Top 5 Reasons to Not Become an Entrepreneur

mattinglot.com

Yesterday I promised to even things out in my post on the Top 5 Reasons to Become an Entrepreneur. Today I write on why not to become an entrepreneur. This is a tougher topic for me to write authentically as I’ve been playing entrepreneur for the past four years and have no real desire to turn back. Consequently this article took me twice as long to write. I also found myself elaborating more as I poured more and more thought into each point. The result is what I feel are the top 5 cons of entrepreneurship.

#5 The Work

Put simply it never stops. As an entrepreneur you cannot ever run out of things to do until the business is gone. If you aren’t busy ordering supplies, tracking inventory, getting the books in order, finding customers, finding advertising space, working out glitches in the product, negotiating with a supplier, negotiating with a customer, seeking funding, optimizing your website, figuring out payroll, or one of thousands of other tasks out there then you can be refining your business plan to maximize growth.

In some periods I put as many 15 hours a day into my business, and looking back I didn’t always get 15 hours of work out of it. The book Getting Things Done is one of the key materials that has taught me how to make the most of my work time and allowed me to have a personal life at all. I am in the process of reading it for the third time and can partly attribute so many successes to the advice in it. For $10 it’s practically free.

#4 The Investment

A business isn’t started for free. The financial commitment can be significant if you are opening a store or be as little as the cost of a domain name and web hosting (if you seek these things for a business venture then get in touch with me). The former is a lot more likely than the latter, so there is start-up capital you must find and odds are its coming out of your pocket or a loan secured by your most prized assets.

However the money invested is only part of the equation. You also have to examine your opportunity cost. What is your next best alternative for the money and time you put into the business? What kind of retirement fund will you have on a $5000 investment with the power of compounded interest? What sort of income are you losing by putting your time into this venture instead of your next best alternative?

#3 The (lack of a) Pay Cheque

A regular pay cheque is a lovely thing to have. It pays bills, buys food, and makes sure you can always get those nice consumer comforts like the latest gadget or DVD. With the popularity of direct deposit, money just “appears” in your account every two weeks.

When you are starting up such a regular pay cheque is very difficult to get. If you are lucky enough to have an outside investment that pays you a salary or have enough revenue coming in to be able to always pay yourself a certain amount (and invest the rest in the business) then you at least have regular income in the short-term. In the long-term the only way that cheque will keep coming is if your company continues to succeed.

Most likely you will be taking a severe pay cut, and without outside funding you are risking no money coming in at all. Unfortunately the companies issuing your bills won’t be very understanding about this.

#2 The Risk

You take on risk when you start a business. This risk, like with other investments, is why that coveted upside exists. Points 3 and 4 wouldn’t be a big deal if you were always guaranteed to succeed. Instead you must do your absolute best, make the decisions you believe are right, and accept that your life will be pot marked with failures (and valuable lessons).

I had the opportunity to listen to Jim Estill speak recently, and one of the major points he emphasized was “Fail Fast and Fail Cheap”. You cannot avoid taking risks in business, and consequently you can’t avoid failures.

#1 The Discomfort

As human beings we tend to find change uncomfortable, but there isn’t much room to be in a placid comfortable nook when you’re an entrepreneur. You must constantly be willing to try new things, make decisions without nearly enough information, and the worst fear inducer of all, take risks. The very nature of this kind of life prevents you from hitting the standby button on your brain and just slogging through the work handed to you oblivious to its meaning or consequences (not that this is how all employees work all the time - it’s just you have that beautiful option). Having to constantly grow, change, and do things out of the ordinary can bring on terrible fear along with excitement. Your outlook on life, the acceptance of your previous “40 hour work week” peer group, and the role you play in determining your future will all be drastically different.

Every other entrepreneur I have spoke to mentions that entrepreneurship is a roller coaster of emotions - it will be the source of your highest highs and your lowest lows. That’s definitely been the case for me and every business owner I have ever met. Riding a roller coaster 24 hours a day… not something everyone wants.

There’s are a lot left to hit on the entrepreneurship issue. Stay tuned for part 3 where we break away from lists!

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Top 5 Reasons to be an Entrepreneur

mattinglot.com

April 7th, 2006 by Matt Inglot

Something that I am asked every couple weeks is “why entrepreneurship?”. This is a question that always makes me hesitate, and I’ve noticed that my reply is never exactly the same. Yet deep down I know it’s what I love and would do even if the world was topsy turvy and making a lot of money through entrepreneurship wasn’t possible.

Let’s examine the decision to be an entrepreneur. It’s a complex topic so I’m going to break it down into a few posts exploring the benefits, disadvantages, misconceptions, and motivation behind entrepreneurship. I recently read that lists are more likely to attract traffic and since I have neglected the blog this week let’s begin with what I feel are the top 5 reasons to be an entrepreneur:

#5 There is an Upside

There aren’t a whole lot of categories that most of the world’s rich fall into. Inheritance, real estate, and business are the main three as we learned in New Venture Creation at WLU. It’s hard to be born rich or inherit the family farm, but business unlocks a path to real wealth potential. Whether you build it up to a multi-billion dollar venture yourself or sell while it’s hot, there is definitely money to be made. But is it all about cash? That’s a topic for a future article.

#4 If You’re Bored You’re Doing Something Wrong

Running a business is an incredibly diverse “field” to be in. Through my ventures I have been exposed to incredible and interesting knowledge ranging from business fundamentals such as marketing, accounting, sales, and customer service to the importance of time management, goal setting, and even exercise. I literally view the world in a completely different light now than before I became involved in business. Everyday I find myself learning something new and being immersed in a different and new area. You can’t get much further from an assembly line than this.

#3 It’s More Satisfying than Roller Coaster Tycoon or Sim City

I’ve always enjoyed playing simulation games. While Doom was the hot item with most of my friends I really prefered Sim City and other empire building games. It’s an incredibly satisfying feeling to start with nothing and end up with something absolutely amazing. I believe in seizing this building attitude and applying it to life. Afterall why should I build a virtual company when I could apply the same concepts to real life? Treating life as a game may sound silly as first, but frankly I’m having a lot of fun.

#2 Thinking is Rewarded

Running a business may be hard work, but that’s certainly not what you are rewarded for. Often times burning the midnight oil is simply the bare minimum for entry into business. Your returns come from working smart, and the quality of your ideas and creativity are now directly tied into your revenue size. A single good idea can make you $10 000 in one hour while slaving away for 40 hours on a bad one can have virtually no return.

While working a regular job isolates you from the risk of no return on bad ideas, it virtually nullifies the incredible return on good ones. Imagine coming up with a way to save your boss $30 000. You’ll be lucky to get a $500 bonus, and in all likelihood you will receive nothing at all.

#1 Success is in Your Hands - A Whole New Job Security

Headlines constantly barrage us about the lack of job security in so many sectors. GM and Ford are both laying off masses of people. I’m only 21 and I have already been laid-off twice. I’ve also only ever been an employee twice. Having a job these days, even with a massive company, provides only the illusion of security. Why let your well-being depend on the decisions of a CEO, whose absolute #1 priority isn’t your future? Ensuring your own prosperity and achievement of your goals is ultimately the responsibility of one person and one person only - you.
We’ll even things out in the next entrepreneurship post when we discuss the multitude of reasons to not be an entrepreneur.

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Five reasons NOT to use Linux

Five reasons NOT to use Linux

Steven J. Vaughan-Nichols

I love Linux. I use it on my servers, I use it on my desktops, and I use it on my entertainment center, where it powers my HDTV TiVo and my D-Link DSM-320 media player, which turns my network into a media library with terabytes of storage. Heck, I even run Linux on my Linksys WRT54G Wi-Fi access points, which hook the whole shebang together.

But, Linux isn't for everyone. Seriously. Here are my top five reasons why you shouldn't move to Linux . . .

Reason number one: Linux is too complicated

Even with the KDE and GNOME graphical windowing interfaces, it's possible -- not likely, but possible -- that you'll need to use a command line now and again, or edit a configuration file.

Compare that with Windows where, it's possible -- not likely, but possible -- that you'll need to use a command line now and again, or edit the Windows registry, where, as they like to tell you, one wrong move could destroy your system forever.

Reason number two: Linux is a pain to set up

It's true. After all, with modern Linuxes like Xandros Desktop or SimplyMEPIS, you need to put in a CD or DVD, press the enter button, give your computer a name, and enter a password for the administrator account.

Gosh, that's hard.

On the other hand, with Windows, all you have to do is put in a CD or DVD, do all the above, and then immediately download all the available patches. After all, Symantec has found that an unpatched Windows PC connected to the Internet will last only a few hours before being compromised.

Unpatched Linux systems? Oh, they last months, but what's the fun of that?

Reason number three: Linux doesn't have enough applications

Really now. I mean, most Linux systems only come with secure Web browsers, like Firefox; e-mail clients, like Evolution; IM clients, like GAIM; office suites, like OpenOffice.org 2.0; Web page editors, like Nvu; and on, and on, and...

Microsoft, on the other hand, gives you Internet Explorer and Outlook Express, the most popular Web browser and e-mail client around -- even though they do have a few little, teeny-weeny problems. Of course, Windows also has an IM-client, Windows Messenger, which, come to think of it, has also had some problems.

And, Microsoft also has Microsoft Office, which -- oh wait, you don't get that with the operating system, do you? You also don't get a Web page editor either, do you?

Well, still, with Windows you get so many more choices of software, don't you? Like Lotus 1-2... oh really? I didn't know that. Or, WordPerfect... oh, pretty much dead too.

Still, so long as you want to run Microsoft programs at Microsoft prices, Windows is the operating system for you!

Reason number 4: Linux isn't secureIf

Microsoft says so, it has to be true! So what, if you can scarcely go a week without reading about yet another major Windows security problem in our sister publication, eWEEK.com's security section! Who would you rather believe -- Microsoft, or your own eyes?

Reason number 5: Linux is more expensive

Are you calling Microsoft a liar? Those nasty Linux companies, like Red Hat or Novell/SUSE charge you a fee for support. Others, like Linspire sell you the product. How dare they, when you can download free, fully-functional versions of almost all the Linux distributions.

Your computer, on the other hand, almost certainly came with Windows pre-installed! For free!

Oh wait, it's not free? Windows' actually makes up a large percentage of your PC's price?

Hmmm. Well, still, it's already on there, and it has everything you need.

Right? Of course, right!

Except, of course, you might still want to buy an anti-viral program (Norton Anti-Virus: $40), anti-spyware software (McAfee Anti-Spyware: $25); and a full-featured firewall (Zone Alarm Pro: $35). But, hey, who needs those when you have a secure operating system like Windows!

And so...

When you really think about it, you can see why there are lots of reasons not to use Linux.

There just aren't any good ones.
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5 Reasons Why Video Downloading Services Won't Catch On

5 Reasons Why Video Downloading Services Won't Catch On

sportslizard.com

I've been offered a sweet gig to write one article a month for Thumbshots.org. Since the articles will be e-commerce releated, I figured I'd publish them here too (yes, they've given me permission to do so). Anyway, here goes:

With the recent announcement of Amazon's Unbox movie downloading service and Apple's announcement that iTunes will now be selling movie downloads, many people seem to think that the future of purchasing movies lies online. And why not – it's a logical jump. We went from radio to television, CDs to DVDs, so why not go from MP3's to MPEG's? When something works with music, the video counterpart usually follows with the same success. But in this case there are several fundamental flaws that both Amazon and Apple failed to address with their services that will make it difficult for video downloads to follow the success of music ones.

1. Download time and file size

While it only takes a minute or two to download a 5MB audio file, 2GB video file can take several hours to download. It may feel like you are getting your music instantly, but it sure doesn't feel like your getting your videos instantly. If it's quicker to drive to your local Best Buy, pick up a physical copy and burn it to your hard drive, why would you bother downloading it?

Also, how many people do you know with 200 GB of empty space on their hard drives? I don't know about you, but I've got over 100 DVDs in my movie collection and that would take up a ton of space. Yes, hard drives are getting cheaper, but most computers still don't come equipped with the kind of space required to hold a library of movies.

Even more importantly, one of the key components of the digital music revolution is the ability to keep your entire library on your iPod/MP3 player. Right now, even with Apple's new 80GB iPod, that's still not possible for the hardcore movie fan. While few music collections will ever exceed even 30GB, it's not inconceivable to think that you would need a 300GB iPod to house your entire movie collection. Having digital copies of all of your movies won't truly be necessary until your iPod can legitimately become your personal entertainment device with all of your music, photos, and movies (in high enough quality and with enough battery time so that you can directly play your movies from the device on to a TV).

2. Cost

Most movies on Amazon will go for $7.99 to $14.99, and movies can also be rented for $3.99. New releases on iTunes will sell for $12.99 on a pre-order basis and $14 thereafter. Older titles will sell for $9.99.

Ignoring for a second that you can download illegally ripped versions of any movie, what would compel a user to pay $15 for a restricted file that has less-than-DVD-quality? If you want a digital version, it's still much more cost effective (and potentially takes less time) to purchase a physical copy and rip it to your computer. Most new titles are available at your local Best Buy or Circuit City for around $15. Many old movies can be found in the $9.99 bins, or as a part of 2-for-$15 or 3-for-$20 sales. If you don't want to leave your house, you can get free shipping from Amazon on any purchase over $25.

With a physical copy you can rip it to any computer you want, as many times as you want, in any quality that you want, and then do whatever you chose with the DVD (like resell it). Until it is considerably cheaper to download a movie (probably somewhere around $5), it makes no sense for the average consumer to make downloading a part of their routine.

When it comes to renting movies, Amazon's Unbox will undoubtedly fall short as well. For the same price as renting a movie from Blockbuster, you have to wait an hour or two to download a movie that you can only watch for 24 hours and can't rip to your computer or burn to a DVD. If you don't want to leave your house, most digital cable providers sell movies On-Demand for the same $3.99 price that require no download, can be started instantly, can be viewed on your television without connecting your PC to it, and can be watched for the same 24 hour time frame.

3. Restricted file access

People want the ability to do whatever they want with a file. And if they pay for the movie, why shouldn't they be able to copy it to each of the three computers in their house, their iPod, and burn a DVD to play on their TV? Unfortunately, Amazon and Apple haven't figured this out and continue to place unrealistic file restrictions on their downloads.

Lets think about music again for a second – some people complain about Apple's restrictions on music files, but when you think about it, you can do almost anything you want with those files – and that's why it still ultimately works. You can burn them to a CD (which then can be copied or ripped), you can store them on your iPod, and you can listen to them on your computer. Compare that to what movie downloading services are offering.

According to a recent article in the E-Commerce times about Unbox, “The downloads can be transferred onto DVDs for storage, and the DVDs can be used to play the movie on the computer which downloaded the movie, but they cannot be played on a regular DVD player.” They also give you a second file that can be viewed on Windows Media compatible digital players, but that's a far cry from the freedom that consumers desire.

Using readily available free software, it's pretty simple for the average consumer to rip a DVD to their computer in their desired format, and then to copy it to their iPod if they want. When it's so easy for consumers to get what they want with a physical copy, it still makes no sense for them to pay a similar price for a second-class product.

4. The way we watch vs. the way we listen

How do you listen to your music? Most people listen while they're driving (on a CD or their iPod), while they're on their computer (using a CD or files on the hard drive), when they're traveling (on a portable CD player or their iPod), or around the house (on a stereo playing a CD or hooked up to an iPod). All of those things are easily accomplished when you download an audio file from iTunes.

Compare that with how you watch movies. Most people watch movies on their TV (using a DVD). That's it. But what do downloading services let you do? Anything but that. You can watch it on your iPod when you're traveling, you can watch it on your PC, or you can watch it on your TV in inferior quality by hooking up your PC to your TV. While all of those things are nice, they don't address the main need of the consumer – to be able to throw a DVD in their DVD player and sit back and watch.

Mark Cuban explains in a recent blog entry: “watching video on a computer or on a PDA/iPod is a 2nd class experience. It works amazingly well as a time killer on a bus, plane, lunchroom. It works good enough in a dorm room or your apartment bedroom, but its not going to replace watching on a real TV. It will always be a niche market in every manner.”

5. There's already a better option

The previous four reasons all lead up to the obvious conclusion – there's already a better option! When it comes to CDs, your options are to buy them in the store, order physical copies online (or through the mail), or download them. The price is essentially the same, but you don't have to worry about delivery when downloading (i.e. driving to the store or paying for shipping), and you get the product within minutes.

But no matter what way you get it, you end up with the same thing in the end. If you buy a CD at Best Buy, you can rip it and have a digital version. If you download it on iTunes, you can burn it and have a physical copy. You don't lose out by downloading. It's obvious that when it comes to movies, you lose out considerably when it comes to download time, file quality, and file restrictions.

As a movie buff, you have three options that are far superior to downloading from Amazon or Apple. Hardcore movie fans tend to go the Netflix/Blockbuster Online route where they can rent somewhere around 3 movies at a time for around $20/month. When they get the movies, they copy them to DVD. Now they have their own copy that they can watch, rip, and copy anytime they want.

The slightly more legal approach is to simply purchase the DVDs you want. For essentially the same cost of downloading, you get your own physical copy that you can, again, do whatever you want with. Down the road you can always sell the DVD and make some of your money back.

Those of you that like to rent movies can go the On-Demand route that most digital cable providers now offer. For the same $3.99 cost of renting a movie on Amazon or going to your local Blockbuster, you can watch it immediately on your TV and have it billed to your cable bill. The downside to this is that you can only access it for 24 hours and usually can't make a physical copy (if you really wanted to you could make a physical copy if you have a TV Tuner card on your computer that can record TV).

Rich Greenfield of Palicapital summed it up best in an article posted on Mark Cuban's blog:

“At a premium price point we also question who is the target market? Illegal movie downloaders are unlikely to be attracted at these prices and physical DVD purchases are unlikely to be interested in dealing with primarily PC-based nature of the downloadable files (with heavy movie renters far better off with Netflix or Blockbuster than Amazon Unbox).”

Ultimately that leads me to one of two conclusions – either film studios are really dumb and don't understand their consumers, or tthey really don't want to take the necessary steps for movie downloading to succeed. I'd say it's more the latter than the former, but it wouldn't surprise me if it was the other way around.