Phil Libin, Evernote CEO, argues that money, power, and flexibility are wrong reasons to start a company. Startups fail 95-99% of the time, CEOs answer to everyone, and the work is relentless. The only legitimate reason is to change the world, and tech has never been more meritocratic for trying.
Why be an entrepreneur? Well, there are lots of incorrect reasons, an infinite number of incorrect reasons. The most common incorrect reason is kind of the obvious one, is money. You want to be an entrepreneur because you think being an entrepreneur is a good way to make money. It isn't. That's all there is to say. It's just not. Depending on how you count— and Adeo's got more data about this than probably anyone else— depending on when you start counting from, probably 95% to 99% of companies fail, will make no money. And so if you think that being an entrepreneur is a good way to make money, you're just bad at math. You kind of need to be good at math to be a successful entrepreneur, so it's already two strikes against you. If you're smart enough and dedicated enough and you have the work ethic and you have the talent to be in this room— because Microsoft doesn't let just anyone in off the streets. You've got to be pretty good to come here. If you're smart enough to be here and you want to optimize for the lifetime earning potential, for your lifetime earning potential, which is— there's nothing wrong with it. Well, there is. It's kind of a lame thing to want to optimize your life for. I'm not supposed to say that. If what you want to do is optimize your life to optimize for your lifetime earning potential, get a job. Don't make a startup. Get a job. Be a lawyer, be a banker, be an investor, be an engineer of some kind. Get a high-paying job. Work at it for 20 or 30 years. Your expected lifetime earnings will be much higher than if you spend 5, 10, 20 years of your life trying to build startup ideas, which will probably not go anywhere financially. So the first wrong reason is money. Forget about that. The next wrong reason, the most common one I hear, is power. People think it kind of works like this. People think, "Oh, this is what a corporate org chart looks like. I'm going to be the CEO and I'm going to be on top over here and then there's going to be this pyramid, this corporate pyramid of people under me and I'm going to get to wield power over people." Now, if that's what you want to do, there's nothing wrong with that. There is. It's fucked up thing to want to do. But this is not how it works. So if you're actually a startup CEO, it's not like this. It kind of works like this. So there is a pyramid. Yeah, the animation, by the way, high production values. That's what we're about. Sorry, the designers at Evernote turn out to have better things to do. I wish I had an army of designers that I could just command to make this stuff. And I do. We actually have— I just counted. We have 31 designers at Evernote now. It's kind of cool. But they all have more important things to do than work on my slides. So I'm at the bottom, exactly. So this is what it feels like. This is totally what it feels like. This is not me trying to be funny, succeeding at being funny. But this is actually what it feels like. So when you are the CEO of a startup, everyone is your boss. Your employees are your boss. Your customers are your boss. Your investors are your boss. Everyone in the media is your boss. I have never had more bosses than I do now at Evernote. And it doesn't get better. In this sense. It doesn't. It gets worse. Now maybe at some point it flips around. I don't know. I've never been the CEO of a huge company. Evernote is about 330 people right now. That's the biggest company I've ever headed up. But it is my third startup. And certainly I can tell you for a fact that up until at least 330, it does not feel like you're on top. Maybe at like 335. Maybe you just got to get those 5 more people, and then all of a sudden it'll flip. So if you are motivated by wielding power, by exercising authority over people, obviously don't be a startup CEO, don't be an entrepreneur, do something else. Join the military, be a politician, join a big company, do something weird like that. There's lots of other bad reasons. A common one that I hear is flexible time. Ah, you know, Phil, I've got a job and it's like I don't I want to have more flexibility in my schedule. I want more time to spend with my family. I want to be able to work from home. Yeah, it doesn't— no. That's not going to work that way. I mean, and you guys know this, right? If you're in a startup, if you're an entrepreneur, yeah, I mean, I guess you get flex time. You get to work any 20 hours a day you want. So if your priority, if you're trying to optimize for how much quality time you're going to get to spend with your family, not that there's anything wrong with that, don't be an entrepreneur. So an infinite number of wrong reasons. Only one correct reason for doing a startup, and you already know what it is. I'm not even going to put up a slide about it because you already know what it is. The only valid reason to be an entrepreneur, given that you have a very low chance of actually succeeding financially, and it's not a particularly glamorous life, you're not going to get to wield a lot of power, it's a huge amount of work. The only legitimate reason is to change the world, is to bend the universe, is to say the universe is bending this way and I think it should bend the other way and I'm going to bend it in that direction. It's to change the world. And the good news— the bad news is that that is not the reason why most people want to become entrepreneurs. Which is why I say to the answer to who, most of the time my answer is not you. But the good news is if you're one of the slightly, or maybe not so slightly deranged people that actually meets all these qualifications and you are in it to change the world, then the good news is now is the best time in the history of the universe to do this. There's never been a better time. There's never been a better time in the history of the universe, especially in technology, to try to make something to change the world You have a better chance of success now than you ever had before. Still a tiny, tiny chance, but it's better than it's ever been because the world has become a meritocracy. The tech world has become a meritocracy because all you need to do to be successful now is to build something great, which was never the case before.
