Your Mileage May Vary

By Brian W. Smith ENG’98/GR’01/WG’08, CEO of Simulation Systems, Inc.

The man on the cover of the business magazine is trim, wearing a navy bespoke suit and tortoise shell glasses. His appearance conveys prodigious wisdom despite his obvious youth. He leans casually against the door jamb of his office, arms folded, his company’s logo frosted prominently onto sleek glass paneled walls. His pose is casually confident. He could be a consultant or a banker, yet a loosened necktie and brightly colored socks suggest something more hip and less conformist. Above the glossy photograph, a headline beams “$30 Million Before 30: Young Entrepreneurs and How They Did It.”

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I look up from the magazine at the clutter of paperwork overflowing the “desk” that doubles as my kitchen table. Financial statements. The latest technical report from my engineering team. Proposals and pitches in various states of completion. My email inbox is a bottomless vortex, dooming all that enters to potential oblivion. The clock reads 1:33 am. My net worth isn’t yet $30 million, but I do have a nice cup of tea to soften the blow.

Wow, this isn’t at all like the magazine cover.

Reality check: running a start-up is hard. The depiction we are often fed by the media—of 20-something CEOs in opulent executive suites playing video games on the conference room flat-panel—is aspirational. Those who make it have labored to get there, and they’re breathing rarefied air.

At Wharton (and in life), we become adept at dissecting cases to figure out what does and does not work, and then applying these insights to future situations. But we cannot always see the failures, the false-starts, and the struggles from which we can learn best. In retelling the stories of victory, these pivotal plot elements are often glossed over. This is a shame, because when you start a business, you will spend much of your time in “the throes of entrepreneurship,” and success is predicated on managing these challenges effectively.

In short, you can’t learn how to run a marathon by studying only the last mile of the race. With that in mind, here are some pearls I’ve picked up on the path to that final mile.

There is no formula. Flee from anyone who tells you that there is a “right way” to do something. Building something new is, by definition, an innovative pursuit that requires creativity—with your business model, your financing plan, your hiring strategy. By all means welcome and assimilate good advice, but know that you will need to be nimble.

You will sacrifice more than you initially think. Life in an early-stage company can be monastic and Sisyphean. Your salary will be less than it could be elsewhere, you will not have all the baubles you would like, and you must be able to stomach this as you watch friends and family achieve status in more traditional careers. You will not sleep for extended periods. Expect to fail (you will), and accept that failure can lead to short-term setbacks in your personal goals. Financial outcomes will happen, but they will take time, and liberal patience is warranted.

It’s a team sport. I’m not talking about your co-workers or business partners. The decision to become an entrepreneur will affect your family and those closest to you in a deeply personal way. They will be called upon to sacrifice too, so you had better be sure they’re on board. There will be dark places along the path, and you will need their emotional, and perhaps even financial, support to make it through.

Have a clear picture of success. It can’t always be measured by a financial ratio. One of the great appeals of entrepreneurship is the relative freedom it provides—flexibility, creative and intellectual control, the ability to be your own boss, and permission to do what you love. For most entrepreneurs, these are critical components of success, yet you won’t see them reported on any salary survey, and it’s easy to lose sight of them amid the day-to-day noise.

Starting a business isn’t all glitz and glam—this mentality is dangerous, and it pervaded the late-1990s dot-com bubble at its very end. Sure, there are rock stars, and they should be celebrated and studied. But most of us will not start businesses that generate 50x returns in 3 years. Most of us will run through several companies before we hit upon the elusive exit. Most of us must be prepared to enjoy the trip without being in such a hurry to reach its end.

So why do it at all? There are as many reasons as there are entrepreneurs. The thrill of the hunt. The gratification that accompanies creating something new and doing what has never been done before. The opportunity to have a meaningful impact on society. The comprehensive experience you gain by being both the CEO and the coffee fetcher. Or, in the purported words of George Mallory upon being asked why he wanted to climb Mount Everest, simply “because it’s there.” It can be hard to quantify the pursuit of a passion, but there’s a reason it’s called the entrepreneurial bug.

And besides, a 10x return isn’t too shabby either.

Brian SmithBio: Brian Smith is presently leading one life science start-up (a virtual reality company developing simulation models for microsurgery) and assisting a second (a drug discovery company using computational biology to design first-in-class treatments).