Don't Start a Company to Be Your Own Boss(blog.matthewgoldman.com)
blog.matthewgoldman.com
Don't Start a Company to Be Your Own Boss
http://blog.matthewgoldman.com/post/64805179325/dont-start-a-company-to-be-your-own-boss
46 comments
I love having bosses. They deal with customers, go to meetings, handle negotiations, make sure deals get done and basically do everything else needed to leave me free to solve problems and hack. Why would I want to give all that up?
You might want to give all that up if (a) you disagree with how they deal with customers, or (b) you think they negotiate badly, or (c) or you think they don't make the right deals, or (d) give you the wrong problems to solve, or (e) anything else along these lines.
He makes some excellent points—that self-employed or start-up CEOs do have many stakeholders.
That said, the second sentence in this statement is false:
"First, if you have investors, you are working for them. They are providing the capital for your business and you have a fiduciary responsibility to return their investment with profit."
Yes, you have a responsibility to investors to do everything reasonable to give them a return on investment, but the type of investment may or may not create a fiduciary relationship. And it's important not to be glib about what fiduciary duties actually are and when they arise.
That said, the second sentence in this statement is false:
"First, if you have investors, you are working for them. They are providing the capital for your business and you have a fiduciary responsibility to return their investment with profit."
Yes, you have a responsibility to investors to do everything reasonable to give them a return on investment, but the type of investment may or may not create a fiduciary relationship. And it's important not to be glib about what fiduciary duties actually are and when they arise.
There seems to be a persistent myth that for-profit businesses are legally required to maximize profit, which is really not the case. It's perfectly possible for a company to have non-profit-maximizing strategies, especially in the short term. The founder might have some personal ethics regarding how a business ought to be run, or they might want to project a certain brand image, or they might be interested in maintaining a positive/motivating work environment even if doing so costs some clients or requires paying employees above-market, etc. As you note, fiduciary duties are much more specific. For example, screwing over minority shareholders in certain ways would be a breach of fiduciary duty; accepting investment under false pretenses may be as well. Simply running a company in a suboptimally profitable way, because it's how you prefer to run the company, is not. There are other mechanisms in place for handling disagreements over those kinds of things, such as investors demanding seats on the board in return for their investment, in which case they could vote to overrule your decisions (or replace you entirely, given enough seats).
To take a high-profile example, Chik-fil-A chooses not to open any of its stores on Sundays, because the owner believes the Sabbath should be a day off work. This may or may not maximize profits, but it's not an illegal choice even if it doesn't.
To take a high-profile example, Chik-fil-A chooses not to open any of its stores on Sundays, because the owner believes the Sabbath should be a day off work. This may or may not maximize profits, but it's not an illegal choice even if it doesn't.
All great points. Directors have a very wide range of discretion, even now including absolution under many articles of incorporation for pursuit of corporate opportunities that may create a conflict of interest (as well as the long standing waiver by the corporation of the duty of care so often included in Delaware articles).
Short of a grossly malfeasant breach of loyalty or bad faith—or declaring dividends when the corporation meets the legal definition of insolvency—there usually aren't many claims for shareholders to bring.
Short of a grossly malfeasant breach of loyalty or bad faith—or declaring dividends when the corporation meets the legal definition of insolvency—there usually aren't many claims for shareholders to bring.
The key difference is choice. If any of the things the author mentioned control me, it's because I allow them to. Whereas it might even be partly accurate to say that the definition of having a boss is that don't have that choice.
You always have a choice; it's the same choice you have with investors and clients, the option to stop (either by quitting or getting fired). Mentally, you might not see a job that way, but it's the same basic choice. If you have a single investor, or a single client, it's the same as a boss. Running the company might let you diversify towards multiple clients or multiple investors, but then you've just traded one boss with a lot of influence for many bosses with proportionally less influence. The choice, with each one, is the same.
Having one boss with a lot of influence versus many with proportionally less influence is the point. When you have many bosses, you can choose between them. When you have one boss, you can't. That's the choice that matters.
That's adorable that you think that you have more choices if you're a business owner.
Why?
I don't want to go too recursive, but have you ever worked for a boss who became one because he/she did not want to have one?
Remarkable features I found were: Trouble delegating work (it's out of their hands), don't want to be hampered by decisions made in the group, resorting to "because I don't want it" where factual arguments are asked for.
For your energy, attitude and stamina it seems better anyway to have a positive drive ("I do because I want...") and not being steered by avoidance.
Remarkable features I found were: Trouble delegating work (it's out of their hands), don't want to be hampered by decisions made in the group, resorting to "because I don't want it" where factual arguments are asked for.
For your energy, attitude and stamina it seems better anyway to have a positive drive ("I do because I want...") and not being steered by avoidance.
I think the article has a point and yet misses the point. If you start a company and don't have investors that can fire you, it is true you still don't work for yourself but for your clients, employees, etc.
Nonetheless there is a huge difference in that the ability to terminate a relationship with a boss is possible from either side, without you losing your position in your company. It's wonderful being able to tell a client that if they are going to micromanage you, they can take a hike.
Nonetheless there is a huge difference in that the ability to terminate a relationship with a boss is possible from either side, without you losing your position in your company. It's wonderful being able to tell a client that if they are going to micromanage you, they can take a hike.
In general this is terrifyingly true, although this depends largely upon which business you're in. A market trader doesn't feel this in the same way that the boss of a graphic design studio might.
I get what the OP is getting at, but I still think being able to be your own boss is a good reason to start a company. The investor/founder relationship isn't the same as a boss/employee relationship. You get to choose how you interact with an investor ahead of time. For instance, you should have already thought through and set up the conditions under which you can get fired so that the investor has to live with those rules. When you have a boss, you're interacting with them on their terms.
Being your own boss is great...
...if YOU are good at being a boss!
If you allow your employees (ie YOU) to slack, then that's not being a good boss.
...if YOU are good at being a boss!
If you allow your employees (ie YOU) to slack, then that's not being a good boss.
I've had my boss sacked many times, but the replacement boss turns out to be exactly the same.
maybe it wasn't the boss, but the team forcing every boss into a similar pattern.
There is actually a lot to be had to start your own compnay and not to have a silly boss. I have and am doing exactly this for several years now.
Being your own boss means: I get credit when credit is due. I get to choose my customers. I get to choose people I work with. I get to influence the product in any way that makes sense. I work with tools and in places that work best for me.
And so much more.
I think its all word play and its hard to ha e debate with what's been said in the post. I agree with post but disagree with ttiitle and conclusion
Being your own boss means: I get credit when credit is due. I get to choose my customers. I get to choose people I work with. I get to influence the product in any way that makes sense. I work with tools and in places that work best for me.
And so much more.
I think its all word play and its hard to ha e debate with what's been said in the post. I agree with post but disagree with ttiitle and conclusion
I do run my own company, unfortunately, my boss is still pretty silly.
I'm considering stopping my day job to work as a contractor. My goal isn't to avoid stupid grunt work--I just hope that being entirely responsible for my upkeep and well-being will make the stupid grunt work seem more urgent and important. When I see posts like this (especially when, as in this case, the author claims to like his situation), something about them seems a bit condescending. It sounds like he's saying that if you don't like having a boss you're not cut out for running a business. When I look at successful small business people, though, they all seem like the ones who don't like being bossed around. They work crazy hard for their clients, yes, they make big sacrifices, yes, but they're not motivated by the kind of petty dread that the pointy-haired boss types engender.
The word boss has a pretty specific connotation and your clients and customers aren't that. Yes, if you work for yourself you're responsible for delivering work to your customers and they have some control over you due to that but it's incredibly different from the relationship between a salaried employee and his singular supervisor.
You can fire a customer, you can't fire your boss
You can disappoint a customer, but you can't afford to disappoint all of them. You can disappoint your boss but you can't disappoint him or her all the time.
A single customer isn't necessarily equivalent to your boss in a job, but together they are.
A single customer isn't necessarily equivalent to your boss in a job, but together they are.
>Second, you have your employees. They may technically work for you, but let’s be honest, you work for them.
If that happens to you, I'd highly recommend reading "Work the System" and "Emyth Revisted." Yes, it's self-help porn but it works.
If that happens to you, I'd highly recommend reading "Work the System" and "Emyth Revisted." Yes, it's self-help porn but it works.
I agree with the overall premise of the blog.
But for many, I believe "being your own boss" is just another way to say you want more control of your destiny and want to capture more up side of your hard work.
But for many, I believe "being your own boss" is just another way to say you want more control of your destiny and want to capture more up side of your hard work.
Start a strtup in case you want to make business, to have fun.
Investors are not your bosses. Their goal is the same: make your company perform better.
Don't be afraid of them :)
Bosses aren't someone to fear. I think investors are overseers of my performance and people to whom I am accountable, therefor, my bosses. I'm not afraid of them. Never work for people you are afraid of.
You should read The Emyth, he talks about this very issue, and how you can still pull it off.
I found the order of the bosses in the post to be interesting: Investors -> Employees -> Customers.
Not sure if that was on purpose, but I would have put it in the opposite order if the subtext of the article was how to successfully be your own boss...
Not sure if that was on purpose, but I would have put it in the opposite order if the subtext of the article was how to successfully be your own boss...
I had a franchise that I got in 1990. I remember when I called a mentor/friend in the business the first time that I got the flu. I asked him "How do I or who do I call in sick to?" . My mentor's response was - "just contact everyone you were going to do business with today", which was about 60 people. An impossible task. I went to work sick.
Not the best job situation, but the reality if you are a sole operator.
Not the best job situation, but the reality if you are a sole operator.
It is a good opportunity to write a simple scheduling app to automate such a task if you need it.
It was a route sales job. Not possible to automate. I had 60 customers to visit that day, at their place of work.
I don't think you understood the real message of the advice...
The point is that people who are established likely can hire someone to make those calls. There is no reason you can't automate it. The new people who are getting established end up usually finding it is not worth it.
My father is a physician in private practice. He rarely takes time off for being sick but it is possible to do either in an emergency or just being very sick. His front desk people could cancel his appointments.
This is not cost free, and it is a lot harder than just calling in sick. After all if you have fixed expenses, such as salaried employees, they collect their money whether or not you work.
So it is very different. Automating some of the processes can cut down on the expenses but it is still a major thing and not really comparable.
My father is a physician in private practice. He rarely takes time off for being sick but it is possible to do either in an emergency or just being very sick. His front desk people could cancel his appointments.
This is not cost free, and it is a lot harder than just calling in sick. After all if you have fixed expenses, such as salaried employees, they collect their money whether or not you work.
So it is very different. Automating some of the processes can cut down on the expenses but it is still a major thing and not really comparable.
Again, your response shows you missed the message.
The lesson wasn't about this particular set of circumstances. Of course it would be trivial to automate this specific use case. The point is that as a business owner, as the person onto who everything comes down in the end, you sometimes just have to suck it up and do what no salaried person would do. The lesson was: as an employee you can just call somebody and make your sickness their problem (I'm not suggesting that people with cancer can make that somebody else's problem, please no autistic readings of an abstract point). As the boss, the final person responsible, you have nobody to offload things like this to. You just have to find a solution and often that solution is in muscling through the obstacle.
The lesson wasn't about this particular set of circumstances. Of course it would be trivial to automate this specific use case. The point is that as a business owner, as the person onto who everything comes down in the end, you sometimes just have to suck it up and do what no salaried person would do. The lesson was: as an employee you can just call somebody and make your sickness their problem (I'm not suggesting that people with cancer can make that somebody else's problem, please no autistic readings of an abstract point). As the boss, the final person responsible, you have nobody to offload things like this to. You just have to find a solution and often that solution is in muscling through the obstacle.
There is only one legitimate reason to start a company: you have identified a business opportunity that you believe is worth pursuing.
If your primary interest is control (over your schedule, your work environment, the type of work you take on, etc.), consider freelancing.
If your primary interest is control (over your schedule, your work environment, the type of work you take on, etc.), consider freelancing.
What people don't always remember is that having a single boss means having a single person in charge of your fate.
Having 10,000 bosses/direct customers dilutes that power greatly. Individually, none of them have any power over you. Only as a unified movement can they amass the power of that single boss.
There is every type of boss out there in world and I don't mean to say they are all to be feared, hated. But the power dynamic mentioned above IS there, and your boss knows it.
Having 10,000 bosses/direct customers dilutes that power greatly. Individually, none of them have any power over you. Only as a unified movement can they amass the power of that single boss.
There is every type of boss out there in world and I don't mean to say they are all to be feared, hated. But the power dynamic mentioned above IS there, and your boss knows it.
If you and your boss respect each other well, everything can be great. Then, one does not need to distribute the power to people you know to a much lesser degree.
Absolutely. I've had a few of these bosses myself.
They ask for stuff, they wait for me to tell them what's possible and when it can be delivered, they're interested/engaged in the process, and they're happy to get the product in the end; they say thank you; they pay the bills I send them.
They don't tell me to sit here or there and do this or that.