STORY INLINE POST
Why are you a founder?
What motivates people to start businesses?
What fuels entrepreneurial thought and action?
I have been fascinated by this philosophical quandary since I took my first entrepreneurship class at Babson College 18 years ago. I have never stopped exploring it.
Usually, people think that what motivates entrepreneurs to embark on their journey are the numerous potential extrinsic rewards, such as money, fame, success, among others. But ultimately, that’s just wishful thinking because you honestly have no idea if and when you’ll actually receive those rewards.
Many things have changed in the startup world in 18 years, but one thing remains the same: the failure rate.
Ninety-five percent of startups fail.
Clearly, being a founder makes little rational sense.
If I told you there’s a 95% chance of being hit by a car every time you cross the street, no reasonable person would dare put one foot in front of the other. Well, maybe one founder here or there would take the risk because, in the end, we founders are lunatics, but that’s a topic to be dealt with some other time.
Whenever founders came to campus to share their testimonies, I was always shocked by their stories of pure lunacy.
On the surface, you could say the majority of them were “successful.” What was evidently clear was that their success was painful and they had been through a lot to attain it. They had sacrificed everything, experienced several near-death experiences, and had all previously failed more than once. They exuded an aura of normalized PTSD, like a World War survivor.
Despite all that, they were happy. Radiant. Intoxicated with purpose and meaning. Despite the chaos (or rather, thanks to the chaos, as I later came to realize), they were fulfilled.
I remember thinking to myself, “They could not have become entrepreneurs solely for the hopes of attaining money or some other extrinsic reward because they don't have it and perhaps they never will. There has to be something deeper motivating them to do what they do that is stronger than the undeniable likelihood of failing.”
I decided to investigate and ended up devoting my undergraduate thesis precisely to this topic.
My hypothesis was that what was responsible for motivating entrepreneurial thought and action, in spite of everything, was an innate cognitive dissonance between risk and reward in founders.
Let's break it down …
Classic economic theory tells us that the higher the risk, the greater the reward. That part applies to entrepreneurs. What doesn’t apply is timing, and that’s precisely where the cognitive dissonance lies.
In terms of timing, classic economic theory says risk everything today in order to receive the greater reward tomorrow. In "founder talk," that translates into: “I'll risk everything today because in 10 years, I’ll be a millionaire.”
Obviously, that doesn't make rational sense because (1) 95% of founders won’t make it, and (2) since founders are already fulfilled, they must be reaping some kind of reward in years one to 10, regardless of whether they reach that supposed promised land.
If the real reward of entrepreneurship is not any metric of external success found at the end of the road, then what is the real reward of entrepreneurship and where do you find it?
That's what I focused on deciphering.
I decided I wasn’t going to use a rational lens to explore something that clearly wasn’t rational. Instead, I chose philosophy, existential philosophy to be precise, to see if it could shed some light and help solve the puzzle.
After reading the works of many existentialists and interviewing hundreds of founders, I finally broke the code:
1. The real reward of entrepreneurship is that it forces you into a state of sustained flow where you are constantly generating new existential meaning.
2. The real reward of entrepreneurship is found in the process, not the outcome. Remember the saying, “Life’s a journey, not a destination?” Well, the same goes for entrepreneurship.
Let’s unpack it …
First, let’s talk about the road, not the destination.
Entrepreneurship forces you to break various pre-established parameters and structures in your life. Where there was once order, now there is chaos. You go from having a single role to having many roles simultaneously. It's no longer a 9-5 commitment; it's existential, “full-life” and all-in. Novelty, uncertainty, and risk abound.
Now, let's talk about flow.
To enter a state of flow, you need to engage in a task that has the perfect balance between how challenging it is to complete and how capable you are at completing it. If your capacity exceeds the challenge, you get bored. If the challenge exceeds your capacity, you get scared. Flow comes from facing a demanding task while simultaneously realizing you are, or are quickly becoming, capable of overcoming it.
When you start a business, you are constantly facing extremely challenging activities that give you almost immediate feedback regarding whether or not you are capable of solving them. That feedback loop leads you to quickly develop any skill you realize you don’t yet have, which leads you to suddenly start feeling capable, which leads you to enter flow, which leads you to repeat the cycle with every new challenge discovered under every new rock on your entrepreneurial journey.
Now, let's talk about existential meaning.
Our existential evolution begins where our comfort ends. As an entrepreneur, you’re always operating way outside of your comfort zone, which leads you to discover who you are and what you are made of. You are constantly learning, maturing, changing, evolving, and adapting to survive. Biologically and chemically, you are also changing thanks to your brain’s plasticity: Your brain is constantly expanding to make room for all the new neural circuits it needs to create to code all the new experiences you are having.
This is what I call the existential roller coaster of entrepreneurship.
It's what I and several founders are addicted to. That's why serial founders tend to launch a new company once their existing company becomes less chaotic and more predictable, structured, and ordered, as they all of a sudden realize they are no longer in flow.
Entrepreneurship is like living in the movie Everything, Everywhere, All at Once, but on steroids.
When I understood this, I finally understood why I’m a founder: I do it for the existential reward.
I hope this discovery is equally enlightening for you and brings you peace in knowing that if you do decide to start a business or have already started one, on the inside your existential startup valuation is always appreciating and will give you the greatest existential ROI possible, regardless of what happens to your business on the outside.
That is a beautiful existential philosophical consolation for this short and unpredictable life.