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- Freedom From Ambition | #19
No. 19 — read time: 3 min
In the Fall of 1982, the FBI arrested the Founder & CEO of a young automobile startup, John DeLorean. The charge — trafficking cocaine.
Only a decade earlier, DeLorean was the youngest-ever VP at General Motors. A rising star, everyone believed John was on track to one day be President of GM. But it came as no surprise when he announced his resignation to pursue his ultimate dream. John announced he was launching a new automobile company — the DeLorean Motor Company. His vision was an eco-friendly sports car that would be affordable for the masses. It worked. John's pitch attracted $87 million (adjusted for inflation) in backing from investors. The flagship car, the DMC-12, made it into the box office hit film Back To The Future. John saw himself as the next Enzo Ferrari or Ferdinand Porsche.
Like most young companies, DMC was vulnerable to market forces beyond its control. Not yet profitable, the company banked on hitting its production numbers to turn a corner. A random blizzard in the U.S., an important market for the company, caused a downturn in sales. Suddenly, the company found itself on the brink of bankruptcy.
Desperate, and unable to attract a bailout from investors, John let his ambition get the best of him. He agreed to finance a cocaine transaction that would net him $67 million — enough to save the company.
As John and the dealers sat in the hotel room of a Sheraton near Los Angeles airport toasting the deal, agents from the Federal Bureau of Investigations walked in and arrested John DeLorean.
John was eventually acquitted but lost everything. The company bankrupt. His reputation all but ruined.
John DeLorean was neither the first nor the last to let his ambition drive him to ruin. In 1910, Billy Durant, the founder of the same General Motors resigned in shame from his company due to financial mismanagement. The culprit — ambition. More recently, the stories of Elizabeth Holmes and Bernie Madoff come to mind.
History doesn't repeat but it rhymes. Ambition left unchecked ends in ruin. Its a lesson as old as the Greek myth of Icarus who flew too close to the sun.
Western society believes ambition is virtuous. Something to aspire to. A trait, we're told, that separates the haves from the have nots.
But ambition, like most things in life, is nuanced.
For the aspiring entrepreneur, ambition might be the source of energy needed to put in the long nights and weekends required to make your dreams a reality, while still working a full-time job. Left unchecked, ambition could also be your undoing.
Ambition is often the close relative of another vice – delusions of grandeur. The mistaken belief that if you don't build the next Uber, you're a failure. Publications like TechCrunch and VCs on Twitter perpetuate this myth. The idea that if you build a small profitable startup, it's somehow only a "lifestyle business". As if there is anything wrong with having a life outside work.
My friend Louie Bacaj recently talked about it being a prerequisite to first prove to yourself you can make several thousands of dollars in self-employment before attempting herculean feats of making millions. Louie’s right.
Risk taking is a fundamental part of the capitalist experiment. We need to calculate and take risks. But the trick is finding asymmetric risk. Limited downside risk with high, or uncapped, upside. Leaving your 9-5 job to build the next big startup has a high chance of failure. Instead, curbing that ambition might lead you to make several smaller bets. If one doesn’t work, that’s OK. One failure in a diversified approach won't harm the entire entrepreneurial experiment. Pressure to blur moral and ethical lines in the name of ambition isn't a thing if one experiment (out of several) doesn’t work out.
As you consider your next venture remind yourself of John DeLorean. Don’t risk everything in the name of ambition. Don’t push in all your chips. And don’t think big, think small. If you succeed in taming your ambition, you'll increase the odds of making entrepreneurship work. And you might even end up happier.
Till next week,
-Tom
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