Sunday, a wave of conversation was started about whether startups really care about money or not. There’s a real issue of quality, money, and values which Nick Bilton pointed out in his blog post; and that’s just the tip of the iceberg.
It’s easy to see why the conversation happened: It’s the one-year anniversary of Occupy Wall Street, Facebook stock has hit a new bottom, Instagram was purchased for $1 billion, and people are having huge gobs of money thrown at them for making the next “It’s like X for Y” product with doubts to real value. We’re having doubts about what throwing a social/mobile/local/cloud/whatever-the-next-hype-is layer over everything is doing to create a valuable difference in our lives in a time when (a lack of ) money is at the forefront of most people’s minds.
How Does Money Factor In?
So where is money in the entrepreneur’s mind? It depends on how well the entrepreneur is doing. Entrepreneurs care about money in a nuanced-“Drive” way: entrepreneurs don’t care about money, unless they make a certain amount. It’s as thought there’s a communal awareness of money that says “If you don’t have much money, you’re just like the rest of us” and “If you’re making tons of money, then you’re one of the golden children.” (And if you only care about money enough to change the way that people handle their transactions, you may end up with a $3.25 billion valuation. How’s that for irony?) But if you’re one of the people in between, it’s a very scary place to be.
Being in the middle isn’t just about fears of not being as good as your competitor, it’s about what you’re doing (or not) with your money and whether or not you have enough. Lacking money isn’t the problem, it’s having money. You have to worry about continued and new investment at a higher and higher price, and worry about proving your worth. It’s not a small amount of people and companies living in this middle ground.
Raising Investment Money: What Comes Next?
That’s why Ben Kaufman’s post to Quirky’s blog stirred up so much talk about why raising investment money is not an accomplishment in itself. There comes huge expectations, internally and externally, when you’ve raised funding and as we are all well aware, “expectation is the root of all heartache.” Having money means you have more to prove.
This heartache is compounded because the barometer of proving how disruptive your idea is and how influential you are as an entrepreneur is gauged by how much investment money you’ve raised from whom and what your latest valuation is. Money made isn’t to be celebrated, it just means more expectations, more disruption, more improvement. Mark Zuckerberg explained that Facebook’s feelings towards money, despite being valued at billions of dollars, as: “Simply put, we don’t build services to make money; we make money to build better services.”
More than anything, money conjures bad images in entrepreneurs’ minds. I’m not talking Rich Kids of Instagram– wealthy people everywhere spend obscene amounts of money on obscene things. The real bad imagery is what most people see in their minds when they think of businesses and money. It starts conjuring images of people in suits who went to business schools and are optimizing away everything to compete with whoever is “beating” them. Everyone wants to have the “I Miss the Mob” mentality and act like it doesn’t matter.
Entrepreneurship: What’s the Draw?
The Silicon Valley brand of entrepreneur (and idol) is what draws many people to entrepreneurship. The ideals of changing the world and not caring about money are what makes students forgo college degrees and spots in cubicles. Unfortunately, the Silicon Valley brand of entrepreneurship isn’t separated from entrepreneurship as a whole. According to a CityMax infographic, 66% of entrepreneurs said that they wanted to start their own company because they wanted to join the startup culture.
Unfortunately, wanting to build wealth, own a company, and capitalize on an idea were about the same as a motivating factor. It’s an uncomfortable, avoided intimacy of values for entrepreneurs and those interested in joining startups. When I spoke to Syracuse University students interested in working for startups, many said they had no interest in becoming an entrepreneur. One student said, “I don’t want to start a business. It makes it sound like I went to business school, wear a suit, fly business class, have a blackberry. I don’t want any of that. I just want to wake up in the morning and care about what I’m doing.”
Entrepreneurship has an unfortunate affiliation with money. No “true” Silicon Valley entrepreneur or company wants to be associated with a goal of money. Not when the Valley’s idols stand for revolutionizing the world, improving user experience, and loving what they wake up in the morning to go do.
Entrepreneur is a loaded word, no pun intended.