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ARE ENTREPRENEURS HAPPIER?

EPISODE #194 TRANSCRIPT

A little while ago, I came across an article in the Wall Street Journal that asked the question: Are entrepreneurs happier? Quite a few podcast listeners have also reached out with questions about whether they should change paths. While every individual’s circumstances are completely different, there are some considerations that are worth thinking about no matter what your position is currently. 

I mentioned this last week in the context of the Great Resignation and the growing trend of people exiting permanent jobs to start their own businesses - are entrepreneurs happier, or is the grass just greener? I want to dive below the surface to examine this phenomenon a little more deeply.

COVID AND THE RETURN OF THE ENTREPRENEUR

COVID may be starting to peter out in terms of its prominence in our day to day lives, but it has certainly left its mark. The opportunity that we've all had to step back and weigh up our current lives has left many questions:

• Are we in the right relationships? 

• Are we in the right jobs? 

• If we want to be happier, what could we actually do? 

For many of us, this brought about some considerable changes. We've all heard about the Great Resignation and how it's caused many people to reevaluate their current employment situation. People are no longer prepared to endure the same level of benign neglect, and in some cases, active disregard that their leaders have shown them over the years. The solution? Well, an obvious one is to just get a new job, to go and work for a leader who truly cares, and can help you to live your best life every day. To be honest with you, this can be a little patchy. 

In my experience, the probability that you'll find a better leader than the one you are leaving is not as high as you might think - and I'm really confident that the pandemic hasn't created a never-before-seen surplus of great leaders. You may well find a better situation, and you may even get through the honeymoon period relatively unscathed. But in reality, it's a bit of a crapshoot. I suspect we're going to see a lot more resignation regret and employees looking to return in the coming year and beyond. 

The other obvious reaction to being sick and tired of being sick and tired, is to leave the world of paid employment altogether! To set up your own business, to pursue your true passion and purpose. According to the New York Times, new business applications are on the rise, reversing a really long term trend. In 1980, 12 percent of employees in the US were new businesses, but by 2018 that had fallen to just 8 percent. COVID may have been just what was needed to stimulate the business economy, which relies heavily on new companies for employment, growth and innovation. 

In 2021, new business applications in the US were up by more than 50 percent when compared to 2019. There were 3.5 million applications in 2019, 4.4 million in 2020, and 5.4 million in 2021 - and early indications in 2022 are that this trend doesn't appear to be slowing anytime soon. Clearly there's a move to the entrepreneurial side of the fence.

ARE ENTREPRENEURS HAPPIER?

Let's have a look at the relative happiness of entrepreneurs compared to people who are employed in other companies. The first finding of the study is that entrepreneurs ARE actually happier. The Wall Street Journal article cites a professor from Baylor University who says, “Despite dismal failure rates, long hours, low income, high stress levels, and a host of other problems, entrepreneurs report consistently higher rates of happiness than wage earning employees.” 

Add to this, the fact that entrepreneurs have higher stress levels, work 13 hours per week longer, and earn less than their fully employed counterparts, and it makes this picture even more surprising. But, apparently the basis for this is that the positives of running your own business outweigh those negatives. This is because entrepreneurs tend to be deeply invested in their businesses, even though their passion is obviously a double-edged sword. Balancing out the stress, late nights and overwork is a strong sense of purpose and autonomy. 

How many of you have said or heard a friend say “I'd love to be my own boss and not have to answer to anyone else?” Well, in reality, we all answer to someone, right? Even as an entrepreneur, you'll answer to your customers and suppliers, maybe a business partner - and maybe even the creditors at your bank. 

Interestingly, as these startup businesses grow, they don't necessarily make owners happier either. A very high percentage of entrepreneurs start a business so that they can grow it, but with growth comes different problems. Of course there's more revenue, and if the business is well managed, greater profits. But there's also more headaches, greater complexity and new issues altogether - like hiring and leading other people. I suspect that many entrepreneurs left their jobs precisely to avoid those issues in the first place. 

KNOW WHERE YOUR GRASS IS GREEN

Let me just give you a quick anecdote about business growth:

A partner from a big global consulting firm was holidaying in the Greek islands. She was a very inquisitive and relatable person and made friends easily. So there she was in a little fishing village, and she noticed a middle aged man in a waterfront cafe, drinking his coffee, intently watching a fishing boat in the harbor unloading its catch. She asked if she could sit down and engage him in conversation. She learned pretty quickly that he actually owned this fishing boat and that each morning he would come down to the harbor, sit in the cafe and watch the crew bring in the daily catch. 

Of course, the cogs started turning in the partner's head as she thought about expansion plans, leveraging the existing business to fund exponential growth. Before long, with hockey sticks dancing in her head, she had a perfectly formulated plan to turn this man's little one boat business operation into a high performance commercial fishing fleet, catching tonnes of fish each week - which could then be moved through the sophisticated supply chains of Western Europe.

Anyhow, when she eagerly started describing this to the man, a little smile broke out on the corner of his lip, and the more she outlined her plan for world domination, the wider his smile became. After finally pausing for breath, the man looked at her and simply said, “Why would I want to do all that?” 

The woman replied that would make him incredibly wealthy. The man smiled again, “Why would I want to be incredibly wealthy?” 

- “Well, because then you'd have the freedom to do anything you want. Imagine what you could do if you had all that money!” 

Now, the man was visibly laughing as he said, “If I had all that money, you know what I'd do? I'd sell my commercial fishing fleet - maybe except for one boat. I'd live in this same beautiful little village where I was born, and I’d come down here every morning to drink my coffee and watch my single boat unload its catch.”

The moral of this story is that it's pretty useful to know what makes you happy before you get too far down any particular track.

FROM CORPORATE EXECUTIVE TO ENTREPRENEUR

I'd been an employee for my whole career - and I even told myself that I didn't have the risk tolerance to go it alone and have a crack at an entrepreneurial venture. As it turns out, this wasn’t true but it was certainly the story I told myself. 

What it came down to for me was that at the ripe old age of 55, I looked at my future trajectory as a corporate Executive and I wasn't entirely happy with what I saw. Sure, the money was great, and I had even better earning years ahead as I exploited the extent of my experience and track record - but I was also just starting to feel a little jaded, and I didn't really want to be in the yoke doing that type of work for another 10 years. By the same token, I certainly didn't want to retire early - I felt as though I was just starting to get good at this leadership stuff. Fortunately, I had Emma, my daughter and business partner, in my left ear trying to make the entrepreneurial option as attractive as possible. She had a real vision for what Your CEO Mentor was going to be. Of course, the rest is history. 

We began the business as soon as I finished my contractual obligations as Chief Executive of CS Energy in September of 2018. According to the podcast episodes, that's 194 weeks ago, and there's not a single day that I've regretted my decision in any way. Not financially, certainly not in terms of risk, workload, added stress or even boredom. 

Our purpose is to improve the quality of leaders globally, and we are fortunate enough to be changing leaders around the world every single day. That's a truly incredible feeling, and I could never have got that from an employment job. There's an old expression that your worst day on the golf course is better than your best day in the office. Even though I genuinely loved my Executive and CEO roles, that expression holds true for me. My worst day at Your CEO Mentor is better than my best day in corporate.

That all sounds a little romantic and utopian, doesn't it? Make no mistake, it takes a lot more than just finding your passion and deciding to leave your current employment situation so that you can go on and live your best life. One thing the research on entrepreneurs doesn't examine is the number of entrepreneurial ventures that fail. 

For every successful entrepreneur interviewed  - the yardstick for success, I guess, being that their business is still trading - there are another four who set up with the same intent and their business simply crashed and burned. I can say with a fair degree of confidence that failed entrepreneurs aren't necessarily happier than their wage-earning counterparts. 

When Emma and I set up our business, we went in with eyes wide open. We had had a few things going for us:

I had broad business experience across a range of industries.
I knew how to run a business for high performance. I had the skills and confidence that come from doing this a few times, over a lot of years. I was also pretty convinced I knew how to make these skills fit-for-purpose in a micro-business context. 

We had plenty of financial backing.
I'd managed to save a few shekels from my corporate career and we had no worries about cash flow in what was a very low cost business model. Many startups simply run out of money before they build their revenue base.

Emma is a voracious learner and she was already an expert in many areas of the business model we decided to pursue.
She was able to convince me at every turn that her strategy for the business would work.

Patience and pragmatism.
We were acutely aware of the fact that we were going to take on the leadership development market, which is clearly one of the most crowded markets on the planet with absolutely no barriers to entry. We understood market segmentation and how to test our content in different segments. We knew that the only way to be successful was to deliver high quality content consistently over time, in a way that created value for our community. 

We had the passion and work ethic that comes from genuinely wanting to make a difference in the world.
Our mantra is income follows impact.

THE ENTREPRENEUR’S CHECKLIST

If entrepreneurs are truly happier, then you want to be an entrepreneur whose business is sustainable in the long term. The increase in the number of new businesses is one thing, but there's no evidence to suggest that this growth will result in a high percentage of successful businesses. I suspect that business failure will be one of the key reasons for people to return to their old source of employment. If you're thinking of tendering your resignation so that you can go off and pursue your entrepreneurial passion, I recommend working through my five-point checklist:

1. Do you have sufficient capital?

Like I said, Emma and I knew that we had plenty of financial resources to start Your CEO Mentor. If we decided to not continue with the business at any point in time, it certainly wouldn't be due to not having sufficient cash–but we were pragmatic nonetheless. We set ourselves milestones and targets to reach as indicators of success. You want to see a trend growth and traction, right from the start. Trend is your friend. 

2. Do you truly understand your market?

Peter Drucker said that customers rarely buy what a company thinks it's selling to them. This is deep, it's worth reflecting on this a little bit.- Do you know who customers are? Do you know how to reach them? Do you know how to solve their problems for them? Do you know how their needs are currently being met? That is, who are your competitors? Knowing the answers to these questions is fundamental for any business to be successful. A great idea isn't enough. The road is littered with the corpses of great ideas that simply weren't executed properly.

3. Do you have proof of concept?

When we first formulated the strategy for our business, Emma and I decided to lead out with a free product: this podcast. Now, we knew that 95 percent of people who consumed our podcast would never spend a cent with us - and that's okay! That's the way the model is supposed to work, but it was the testing ground for our content. If the podcast didn't grow, then that would be a pretty clear sign that people didn't find the content valuable. If our free content wasn't useful, we had no business thinking we should make money from our paid content.Apart from the fact that we are so grateful and humbled to be able to provide ready access to our high quality content, this was also our proof of concept for the business. The day I knew that we actually had a viable business, was the first time that someone reached into their pocket and said - with no social proof to support the decision, mind you - “I think this content is worth exploring further, so I'm going to spend a bunch of my hard earned cash to do the Leadership Beyond the Theory program.” Without this, all we would've had was a satisfying hobby. And we certainly wouldn't still be punching out a weekly episode of No Bullsh!t Leadership.

4. Do you know how to run a business?

This seems a pretty obvious question, but it's an important one. As I said, lots of incredible ideas fail at the point of execution, so be realistic about your knowledge, capabilities, and skill when it comes to business. If you are a great personal trainer, that doesn't necessarily mean that you can run a successful personal training business, and if you bake the best exotic pies in the country, it doesn't necessarily mean that you can run a successful bakery. 

Be realistic about what you know already, and what you have to learn. Think about what skills you have and what you need to hire out of the market in order to be successful. Think about what the risks are when those gaps are exposed. 

5. Are you prepared to go it alone?

One of the biggest adjustments you'll need to make is the move psychologically and emotionally, from the sense of security and belonging that a large organization provides, to being largely alone. This can be super tough. Imagine the adjustment I underwent after I realized that I couldn't just put a team of analysts together to solve a problem for me. I couldn't just throw a thorny commercial issue to the legal team to give me an expert opinion. I didn't have a resident expert in a specialist technical area where I lacked the knowledge myself. If this business wasn't a labor of love that I shared with Emma, I might have found it much more difficult than I did. But we kept each other on track, upbeat and driven, right from the get go. 

As you continue to make choices about your career path and your life goals, think about what makes you happy. Not just your career aspirations, but your relationships, family, health and overall satisfaction. Learning the lessons from the parable of the consulting firm partner and the small town fisherman may help you to frame your decisions. 

Let's face it, with the right attitude you could be happy doing pretty much anything - and I generally was. If we could all just work out what makes us really happy and then do more of that, I suspect there'd be a lot less of the pent up anger and frustration that we are seeing boil over in so many places today. Whatever you do, love the journey and embrace the process.

RESOURCES AND RELATED TOPICS:

• Episode #24: Building Organizational Capability Part 2 - Listen Here

• Episode #36: If Money Doesn’t Motivate, What Does? - Listen Here

• Avoiding Burnout by Streamlining Your Leadership Approach Replay - Here

• Join the Crush Your Career Challenge 2022 - Here

• Buy the NO BULLSH!T LEADERSHIP BOOK - Here

• Explore other podcast episodes - Here

• Take our FREE Level Up Leadership Masterclass - Start Now

• Leadership Beyond the Theory - Learn More

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