Trying to be a Naive Entrepreneur again
If you like this article, check out another by Robbie: From CEO to Student
Once I decided to step back as CEO of Automated Insights, I started to think about what I was going to do next. Should I immediately start another company? Should I consult for a while? Should I take some time off? Ultimately, I chose to take the summer off and go back to school.
I’m in the prime of my career. Why wouldn’t I start another company now and try to repeat some of the success we’ve had with Automated Insights? Two things were holding me back.
First, I wanted some time to dig into the latest AI research. There had been a lot of advances in AI since I attended MIT in 2005, and I wanted to focus on learning and understanding where things are going. I’ve written about why I think AI is different than previous technology waves.
Second, for any new business idea I came up, I quickly convinced myself why I shouldn’t do it. Idea 1 will be too hard to monetize. Idea 2 was tried by a company last year and failed. Idea 3 will require too much capital. etc. etc. etc.
I found my experience was getting in the way (h/t Mark Suster) of me being naive enough to start another company. While there are some distinct advantages, in many ways, starting the second company is harder than the first. I learned a lot about what works and what doesn’t when it comes to building and running a startup over the last ten years, and it was getting in the way of starting the next one.
To be young (and naive) again
The conventional wisdom is that young, early-twenty-something entrepreneurs are the ideal. The thinking goes that young entrepreneurs don’t have the burdens that come with later adulthood like a mortgage, family responsibilities, and particular lifestyle to maintain. They can be ramen profitable and happy while working 80 hours a week, every week. They can “go big” and not risk much.
To a certain degree that is true, but I don’t think it captures a young person’s primary advantage. The biggest asset an entrepreneur can possess is a naive optimism about their idea, and most early twenty-somethings have that in spades.
What do I mean by naive? I like Merriam-Webster’s definition:
na·ive (nīˈēv); adj
deficient in worldly wisdom or informed judgment
You are naive because you haven’t been there and done that. You lack experience in the field. You don’t know what you don’t know. And that’s exactly what entrepreneurs need.
Why is that important? If you knew better, you probably wouldn’t (or shouldn’t) start a company in the first place. Most ideas are not unique. What makes you think this time your idea will work when others have tried before and not succeeded?
I’m not one of those entrepreneurial pessimists that harp on startup failure rates and the difficulty with running a company. Actually, I think being the CEO of a startup is the best job in the world. However, it is a challenging line of work, and a lot has to line up in your favor (including “luck”) for things to work out well.
Being unaware of all the potholes and landmines that can derail you is a major advantage. When it comes to being an entrepreneur, ignorance is bliss. You need to be able to try paths that have been attempted before and failed. In some cases, you need to head to the edge of a cliff not knowing if the next step is a dead-end or the beginning of a new journey.
The same thing happens to physicists
Last year, I read an interview with noted physicist Freeman Dyson where he explained why the great breakthroughs in math and physics happen by people under 30. It’s the same issue as what I’ve described happens to repeat entrepreneurs.
It’s not because older physicists have less mental horsepower but as Dyson puts it: for theoretical physics, I suppose you need to be ignorant. After a while, you get so attached to things as they are.
Here is an excerpt from the interview:
Is physics a young person’s game? It seems that most great discoveries are made by people under 40 or even under 30.
That is true in theoretical physics. Experimenters can keep going much longer and sometimes stay very productive into old age. That’s a very different game. For theoretical physics, I suppose you need to be ignorant. After a while, you get so attached to things as they are.
I thought you’d say we have more brain power when we’re young. But you’re suggesting the problem is we get too set in our ways.
I would say so. Of course, I don’t know how to measure brain power. I certainly am slowing down and that’s quite noticeable. I can’t measure how much brighter I used to be than I am now.
Was there a certain point in your own career when you stopped doing the kind of mathematical physics you had once done, when you decided to go in a different direction?
Yes. The turning point was around the age of 45. The middle-age crisis is when you suddenly become aware of the fact that you’re not as smart as your students. At that point, I decided to spend the second half of my life mostly writing books rather than doing calculations, which was a wise choice. Most people become administrators or do something else then. You have to find another line of work rather than just thinking.
Finding the sweet spot: Being naive while leveraging my experience
After a couple months of evaluating business ideas, I decided that I needed to step back from what I was doing. I needed to take advantage of the expertise and skills that I built over my career, but in a new way that was unlike anything I’d done before.
One option I’ve considered is targeting a completely different market like healthcare. It’s a space I’m not intimately familiar with but is brimming with opportunities. Plus, there are plenty of people that will tell you it’s a horrible industry to start a company in due to the monopolistic incumbents and significant regulatory issues. Sounds like a market ripe for fresh ideas!
I’ve also looked at the parental control market, which has poor solutions today. With two small kids, I have tangible needs around limiting screen time. I’ve never worked in that market before, but I have an idea of what is needed.
I’m not starting anything right now, but once I applied the “naive” filter to potential industries, ideas, and markets, it was easier to come up with some options I can get excited about. I’m finding ideas where I’m bringing less baggage because I don’t know what I don’t know and that’s all I need to know.
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