Entrepreneurship vs Investing
All entrepreneurs do not necessarily make good investors – be it in public markets or private companies. I am one of those – I like the world of entrepreneurship. But over the years I have realised I am not a good investor. There is a big difference between the two.
Entrepreneurship is all about doing it yourself – taking an idea to reality, making it happen. At each stage of the journey, there are challenges to be overcome and risks to be reduced. Each day has a thrill in itself – the breakthrough meeting, the new feature idea, the customer feedback that just makes your day. Each day brings its unexpected joys – with of course the down moments. It is like a game of ‘Snakes and Ladders’ being played daily. There will always be more downs than ups. But the ups take you much higher than the descent of the downs.
As an entrepreneur, you are also very much in control. You decide your own future as you make many micro decisions. At the end, it is you who is responsible for success or failure. It is this responsibility that you have to live with as you seek to make something better in the world around.
Investing is very different. When investing in private companies as an angel or early-stage investor, you have to relinquish the running of the company to the entrepreneur. This realisation that one is not an entrepreneur is not easy – you cannot be giving advice constantly. The entrepreneur is on the front lines and seeing things differently from you. You are not the driver, but the passenger. You may guide with a compass, but the map is with the entrepreneur.
Investing in public markets is about understanding which companies to bet on the future with limited information – and then once the choices are made, to wait patiently and think long-term. It is not about daily activity that is the soul of the life of an entrepreneur.
In both the cases of private and public investing, the control and steering wheel lie elsewhere. One has to get comfortable with that.
Investing is not my forte. I like the thrill of building from scratch and exploring new domains. I tried my hand at both private and public investing, and did not like it. There are many entrepreneurs who have become very successful investors – and I admire them. The transition is not an easy one. For me, it is always going to the world of entrepreneurship – with all its risks, thrills and rewards.
Tomorrow: Part 37