If I could only recommend one book, okay, say somebody's only they're only going to take time to read one biography, autobiography of an entrepreneur, I would recommend James Dyson's first autobiography. His mantra that he would repeat over and over again is like difference for the sake of it. So his point is like he really liked attacking markets that he didn't have to create. So there's already existing products, people understand the value of it, they're already making the purchase. So his whole point is like the only way to succeed in an existing market where it's full of incumbents was by being different. There's no point in an existing market to just be the 10th or 12th or 14th player. It's going to be dominated by the first or the second or the third best company, but you can build a business just by being different.
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Welcome to Prof G on Entrepreneurship, a special three-part series about starting a business, building wealth, and what it takes to succeed on your own. Today, we're joined by David Senra, historian and host of the Founders Podcast. Together, we'll answer your questions about what drives the best entrepreneurs, how to compete with established players, when to take risks or cash out. David, thanks for joining us.
You're very welcome. All right, let's jump right into it. Question number one comes from Gen Z Advice on Blue Sky. They ask, "What motivates the best entrepreneurs? Ego, legacy, family, strictly money? Who tends to last and who tends to crumble?" David, thoughts?
Well, I would say that if your goal is to build a durable business and you're looking for your life's work, some of my favorite entrepreneurs on this, like Steve Jobs, I would say Elon's into this, like John D. Rockefeller, Henry Ford. Usually it's a lot of people think people get into entrepreneurship for money, and obviously it is a good path to wealth creation, but they're on some kind of mission or they have some other primary goal. So on my desk is an organizing principle to myself. I have three words that Steve Jobs would repeat when he was 20 and repeat decade after decade. He would repeat these three words when he was dying, which was insanely great products. And so for him, the organizing principle, the reason to start Apple, is just the whole point of having a company is just so he can build insanely great products. That was his main goal when he was 20. It was still his goal when he was dying from cancer. So if you're talking about somebody who's going to do something for decade after decade and build something that hopefully outlives them, I think what the main motivator is they feel what they're doing is really important and they have a mission that's larger than themselves is how I'd answer that question.
David has more empirical data. Mine is just anecdotal. I haven't worked for anyone else since the age of 24. When I got out of UCLA, I did the tier analyst program at Morgan Stanley. And since then, I've started my own companies and done my own thing, other than I've been a faculty at NYU for 22 years, but I'm largely kind of a free agent there. So we tend to romanticize entrepreneurship. I would argue that my venture into entrepreneurship was more self-awareness and a recognition of the assets and attributes I did not have. To be successful in a corporation, you have to be politically savvy. You have to be patient. You have to actually be quite mature because the only thing I can guarantee you working for a corporation is a series of small and big injustices. People will get promoted over you that don't deserve to. Projects you're working on will get cancelled and you can't even find out why they were cancelled. So, but if you can navigate that and put up with it, the US corporation is still the best place to get rich slowly is what I found. There's never been a wealth generator like the US corporation. I recognized fairly early at Morgan Stanley I did not have those skills. If people went into a conference room, I would think they were talking about me. I literally did not have the maturity to handle a lack of information. And I recognized that the only way I would be happy would be to have control and start something. And also I wanted to play to my strengths. I'm very risk aggressive. I like to sell. Entrepreneur should be the first synonym for sales. You're always selling. You're selling people to join your company. You're selling capital. You're selling customers. You're selling clients. Then you're selling key employees to stay with you after they get an offer from Salesforce. You're constantly selling. And you're willing to take risks, specifically the risk around public failure that most people aren't. So for me it was just an assessment of not only what attributes I had and the opportunity, but quite frankly my deficiencies. The people who tend to crumble are how do you handle public failure? I have a lot of friends who are wildly successful coming out of business school in the '90s, went into the alternative investment space, and their fund gets closed down or they start a fund and it doesn't work, and they just get stuck like they've never known failure. So your ability to mourn and move on I think is really the kind of the attribute because if you start several businesses, many or most of them are going to fail. So many moons have to line up for a business to be successful, and then the key is what do you do after you failed? Do you get stuck? True entrepreneurs are sort of like, okay, this didn't work, next. So the undergrads at NYU typically make better entrepreneurs because if someone has decided to go to business school, it means they're sort of risk-averse and taking a more certain path. But yeah, my venture into entrepreneurship was a function of 70% of entrepreneurs are entrepreneurs because they have no choice. If you immigrate here from Korea without the certification of an education, you don't get to go to work for Google or JP Morgan. You start a small business. So anyways, I think it's honest self-awareness around if you're really cut out to be an entrepreneur. Any thoughts before we move on to two, David?
Yeah, I think my favorite quote on this again comes from Steve Jobs. He just says that like half of what separates the successful entrepreneurs from the unsuccessful ones are just pure perseverance. It's exactly what you said. It's kind of they're impervious. It's like, yeah, this is a problem. That's okay. I'll just get back up and try it again, do it over and over again. I'm a big fan of MMA and I actually think there's a lot of analogies from sports that are helpful in business. And I heard one of these guys in the UFC said one time, his strategy where he has his advantage is like, I need to get my competitor on their back. So I need to do a takedown to get to my best position, right? And my opponent's goal is to stop me from getting there. So they stopped my first takedown, that's fine. He's like, you stop the second one, that's fine. You stop the third one, that's fine. Get ready for four, five, six, seven, and eight. And his whole point is just like, I know what I need to do and you can play defense on this, but I'm going to keep doing this until essentially I die trying. And I think a lot of entrepreneurs are like that. And I loved the point that you made where it's like, well, a lot of this is out of necessity. You know, if you immigrate here from Korea and you can't get a high-paying job, then you might want to start, you know, a restaurant or start washing cars or doing something, anything that you can do on your own without permission, I think is the key there. This is advertiser content from Xero.
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Question number two comes from a listener who emailed us. A lot of founders seem to have given up their health, marriage, or kids for their company. Is it possible to build something big and also have a life outside it? Did...
Yes. But the same kind of personality type that wants to build something big usually doesn't want to do anything else. On my other show, where instead of just reading history's biographies of history's entrepreneurs, I started having sit-down conversations with them, and I just released an episode recently with this guy named Nick who runs Revolut, and it's the largest private company in Europe, like $15 billion valuation. And in the episode he says, you know, 99.5% of my time is spent on work. And in the comments some people are like, yeah, but he's missing, you know, time with friends and going for a walk in the park. And it's just like, well, that kind of personality type is not interested in going for, you know, barbecues and ball games. He found his mission in life. He has excessively high agency. He's just kind of chasing after this with like this monomaniacal focus. There's a ton of examples from the history of entrepreneurship of people building big things. So Sam Walton is one of my favorite entrepreneurs. I think his autobiography is like essential reading for anybody. And you know, he still found time in his day. He'd work from the time his eyes were open till the time they closed. But he would take breaks throughout every day. So he liked to hunt with his dogs. He'd like quail hunt during the day and he liked to play tennis. So if you look, let's say he's awake for, you know, 17 hours a day. He's probably working 15 of those hours, but he's still making time to try to have dinner with his family, to, you know, get exercise, to do the activities he wants. It's much more of... Jeff Bezos has this line where he doesn't believe in work-life balance. He believes in work-life harmony. And I think that's what you see. Now, with that being said, there's way more examples of people destroying every single other element of their life for business success. There's this book by this guy named Larry Miller, and it's called Driven: An Autobiography. He was writing it when he died. Larry Miller was the richest entrepreneur in Utah. The average Utah citizen could not go a day without spending a dollar in one of his businesses. So he owned from car dealerships to movie theaters to restaurants. He just owned a ton of businesses. And he wrote that book as a cautionary tale because he ignored his health. There was such poor health as he's writing the book. They're literally having to chop off parts of his body. He's having... because his circulation is so bad, diabetes...
And then he talks about, hey, I don't know who my kids are. I don't have a relationship with my wife. And it's a devastating, devastating story. He's writing. He's like, I'm in a 30,000 square foot house on top of a mountain overlooking the town, the city that he lives in. He's like, it just none of this mattered. And he goes, "And the worst of all, I didn't even have fun." And the last chapter is actually written by his co-author and his wife because he dies in the middle of that book. And his wife, I said, thinks... I think his wife says the most devastating thing you could ever hear. And she's like, "Yeah, I miss him, but it's not like he was here when he was alive." Anyways...
Yeah. So through the lens of an entrepreneur, look, I often joke that, and this is true, from the age of 22 to 42, for 20 years, maybe 25 years, other than a 2-year respite in business school, I did nothing but work. I pretended to have hobbies, but I didn't. Occasionally I would work out, or I've always tried to stay pretty disciplined about that, but I wasn't a very cultured, interesting person. I just worked all the time, and I say it cost me my hair, and it cost me my first marriage, and it was worth it. I don't think there is any balance. There's just trade-offs. And the reason why I have so much balance now is because I had very little as a young person, and I don't think there's any getting around it. The market is very efficient in trading off stress and commitment for upside. And if you want tremendous upside or a shot at tremendous upside that entrepreneurship does offer, success is in the last 10%. And there's an equivalent entrepreneur, an equivalent small business down the street or down the state or down the country that is working harder than you. It's like Brian Chesky says, you can have it all. You just can't have it all at once. And occasionally, and this does create tension with my partners in my life. The kind of feedback I get is, "Where are you? You're just not present." And I'm like, "Okay, see this big fat [__] house we're in? The reason we're in this big fat [__] house is because I'm not present. Because I'm thinking about business because I am and going to be better than anyone on Monday morning." And that's come at a cost. I'm not here with a message of hope. If you expect to have a successful small business or you expect to be very successful even in a corporation in a capitalist economy, get ready to work your ass off. And it comes at a cost. Now, having said that, that's my way. I'm not saying that's the right way. There's a lot of people who do well, don't need to be the CEO, don't need to start a hedge fund or a tech or a SaaS company, and they move to a lower-cost area, they do well, find someone who's also competent, they manage their finances well, they go to church, they coach little league, they take nice vacations, they have really nice lives. And by the way, I'm not sure they aren't the smart ones. I get it. Most successful entrepreneurs are wired such that they are constantly at the office. Now the challenge is that once you get to a certain level of economic security, and it sounds like the individual from that book never did this, I have purposely said, okay, I did this for economic security. I wanted to take care of my mom. I wanted to take care of my family. I wanted to be more interesting to strange men and more attractive to strange women. That's why I wanted to make a lot of money, and I saw the blue flame path there was being an entrepreneur. Once I got to the point where I had economic security, I purposely tried to, and it wasn't easy, and I still have a difficult time with it, get off the hamster wheel and enjoy some of the fruits of my labor, specifically balance, specifically time with kids, specifically getting involved in some things bigger than myself that I could have an impact on, trying to spend a little bit more time giving yourself to other people. And you know, being kind, it's not a big effort, but it takes time. Being philanthropic takes some time. Being a good dad takes real time, but there's no getting around it. It's not like you can flip off a switch. When everything good that has come to you has come from working harder and busting your ass on Saturdays and Sundays since you were an adult, it's not like you go, "Oh, I'm here. I'm going to stop." Just have an honest conversation. Where on the continuum do you want to be? If you want to be in the top 1% in terms of influence and economics, then come to grips with the fact that you're probably going to be in the top 1% in terms of stress and sacrifice. And maybe that's not where you want to be, and maybe that's not the right place. But entrepreneurship is for me... I used to go in on Sundays for morale because we were all there on Saturday, and the people who showed up on Sunday, I wanted to show them that I was in it to win it as well. But it is not for the faint-hearted. It requires... and but it's true. I don't care if you're Beyonce or Barack Obama or, you know, Dario Amodei. These people are working around the [__] clock because they're not satisfied. They don't want to be a backup singer, a VP at a tech company. They want to have extraordinary success. So anyways, an honest conversation with yourself around really what your... if your desires match to the requisite commitment. Any thoughts, David?
Yeah, I actually have a question for you, Scott, before we move on. Why do you think... why did you say that it cost your hair and your first marriage and it's worth it?
I have an extraordinary life now. I'm relevant. I get to do whatever I want. I get to spend a ton of time with my kids. I have an absence of stress which makes my partnership stronger, my friendship stronger. I can walk the walk and give money away. I just have a wonderful, rich life right now. And as someone who wasn't smart, who was not smart enough to be born to rich parents, I would not have this richness of life now unless I had made that type of sacrifice as a younger man.
Yeah, I think something you hinted at too, which is probably true. I think in many cases, like the archetype and the personality type that chooses the path of entrepreneurship for their life's work, it's like they don't have any... it's not a choice. I don't know much about Jordan Peterson, I haven't seen any of his lectures, but I saw a clip one time that definitely backs up... you know, I've spent 10 years reading 439 now biographies and autobiographies of famous entrepreneurs, and he said that successful men are insane, that even if you put them in a forest somewhere with nothing to do, they'd walk around with an axe trying to cut down trees. They just have to have some kind of activity. And I thought that was like a great summary of, you know, these extreme personality types that build these companies.
Yeah, I think that's right. And I think a lot of it's in the batter. I have one son that is studying biology and I'm pretty sure he's going to be a professional either in research or some sort of graduate school. My other son is waiting in line at 8 in the morning on a Saturday to buy a Pokemon card, rip and drop, and then going on AI and trying to sell them at a 30% markup. Like that kid's an entrepreneur. We just didn't treat him that differently. There's something in the batter about entrepreneurs and non-entrepreneurs.
Well, this is interesting real quick. In Sam Walton's autobiography he talks about, you know, did a lot of people expect if you're a successful entrepreneur that you try to direct your kids into the same path? And he was just like, I knew I was a fairly overactive fellow, that's the direct quote. He's like, I don't think I birthed... what's the chance I sired five... like I'm a once in a... probably he probably understood, he's like once in a generation talent, like what's the chance that my kids are going to be like that too? He's like, I didn't put pressure on them, they can do whatever they want.
