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By Pete McConnell, Commtract Founder & Executive Chairman who serialises his start-up adventures in a monthly column for the AFR.
Two years ago, I promised to serialise my adventures in start-up land. An access all areas, no hold barred, warts and all account of my transition from corporate boardroom to shared working space.
Reviewing my columns, I can only conclude it’s been a promise broken.
My columns tell of a collaborative and creative world, of positivity and purpose, and of fun and financial success.
Scant are the words about long hours, dwindling bank balances and technology-induced frustrations. The latter can rival the stress levels of anything experienced in politics or business!
The truth is I have succumbed to that very human tendency to write with rose coloured lenses.
A successful founder recently mused with me whether he had an obligation to pin-prick the dreams of inspiring entrepreneurs.
What should he do when a young cherub corners him at cocktails, only to reveal a concept that is destined for the dustbin?
Should he encourage their conviction and wax lyric about the power of dreams, or should he inject a dose of reality and talk up the benefits of having a day job?
No one wants to be the harbinger of bad news but perhaps there is room for a little more honesty in the tech sector about the trials and tribulations of establishing a business.
It could start with one very basic fact – 85 per cent of start-ups fail.
And I am defining success as a sustainable, profitable business – not billion dollar, “unicorn” status.
Contrary to popular belief, that failure statistic applies even when your idea is without peer, and your execution skills are without rival.
The tough talk could also continue to cover exit options.
At business plan stage, words like “three to five-year exit plan” literally drip on to the PowerPoint. In practice the words “pigs might fly” spring to mind.
Australia’s most successful tech companies – Atlassian, Canva, Campaign Monitor – all share one thing in common. They were overnight success stories decades in the making.
And the truth train certainly shouldn’t stop when it comes to reward and remuneration.
Some wag recently told me that this year Silicon Valley issued more employee shares than Wall Street paid in bonuses.
They neglected to mention the key difference. Bonuses are paid in cash.
In terms of liquidity, long-dated share options in risky technology ventures rank right up with crypto-currency and Monopoly money.
Let me say with the authority of firsthand experience that a stint in start-up land has huge benefits.
It’s the modern-day MBA for professionals looking to learn about adaptability, low cost delivery and executing at speed.
It changes your world view by forcing you to think about life after the next horizon, and perhaps the dozen horizons that follow.
However, if your motivating ambition is more about gracing the cover of the 2019 AFR Rich List, I strongly encourage more due diligence.
There is a reason that this year’s list has property moguls outnumbering technology titans about 10 to one.
This article was originally published in the AFR on June 13th 2018.
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