Dec 17, 2017

Not in front of the children: why I put success before a family

There is no more sombre enemy of good art than the pram in the hall, wrote critic Cyril Connolly. But does the same uncomfortable aphorism apply to entrepreneurs? Will having children early undermine their business progress?

I deliberately avoided marrying and starting a family until I was in my 40s. For the first two decades of my career I was pretty selfishly immersed in my work, and did not want the distractions of being a husband and father. It meant I could take significant risks, because I did not have dependants. I spent all the time I wanted in the pursuit of success, never worrying that I was neglecting loved ones.

That has now changed — I took the view that after two decades of striving, I could afford to settle down. I also realised belatedly that business wasn’t everything, and that a life spent exclusively chasing material prizes was a hollow one. But I still don’t regret delaying fatherhood. I may not live to see grandchildren, but I think if I had married and started a family in my twenties or even early thirties, then one of two things would probably have happened: I would have been a largely absentee father, or I would have divorced. Of course, I write from personal experience as a man — female entrepreneurs typically have more difficult compromises to make.

It is undoubtedly true that society expects dads to be much more involved in the upbringing of their offspring than used to be the case. Generally, contemporaries of mine talk of their father as a distant figure to them when they were growing up. That level of parental participation would be seen as unacceptable now.

I seem to recall my father went to the secondary school that I and my three siblings attended just once — to deliver a speech. I go to one of our three children’s schools more every month than he did over 20 years. I do not resent my dad for that: he was incredibly focused on being a productive worker — and the culture was entirely different then. Even so, I know I am less active than many of the other dads who are much more engaged in the everyday lives of their children.

There is an argument that becoming a parent makes a young adult more responsible. Keeping a roof over your family’s head is a pretty powerful motivator for any entrepreneur.

I can recall the story of how a young worker came to see the tycoon for whom he worked one day and said that he was leaving to start a business. The tycoon asked if the would-be founder had a large mortgage; the answer was yes. “Good” said the tycoon. “You’ll be a big success then.” The tycoon knew that the pressure to meet that financial obligation would act as a vital spur: the would-be founder could simply not afford to fail.

In truth, I would say a good proportion of self-made captains of industry take the path of marrying fairly young — domestic stability and spousal support can be wonderfully fortifying to a demanding career.

I see the act of building a business as an expression of deferred gratification. Often founders earn less than they could working for someone else in the early years, but they are accumulating value over the longer term, as they grow capital with their ownership of an enterprise.

Typically, start-ups cannot pay their owners much salary initially — a fledgling company needs all its retained profits to invest if it is to grow. But sacrificing income can be hard if you want the best for your family.

I know plenty of bright employees who have the talent and ambition to be entrepreneurs, but feel stuck on the treadmill of monthly outgoings such as school fees and mortgage payments, which must be paid, come what may. So they are trapped, unable to take the plunge and risk their family’s welfare to chase the dream of being their own boss.

I am shocked at how much some founders expect to be paid from the very beginning. They feel an overriding need to maintain their lifestyle, and unable to compromise on their pay expectations, despite their salary contributing to a big initial overhead. I have rather a tough perspective on this conundrum — to me it is almost a moral imperative. Start-up entrepreneurs should generally adopt a frugal attitude and watch costs like hawks, since most early stage firms make losses. Trade-offs are part of the package.

I want to back very hungry founders, obsessed about developing their business and growing shareholder wealth through capital gains. Big salaries are for corporate fat cats: entrepreneurs get freedom, independence and ownership.