This B-School Prof And Serial Entrepreneur Tells Students That Starting A Company Is A Really Dumb Idea

Tube Centrex is not Khan's first company. He's a classic serial entrepreneur. He's the chairman of another tech/marketing company called One Public.

But unlike many serial entrepreneurs, Khan isn't convinced the path he's chosen is the right one.

In fact, when Khan teaches classes for MBA programs at Rutgers and Baruch, one of his messages for students interested in entrepreneurship is: don't do it.

In the Q&A below, Khan explains why.

You're a serial entrepreneur, but when you teach aspiring entrepreneurs at Rutgers and Baruch you tell them: Don't do it! Why?

There are few other reasons why I advise people against starting companies.

First, entrepreneurship is not a career. It is a very tough lifestyle that can consume your life or a decade of your short life without you getting anywhere from a career standpoint. Second, entrepreneurship isn't for everyone. There aren't many people in the general population that fit the entrepreneurial profile.   

Third, it has become way too easy to start companies - there are way too many founders who aren't entrepreneurs or shouldn't be entrepreneurs. 

Lastly, the entrepreneurial capital required to start a company has increased in the current landscape. For investors, surely, the financial cost of funding startups has decreased enormously but economic mobility of entrepreneurs is bleak. 

What this means is that more lives/careers of entrepreneurs/founders are at risk per million dollars invested by investors, if you compare today's boom to the dot-com bubble era. Investors are better off and entrepreneurs are worst off in the current landscape. 

So younger professionals should go work for a big company instead of starting a small one? 

There is no honor left in being startup founder/CEO, unless you are backed by a blue-chip VC. Further, if you don't have big company or VC-backed startup experience, it will be difficult to get a job at other VC-backed companies. You'll be discriminated for lack of coolness.

Even if you are a solid entrepreneur, you'll be better off having few years of solid big company experience. It also acts as an insurance. If your startup fails, you can go back to your old job.

Best time to start a company and fail without risking your career is probably sophomore and junior years for college and first year for graduate school students. If you miss the boat, focus on getting a job. If you absolutely dislike large corporations, go work for other entrepreneurs and help startups that have high chance of succeeding. 

You didn't. Do you regret it?

There is a fine line between vision and delusion. When you are an entrepreneur in your mid-twenties you don't know if it is your vision or delusion that is dominating you. I founded one of the first companies in the Facebook Partner ecosystem in 2007. Looking back, I think I would have been better off joining Facebook instead growing my business. 

Lots of people say starting a company is the hardest part of building a business. Others say failure is the worst part. You have a different take?

In the entrepreneurial life cycle, starting up is easier than other stages. Shutting down is the easiest.  Majority of entrepreneurs only get to experience these two stages: starting up and shutting down.

If your business is viable and successful, the next harder thing is scaling up a company. Then comes managing a scaled up company. For example, after growing to 100+ people (internationally) I've hit the wall twice. The hardest stage is scaling down.

There must be some great aspects of entrepreneurship, right?

Absolutely. If your startup is viable and successful your lifestyle changes and you get to experience things that most people would never experience in their lifetime.  The greatest aspect is financial independence if you are lucky to see a big exit.