Entrepreneurs are the lifeblood of America. They create businesses, jobs and wealth. It’s what the American Dream is all about and why so many come to this land of opportunity.
It’s for this reason I applaud Adeo Ressi, creator and leader of Founder Institute, a mentoring program to help aspiring entrepreneurs climb the ladder of success.
It’s a four month training program with the participation of highly skilled entrepreneurs that serve as mentors. The Founder Institute operates in 17 cities worldwide.
Here in Los Angeles tonight a new class of 40 students received their orientation, which I attended as an observer. Ressi began by giving the new crop of students every reason to drop out now.
“Dropping out is good,” he said. “If you’re not ready don’t do it. The faster you get out of pursuing something that‘s bad for you the better. This is not a glamorous lifestyle. Even when everything is going well it’s hard.”
It seems that many budding entrepreneurs would do well to follow Ressi’s advice, judging by some stats he put out.
About 25,000 technology companies are started each year, “and 60% die right away,” he said. Another 23% actually launch their company “and then die.” About 11% achieve some success but only 6% actually get outsider funding. When it’s all said and done, just one in 1,000 hit a home run.
Ressi said graduates of Founder Institute have a much better success rate but didn’t stop trying to dissuade them from going forward. He quoted Elon Musk, who has launched many companies that include PayPal, SpaceX and Tesla Motors. Musk said starting a company “is like eating glass and walking over hot coals at the same time.”
Musk says he routinely works more than 100 hours per week running Tesla and SpaceX. Ressi estimates that he works 80 hours a week, travels 100 days a year and only has time to spend about 10 hours a week with his family. He books his own travel, flies coach and mostly works out of a garage. In the early years, if you’re lucky, expect to make about $75,000 a year. And it’s a journey that, if successful, might take five years before that is clear. If you’re not willing to eat, breathe and constantly focus on the business, let it go. Also, no whining allowed.
“It’s not an easy profession to choose,” said Ressi.
The Los Angeles unit of Founder Institute is run by Ken Rutkowski. I personally know Ken and admire is passion for helping people succeed and bringing his large network of professional associates to get that done.
So then, why do people do it? That’s not an easy question to answer.
As a technology journalist I have interviewed many entrepreneurs. They are some of the most dynamic, friendly and interesting people on the planet. And most, in my view, do not do it for the money. Their desire to build seems to outweigh the financial benefit. They just love to create. Many are altruistic and philanthropic as well.
I have long wondered what are the defining characteristics that mold this select and rare breed of human willing to risk everything to start a business, and repeat that cycle over and again. They come from diverse backgrounds, rich and poor, some with pedigree education and others who dropped out of school. They have no fear of failure and take bold steps when most people are satisfied living paycheck to paycheck.
Whether the current class of Founder Institute in Los Angeles will live up to these traits we’ll see. It’s just good to know that some people are willing to take that chance, because in the end we all benefit.