Imagine it’s the first day of gym class and you get to pick your sport. You can pick something easy that you don’t really like, say croquet, but you know is an easy A. Or you can pick a more challenging sport that you enjoy playing but you know you’ll have to play hard every day to get a a good grade. What would you do?
Most people would pick the more difficult sport that they enjoy, even if it means working harder. But what would you do if you had to get an A in gym class to get into college? Would you still choose the challenging sport that you love or would you choose croquet?
This is the dilemma every entrepreneur faces when starting a company. Do you start the company that you love, or do you start the company with the best chances for success? Entrepreneurs love to talk about doing it for the passion, but I think increasingly they are choosing the path of least resistance. It’s not an unreasonable choice. In fact, from a purely economic standpoint, it is the correct choice. But given our human penchant for doing things that economists would argue are irrational, is it actually the right choice to start a company based primarily on the best perceived odds of success?
Let’s go back to gym class for a moment and assume that half the students choose croquet for the easy A and half the students choose basketball because they love the sport. Who works harder? Who practices more? Who actually develops real skill in their game? I think everyone would agree that the basketball players would put in more effort and develop greater skills than the croquet players.
Does the “easy” choice still look like the better choice? Even the question of which one is actually easier must be asked. Is it really easier to slog through months of an uninteresting game than play something challenging that you love? What we’re dealing with here is the difference between intrinsic and extrinsic motivation, doing something for the love of it versus doing something for a reward, and the resulting difference in performance is massive.
There’s no way of knowing if intrinsic motivations are enough to balance out the odds of a successful outcome, that would depend on many variables, but research does show that people driven by external motivators perform significantly poorer than those driven by internal reasons. Just the introduction of external motivators, including ones we believe should have a positive effect such as pay or expected rewards, cause performance to diminish. This also holds true for external obligations, such as the pressure that comes with raising venture capital. This pressure often changes the nature of entrepreneurship from something you love to something you view as work.
Unfortunately, the ecosystem is designed to offer external rewards based on what others think you should do. Investors essentially play the role of the gym teacher telling you they’ll give you an A if you play croquet. Incubators, accelerators, and unambitious VCs have created a system of external rewards for people willing to do what they think is the likeliest path to a quick exit, producing a wave of entrepreneurs who go through the motions, because they’re pursuing what they believe is the easy score.
As I said before, on paper there isn’t anything wrong with this. It’s an example of maximizing economic returns at its finest. But it’s also how mercenaries are born, and mercenaries never fight as hard as those doing it for a greater cause.
I believe that many of the incentives provided by the startup ecosystem, like the gym class grading scale, actually serve to discourage those who play for the love of the game. If we’re making people question or abandon efforts that have intrinsic value by rewarding those who pursue extrinsic goals, then we are likely discouraging many of our best performers. We are effectively losing star basketball players who are trading their passion for a good grade by choosing to play croquet.
Most people in this world don’t get to choose their sport. Entrepreneurs do. You can choose a sport that brings out your best and play for the love of the game, or you can choose what you think is the easy A. Choose wisely.
[Illustration by Hallie Bateman]