continue reading “Two Major Ways We Can Help Small Businesses Grow”