I admire anyone who risks it all to become an entrepreneur. There is something noble about this pursuit. Reading Shoe Dog by Phil Knight, the first advice he gave about starting a business is about money (balance sheets). For many years whilst he was selling Japanese trainers, Phil had to work as an accountant. His experience at PWC (he was auditing company accounts) made him realise that what ultimately makes a business grow to be a success is the state of cash flow & balance sheets, not their idea.
How many entrepreneurs are conscious of this fact? That their downfall has a lot more to do with money than the quality of their idea or services. How reluctant are startups on selling their equity? How creative do people get to bootstrap? If they know this fact how invested are they in learning about accounting and vetting accounting firms before hire etc? How much time do they invest in learning about VCs etc?
This is the first lesson that Phil Knight decided to teach his readers. However from my perspective what I noticed from the onset of reading his book is that, Phil was passionate about running and what he wore on his feet whilst running. I am so surprised that he hasn’t yet mentioned that he dreamt about running shoes at one point in his life! He even wrote his thesis on running shoes!
I have now noticed two types of entrepreneurs. There are those who will do something that is in demand at that point in time, just as long as they can solve the problem. They are not necessarily passionate about what they are doing. However, they can’t imagine themselves doing anything else. Being stuck in some corporation is a big fat no no. And then there are the passionate entrepreneurs, their pursuits are not necessarily in demand but should they make their products or services, they will grow the demand. Their drive is usually the fact that they can do something that is already being done better. Entrepreneur number 2 creates a legacy.