2020-10-06

Why you should start a company

Why you should start a company

Are you thinking of starting a company? Maybe you have an idea. Maybe you got a small prototype working. But you're still working your fulltime job and you haven't yet started the actual company.

What you need is the last push to why you should start a company.

Starting a company is scary. It's unknown. But it's worth it!

Here is why:

Because You Get Skin in the Game

Without skin in the game nothing matters.

What does it mean to have skin in the game? It means you are taking risks, personal risk. And by taking risk you're performing better.

Without skin in the game, you know that even if you fuck up at work you'll still get the same monthly salary.

You might aswell work at 75% of your capacity, scrolling a social media feed or slacking the other 25%. It doesn't matter if you finish in 1 or 4 days or if you.

If you start your own business everything you do matters.

accountability. Do something for your self.

Because You're Smart

Having opinions without a business costs you nothing.

Having opinions with a business is life or death.

It's easy to stand on the sideline having opinions how other companies should run their business. You might have opinios about what strategy they should have or what to focus on. It's easy for you to have these opinions, because they involves zero risk.

If you're thinking of starting a business you're smart. Or atleast you think you're smart (you probably are). You think you're smart becuase you think that you can execute this idea that you have and that your business will be profitable. You don't think joining a similar business is worth it because you know that you are able to make better decisions and execute better than those competitors.

Because you get freedom

Having you'r own company comes with a lot of freedom. That freedom can be both liberating and scary.

Without freedom it's easy. Someone else has made all the hard desicions and is probably taking the risk of those decisions. You can just do as you're told and you'll be fine.

The downside is that the decisions being made might not be the best onse. They might be flat out wrong. But since you don't have the freedom, you still need to execute on the decisions.

Having your own company means you have the freedom to do whatever you want. You can make any decision and execute on.

But, your company will not be long lived if you decide to eat ice-cream and watch Netflix every day.

You have the freedom, but you also need to take responsibility for the decisions.

Because you can optimize the right things

If your working at a big company there's a big chance you're optimizing for the wrong things.

Heres's the good thing: It's not your fault!

You're optimizing for the wrong things because of incentives, bad incentives.

Here's the good thing: It's not your fault. You are just acting on bad incentives which is just natural.

The bad thing is that you're optimizing the wrong things.

Here are some thing's you shouldn't optimize for:

  • Being in time even if no one depends on you being in time.
  • Being at a specific place even if no one depends on you being at that specific place.
  • Looking good in front of co-workers

In fact, all wrong optimizations can be boiled down to two things:

  • Looking good infront of other people
  • Following rules

It can be good to keep regular scheduleds (time) and specific work places (place). But they should be picked so that you can perform at your maximum level. Not because a boss bade up some rules 25 years ago.

Instead, you can optimize for the right things:

  • High personal energy
  • Personal learning
  • Long term value
  • Long term profit

What about money?

If you want money, go rob a bank. Starting a business is about creating value. You know when you have created value when someone is paying for your service or product.

If you start a joint-stock company (Aktiebolag) in Sweden it's actually by law that your company's purpose must be to yield profit to the owners of the company. I would presume it's similar in your country.

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Johan Eliasson