Hello super smart people. I would like to get your opinion on something that I've been pondering about lately.
For background, I went to college, went to grad school, got my degrees in engineering, and spent a decade of my life working as a design engineer. Then about 3 years ago I quit that and started a company of my own. Very recently I took the plunge and started a 2nd company. So now I own and run 2 companies. The first one is starting to mature and bring in a sizable income. The 2nd one is just starting and I've been able to keep my employees working and earning.
If you ask any entrepreneur out there about the beginning of their business, every one of them will tell you the first 2 years suck. The next 3 suck a little less. They don't actually bring in any sizable profit until the 5 year or more. For example amazon.com was operating at a loss for 6 years. Uber after all these years are still operating at a loss. It is simply the nature of the beast.
I belong to several forums for entrepreneurs where we give and receive advice from our peers. Probably the most common theme that comes up is people around us keep questioning why we aren't profitable yet after a month? Divorces have resulted from this. One spouse would start a business and the other just don't want to make the necessary sacrifices anymore.
Every person I have ever talked to has a business idea and thinks they know how businesses work. Just like how every person out there thinks they know more than the evolutionary scientists on evolution. It is the Dunning Krueger effect. And I get it, evolution isn't very relatable to everyday life.
But everything in everyday life is like starting a business. When you decide to body build, you work out at the gym and you don't gain muscle right away. In fact, you're going to be sore and you will feel weaker before you gain any strength. When you decide to career in engineering, you need to spend 4+ years in college not earning anything before you can start earning an income in that career. When you decide to get a house and start earning equity, you're gonna have to spend money to buy the house. When you want to get a taxi car to earn a living, you will have to spend a sizable chunk of money to buy the licenses and the car itself to start working as a cab driver.
In other words, every other aspect of life is about taking 3 steps backward in order to take 5 steps forward.
Why in God's name does most normal people think when you start a business you have to profit right away?
And it goes beyond what the common man thinks about entrepreneurship. I regularly check out banks to see if I can get a business loan. And so far every one of them has told me in order for them to feel safe giving my company a loan I have to show my company earns a profit from day 1.
I've talked to potential investors (aka people with money). One of the most common misunderstanding that I have run into is they think investing in a business is like a pyramid scheme: put $100k in, get $300k back next month. This is one of the reasons I decided to go at it by myself.
There's a lot of brain power here. I know that. Why do you think most normal people can't understand this part of entrepreneurship? Is there a mental block somewhere that prevents a person from applying what goes on with normal everyday life to starting and running a business?