Question

Why is it essential to focus first on building a great company, rather than on just getting rich?

Please explain.

Answer 1

Focusing on getting rich can lead to a worse business. If you're starting a business to get rich, your long-term goal is to make the company as profitable as possible rather than to make the product as good as possible. While this is goal may be admirable over a long time scale, long-term thinking can bleed into short-term thinking.

Because your desire to get rich might indicate that you don't actually care about the problem you are solving. Whether or not this is actually true, many investors will construe your desire to get rich as a sign that you aren't motivated by the problem that your business is solving. If you don't care about the problem, you are likely to make poor choices in the solution and you may give up more easily. The best companies are those in which the founders are fascinated by the problem area, so investors may simply constrain their investments to that sort of company and ignore your company that just wants to get rich.

If you try to build a business solely for money, you will end up miserable; possibly rich, but most likely miserable.  

Now if you start a business, let's say it : At first, no income and probably two years will pass before you can pay yourself correctly. And this will probably be less than what you could have earned working for Google, Facebook or a bank. Of course, if your company is successful then you'll catch up later and you'll be glad you lived a bohemian life for two years because now you can overindulge yourself.

Now the failure rate. Most business fails in the first five years. You have more than 50% chance of earning NO money and be bankrupt. So most people will in the fact loose money when they create their business. They would have been better off chasing a corporate career.