Having been a CEO for most his adult life, Libin said, he has boiled his advice down to six basic questions of entrepreneurship: who, why, when, where, what and wa-how.
(If you're wondering what "wa-how" is, it's what happens when someone starts asking "why?" but then switches to "how?" in the middle, making "wa-how." Libin's advice for when someone asks "wa-how?" is to look them right in the eye and say, "I'll tell you wa-how!")
Here are Libin's first three points: the who, the why and the where of being an entrepreneur.
Who should be an entrepreneur?
The majority of people should not be entrepreneurs, Libin said, since most people that want to be one do it for "ridiculously wrong reasons."
Those reasons include:
- As a way to make money.
This is a terrible idea, said Libin, since anywhere from 95% to 99% of businesses fail.
"If you're smart enough, and you have the energy and the power and resources and you're trying to optimize for your lifetime net worth, it's just a stupid thing to do."
If that's your plan, he said, just get a job as a lawyer or accountant where "you're expected return is much higher than being an entrepreneur."
"If you want to become an entrepreneur because you think its a way to make money, you're just bad at math. And you have to be pretty good at math to be a successful entrepreneur, so that's two strikes against you."
- As a way to get power.
There is this vision of a pyramid, where the CEO is at the top, and everyone underneath just reports to them, said Libin. But start-up CEOs are actually at the bottom of that pyramid.
"When you're the CEO of a start-up, everybody else is your boss. All of your employees are your boss. All of your customers are your boss. All of your investors are your boss. Everyone in the media is your boss."
The most bosses he ever had is at Evernote, Libin said, and the more successful you get, and the more you grow, the more bosses you have.
- To have more flexible time
"You do get more flexible time as an entrepreneur. You get to work any 20 hours a day that you want," Libin joked.
Want a successful work-life balance? Don't be an entrepreneur.
- The right reason:
In short, he said, there really is only one correct reason to chose to be an entrepreneur: to change the world. To, as Steve Jobs put it, "put a dent in the universe," to leave the world a better place than you found it.
So who should be an entrepreneur?
"Well, you, if you're doing it for the right reason and you're completely prepared and willing and able to and, most importantly, can afford to fail."
Failure, Libin, said, makes you more likely to succeed later on, and also gives people a good story to tell.
Why is now the best time to be an entrepreneur?
"The reason that right now is the best time in the history of the universe to start a company that you think could change the world is that it's different now than it ever was before," said Libin.
Evernote, he said, is "operating in a different world" than his first two companies: Engine 5, a leading Boston-based Internet software development company, that was acquired by Vignette Corporation in 2000; and CoreStreet, a provider of smart credential and identity management technologies to governments and large corporations throughout the world, was acquired by ActivIdentity in 2009.
The world right now, specifically the consumer product world, is spreading quickly to enterprise and numerous other categories. It is a meritocracy, meaning that if you're good, and make a good product, you can succeed.
All of the things that used to take precedent over the quality of the product, such as distribution, relationships, advertising and channels, no longer matter as much, though those things do still matter somewhat.
If you think you've made a great product but no one knows about it, then your product is terrible. he said.
"You can't make a great product and have nobody know about you," due to app stores, smartphones and social media.
If you've got a crappy product, you can spend all the money in the world on marketing, but it won't matter. You will not succeed.
Where should you be an entrepreneur?
Having lived in Boston for 19 years, starting and selling two companies, and yet Libin said that he never felt like he was from there.
"All of the meetings started with, 'Oh, well, who do you know and how did you get here?' and it was all about establishing my bona fides," he said. "Then I came to Silicon Valley. The day after I arrived here, the very first investor meeting I had, the attitude was like, 'Well you had the good sense to move here, so you're from here."
There was immediate acceptance, even if they didn't give him any money, he said. And if you're in the Valley, you should take advantage of the fact that some of the greatest people in business are here.
But, ultimately, where you are does not matter.
"You should start your company wherever you have your small team of best friends that are hypercompetant and super passionate and are willing to work endless hours for free, and produce you a great product," said Libin.
Having that team of people is more important than being in Silicon Valley, since the world, as he noted earlier, is such a meritocracy.
Check back on Tuesday for the conclusion of Libin's advice, including the when, what and wa-how of being an entrepreneur!