Freezing in NH

BusinessWeek has an interesting interview called the Entrepreneurship Myth.  In it author Scott Shane talks about popular myths about startups. 

Shane’s book reveals a bleak picture of entrepreneurship in the U.S. It shows the average new venture will fail within five years, and even successful founders usually earn 35% less over 10 years than they would working for others.

This is probably true, but there are things you can do to make that number better.  I suggest reading The 4-Hour Workweek for details.  Plus, working for yourself can give you flexibility and that alone could be worth a 35% paycut.  But I suspect the average person is working more hours for less pay.  Remember folks, it’s important to have an exit strategy, whether we’re talking about a dog-walking business or a land war in asia.

At the individual level, the core fact here is the typical, median, right-smack-in-the-middle entrepreneur is a failure. The cost is everything associated with that. So if you start a business and the business dies, you could have been working for somebody else. You could have been making a salary. You could have had the stability—you wouldn’t have had that kind of stress that comes from the up and down of running that business.

So there’s the personal costs. From an individual level, the myth is that somehow if you manage to hit the average or hit the median, you’re going to be fine. The reality is that the distribution is so skewed you have to hit the top for it to matter, and in fact, you have to hit the top 10% to have income as an entrepreneur better than what you would have gotten working for other people.

Here’s a link to his book (amazon, and I get a cut if you buy it through here):  The Illusions of Entrepreneurship

Wouldn’t it be really funny if we found out something major (like the Bear Stearns buyout) was a hoax?  I’d laugh.  And then maybe punch someone.