The terrible job

One Friday in 2013 there was $50,000 in the account and $150,000 of payroll due by the end of the day. The $500,000 we were expecting from our second-largest customer had not come. I asked the bank for a short bridge, and the manager told me the bank would not provide one, and I boarded a flight to Atlanta to sit in front of the customer whose payment we were waiting for. When I landed there were seven voicemails from the bank manager. He had released the payroll anyway, by mistake, after telling me he would not, and he was worried: he wanted me to ask the payroll company to return the money to the bank. I did not return his call, and I did not return the money. On the Monday the $500,000 arrived. Everyone had been paid, nobody in the building knew how close it had been, and the reason the mortgages went out that month was a bank manager’s error.

That Friday is the definition of the job. You know you are an entrepreneur when you wake up on payday with the mortgages and groceries of your employees on your shoulders and not enough money in the bank to pay them, and by the end of the day, somehow, they are all paid and you can sleep. It is the truest definition of the job I know, and everyone who has done the job recognises it at once and everyone who has not thinks it is an exaggeration. It is not. Being an entrepreneur is a terrible job. Nobody in their right mind, if they understood in advance what the work entailed, would take it on, and there is even an academic paper, by Rasmus Koss Hartmann in 2021, whose title says so in plain language: Entrepreneurship Is a Terrible Idea. The statistics are on his side. Most new businesses fail, and for those that do not, it can be years of keeping one’s head above water.

I have done the job for 30-odd years, in three countries, with one company that reached 100 people and then collapsed, one that was sold, and several in between, and what follows is what it is like from the inside, because the inside is where the definition lives.

Payday

Every two weeks, for most of my working life, a number has had to be in an account on a Friday. At CoreAVI in 2013 it was $150,000, and it arrived like a metronome regardless of what else was happening. Anyone who has managed a business on tight cash knows the peculiar dread of payroll day: the clock, the slight tremor in your voice when you ask a customer about a payment, the optimism you keep up for the team while you watch the balance. The Friday I opened with resolved itself by a route I could not have planned and would not recommend, and the point is not the resolution. The point is that the day exists, that it recurs, and that nobody outside the job sees it.

Ten years later, in 2023, the business was larger and the pressure was the same shape. The bank was nervous and so was I, and at one point I seriously considered selling part of the company at a discount, not because I had lost faith in it but because the next payroll was real and the future was not. We held on, one deal at a time, some of them held together more by personal trust than by terms, and by the autumn cash had caught up with recovery. The lag between a business turning and its bank balance turning is a chasm, and founders cross it or fall into it every year, invisibly, while the world sees only the ones who reach the other side.

Payroll has always felt personal to me, and I have come to think the feeling is the centre of the job. Once you employ people, salaries stop being numbers. They are mortgages, school fees, rent, plans, security. By employing someone I have entered into a form of trust: they give me their time and their labour, and I owe them a company that can meet its obligations. The possibility of failing to make payroll never felt like a financial problem. It felt like an integrity problem. I could tolerate losing my own money far more easily than the idea that someone else would suffer because I had not managed well enough, and although I know there are circumstances no leader controls, that knowledge has never fully protected me from the weight. I still think the weight is healthy. It is what separates the job from a game.

The Bank of Last Resort

The definition of entrepreneurship in the startup blogs and the keynotes is about vision, and vision is real. Entrepreneurs hold a picture of a future that does not yet exist and carry the burden of getting others to see it, whether the future is a global company or a corner bakery. Decision-making is real too, but not in the way it is usually described. Most people can make decisions. Entrepreneurs make them when the information is incomplete, the consequences are unclear, and nobody else wants the responsibility, and there is no one further up to pass it to.

The third part of the job is the one the blogs leave out, and it is the one that makes the job terrible. The entrepreneur is the bank of last resort. You fund the business when nobody else will. You mortgage your home when capital is tight. You accept personal risk, sometimes ruinous, to keep the lights on, and most of the time nobody sees it, because the moment you are seen doing it is the moment the customers and the staff stop believing.

The objection to all this is that the job is only terrible for people who do it badly. Limited liability exists so that the founder is not the bank of last resort; a well-advised founder never signs a personal guarantee, keeps the house out of it, and treats the company’s failure as the company’s; the ruin I am about to describe is a choice rather than a feature of the work. I accept the description and not the conclusion. The terrible version of the job is the personally guaranteed one, and the guarantee is not a mistake the well-advised avoid. It is what the bank, the landlord, the bondholder and the supplier demand of a small company precisely because it has limited liability, and the founder who refuses to sign does not run a company with lower risk. He runs no company at all, because nobody will lend to it. The bonds that foreclosed on my first company were guaranteed by me. The mortgage and the credit cards in the story below were mine. That is not a failure of structuring. It is the price of admission for anyone without capital of their own, which is to say for most founders.

I know what the ruinous case looks like. In April 2003, at 33, I was in a hospital bed while the company I had built from my garage into a 100-person operation was foreclosed by bondholders whose bonds I had personally guaranteed. I had weathered the dot-com crash, pivoted to real revenue, even cashed out partway, and then a misjudged acquisition, poisoned by patents that turned out to be invalid and liabilities that turned out to be hidden, toppled everything while I was too ill to fight for it. By the time I could walk again the damage was done. The company had gone, the money had gone, and our house was under threat. I paid off a debt collector with the last cash we had, and then I sat down on the stairs. It is the fact of the job at its worst, and every founder I know has a version of it, and most of them will not tell you.

Luck

The founder’s story, as it is usually told, is a story about character. Grit, resilience, appetite for risk. I have been credited with all three and I have come to distrust the credit, because the moments that decided my career were mostly not mine.

In September 2008 I had bought $2 million of parts to fulfil a contract with GE Aviation, on financing that Barclays was supposed to provide and then, at the last moment, withdrew. The 60-day payment deadline passed. My supplier’s lawyers stopped deliveries. I was out of cash, maxed out on the mortgage, and my credit cards were full. A small twist of fate gave me the leverage to renegotiate with GE, and I flew from the Isle of Man on the 5.50 a.m. flight to close the financing at Barclays in Canary Wharf, arriving with an hour to kill, no appetite, and no money for coffee. In the lift the news screen announced that GE had issued a profit warning. I was on my way to finance a GE contract on the morning the markets doubted GE’s solvency. I was shown into a small meeting room with biscuits, and nobody came. Minutes became hours. I sat, because I had nowhere else to go.

Then a senior director I had met once, a year earlier, at a pitch competition, walked past the door, recognised me and stopped. He poured himself a tea and told me he was leaving the bank and would be on gardening leave in time for the test series. While we talked cricket, two members of his staff came in, reviewed my documents without a word, went out, came back with papers to sign, and left. He stood up. “The money should be in your account,” he said, and gestured at the two staff. “They work for me. They’re being made redundant.” Outside, I called my finance director. The account showed $4.4 million.

People tell me I showed grit that day by not leaving. I did not stay out of fortitude. I stayed because I had nothing else to do and nowhere else to be. I was frozen. What saved me was not resilience. It was luck, and had that man been in a different corridor, or I in the lavatory, the company would probably have unravelled that week. That is the part of the founder’s story that the founder’s story leaves out. Behind a great many celebrated triumphs there is a moment like that one, arbitrary and out of the protagonist’s control, and the person who came through it is not a master of his fate. He is a passenger in someone else’s coincidence.

I was born lucky. Luck determined my starting position and privilege cushioned some of the consequences of my mistakes. What I did with those advantages once I was conscious of them is the only part I can take credit for, and it is a smaller part than the stories suggest.

Why We Need Them Anyway

If the job is this bad, and the outcome this dependent on chance, the sensible question is why a society should want anyone to do it. The answer is that it cannot afford not to. In Why Nations Fail, Daron Acemoglu and James Robinson argue that nations stay prosperous only when they permit what Joseph Schumpeter called creative destruction, the process by which new firms displace old ones, and that the nations which decline are the ones where economic power concentrates in a few hands and the disruption is choked off. The entrepreneur, on this reading, is not an ornament on an economy. He is the mechanism by which it renews itself, and I do not mean only the vanishingly small number who become famous. I mean the family who opens a shop in a neighbourhood that had none, and the light-industrial business that employs 40 people in a town nobody visits, and the consultancy of twelve that has paid wages every month for 30 years. They are the largest cohort of entrepreneurs by an order of magnitude in economic impact, and they are rhetorically invisible, often filed under the faintly derogatory name of small business owner.

Daniel Kahneman put the other half of the answer more directly. Optimistic people, he wrote, play a disproportionate role in shaping our lives. Their decisions make a difference; they are the inventors, the entrepreneurs, the political and military leaders, and they got where they are by seeking challenges and taking risks. Kahneman’s point is not entirely a compliment. The same optimism that makes a person mortgage the house for a business that has not yet made a sale is a miscalibration, and he says as much. Most new businesses fail, and 81 per cent of the founders in the survey he cites put their own odds at seven in ten or better. The delusion is socially productive and personally ruinous, and a society gets the renewal it needs by letting individuals bear the ruin. That is the terrible bargain underneath the terrible job.

I have watched myself make that bargain repeatedly, and not always wisely. One of my blind spots is people. I over-commit to the choices I have made about them, long after everyone around me can see the choice was wrong, and I have lost good employees by holding on to a bad one. The optimism that keeps a founder going is the same faculty that keeps him from seeing what his team already sees, and I have not found a way to have one without the other. The most I have managed is to notice it sooner.

The Friday

The definition stands, and I will end where it started, on a Friday with $50,000 in the account and $150,000 due. That day was paid for by a bank manager’s mistake and a Monday that came in time, and nobody in the building knew. It is a terrible job. Nobody sees most of it, the odds are worse than you think, and the outcome is less yours than you will ever be told. That is the fact of it, and the job gets done anyway, every second Friday, by people nobody sees.