The inaccessibility of entrepreneurship and using side projects as a back door
Entrepreneurial opportunities are not as accessible as they're made out to be, but a more liberal interpretation of side projects can make entrepreneurship more accessible
8 min read
Last week, I wrote about how entrepreneurship is a skill to hone, not a switch you flip at some point. A few friends pointed out that while the higher-level point that “entrepreneurship is a skill” holds, my tone was privileged – especially in how I closed the post:
If you are not working on a startup, not working a job that’s inherently entrepreneurial, and not working on any side projects or advising any startups, then you can’t say that you want to start a company in the future. That would be like me saying I want to become a Michelin star chef when I just made myself Campbell’s Chunky Noodle Soup for lunch.
When I said that you can’t say that you want to start a company in the future if you’re not doing entrepreneurial things right now, I failed to acknowledge how inaccessible some of these entrepreneurial opportunities are to many, and I was dismissive of that reality.
While the point of the post holds — entrepreneurship is a skill which is developed through reps — not everyone has the same access to getting high-quality reps or the bandwidth to take advantage of them. It’s one of the ugly truths about the world of entrepreneurship.
While the world of entrepreneurship is one of optimism, this week I spent some time reflecting about some of the uglier truths that often go unsaid. Entrepreneurship is not as equitable or accessible as it’s made out to be. I wanted to address and unpack two of these realities, and dive deeper on an alternative perspective on side projects and how they can be a tool for navigating those realities.
The most valuable resources are heavily concentrated towards the “top” using flawed (and biased) signals
The startup ecosystem is subject to the power law – most of the returns come from a very small portion of winners. Investing, advising, or joining a startup that goes on to be a $1B company is the most efficient way to make money or accelerate career opportunities. Therefore, people in the startup ecosystem are focused on finding the “winners” and doubling and tripling down on them.
With so much risk, uncertainty, and noise in the world of entrepreneurship, it’s challenging and inefficient to thoughtfully evaluate the merits of each entrepreneur. Therefore, people resort to existing relationships and signals to identify potential winners and concentrate their resources.
Resources are disproportionately focused on aspiring entrepreneurs who carry positive signals or existing relationships. In times of increased uncertainty, this effect intensifies. When COVID hit and uncertainty skyrocketed, investors started concentrating all of their investments on existing portfolio companies and founders they already had existing relationships with.
At a macro level, using these signals – despite their flaws and biases – is rational behavior. Investors need some way to filter 1000s of opportunities, and these signals are an efficient way to do it with some accuracy. But when you zoom in, they’re not equitable or based on merit. The ecosystem’s reliance on these signals to figure out where to concentrate resources limits opportunities for founders who do not carry these signals or existing relationships. A really strong entrepreneur who does not carry these signals will get less opportunities than a less competent entrepreneur who does carry them. This becomes a vicious cycle – those who start with the best opportunities continue to accrue positive signals and relationships, giving them access to even better opportunities and resources. While those who never had the positive signals or relationships to begin with can find themselves still on the outside looking in.
Not everyone can afford to take big swings
When I graduated from a pretty good school in 2013, I was $50K in debt. I worked for startups in Detroit making $36K/year for two years before deciding to start my own company while still $50K in debt. 3.5 years later, after moving on from that startup, I was $60K in debt. I continued taking risks. I moved to New York while doing some freelance work, and ended up plunging myself into writing a book on fundraising for 5 weeks rather than focusing on my freelance gigs to pay the bills. I accumulated some more debt before I eventually wound up at Amazon.
On the surface, one headline for my journey is “continue betting on yourself.” But how much risk was I actually taking? Was I ever really in peril? No. I had a good education, a strong network, and knew that if I ever really needed a job I could get one. I had no one relying on me, so the only downside to things falling through the bottom was my own quality of life. Worst case scenario, if things really fell through the bottom, I could go stay in my sister’s guest room for a month to get back on my feet (this was a real thought that crossed my mind that made me comfortable continuing to bet on myself). While I had lots of debt, I could afford to continue taking swing after swing (and miss and swing again). Being able to do so has landed me where I am today.
Taking big entrepreneurial swings (or getting shots up) is one of the keys to maximizing the output of an entrepreneurial career, and willingness to fail is a prerequisite for taking big entrepreneurial swings. But not everyone can afford to fail with a big swing. Even if access to entrepreneurial opportunities were equitable, not everyone can afford to take advantage of them.
Using a more liberal definition of “side projects” to make entrepreneurship more accessible
This all sounds pretty shitty, but as I mentioned at the beginning of this post, one of the things that makes me love entrepreneurial careers is that there is more opportunity and accessibility than other career paths.
I was a bit too prescriptive last week when saying that aspiring entrepreneurs needed to be working an entrepreneurial day job, working on side projects, or advising other startups in order to be building their entrepreneurial skills.
Having an entrepreneurial day job or advising startups are relatively inaccessible opportunities to most. But side projects – when thought of much more liberally than just “building a startup on the side” – help aspiring entrepreneurs hack this access cold-start problem.
Side projects can be as small as my writing this weekly newsletter, starting a meetup group, or creating an online community on Slack or Whatsapp. Too often people view the success of a side project as whether or not it becomes a full-time thing. That’s a myopic and limiting view of the purpose of side projects. The success of side projects should also be judged by the skills and network an entrepreneur is able to accumulate through them. These side projects can start incredibly small and have very little downside – making them far more accessible for those who can’t afford to fail with a big swing. They can also initiate a snowball effect that years down the line give the entrepreneur the skills and access to a network that make the leap to starting a company significantly less daunting. The key is to be willing to start working on these side projects years before trying to start a company, and you can’t always know precisely how they will evolve.
Working on side projects can give entrepreneurs access to the people who could be incredibly valuable resources down the road – years before they really need them.
If there is a specific way that someone can help or contribute to your side project, that gives you a compelling enough reason to reach out and a compelling enough reason for them to volunteer their time. Back in 2014, I started a podcast with a friend that didn’t quite “succeed” – we killed it after 15 episodes and I did not become a full-time podcaster. But by other measures, it was a success. We did interviews with cool people like Andrew Yang and learned some lessons about interviewing, building a brand, and the challenges of distribution. The side project helped us talk to and learn from people we otherwise would not have had a reason to talk to.
Building a network through side projects is 10x as valuable as networking for the sake of networking. Not only is it easier to build connections with influential people who are generally harder to access, but it helps build relationships with relevant people – who have expertise and networks that are more relevant to what you’re excited about. Building relationships through side projects can wedge entrepreneurs into gated, exclusive inner circles of people they may not otherwise have access to.
These side projects can start really, really small, and they can even feel aimless. But they have to start somewhere in order to have the potential to snowball.
To revise my closing line from last week based on this approach of side project and the inaccessibility of many entrepreneurial resources:
If you want to start a company in the future, you should be finding ways to get entrepreneurial reps now – no matter how small – whether it be doing entrepreneurial things in your day job, advising startups, or getting reps through a side project. It’s like if I wanted to become a Michelin star chef – in a perfect world, I would get an apprenticeship with one. But given that’s near impossible, at a bare minimum I should start adding some of my own ingredients to the Campbell’s Chunky Soup I just put in the microwave and start gradually spending more time cooking for myself. That way I’d have something good to talk to a more experienced chef about.