Read an Excerpt
STARTING
The Global Pioneer Spirit
Rare is the person who gets rich working for someone else. Knowing that you are tempted to withdraw your savings, staple a resignation note to your boss’s forehead, and walk away from the corporate world forever. Just the thought of never having to sit through another one of those dumb company-meetings… you know the ones… everything that can be said has been said but not everyone around the table has said it yet… is enough to make you tizzy with excitement.
You are not alone in your desire to be your own boss. According to a 2016 survey released by the University of Phoenix Business School, some 39% of employees hope to own their own business. Think about all the money that companies pour into creating employee loyalty. In the end 39% would rather be someplace else where they don’t have to waste a whole month filling in performance and appraisal forms, or sit in a meeting room for as long as it takes to come to consensus that the best idea really was the one the boss had, which of course it hardly ever is.
Perhaps instead you have been a homemaker for a couple of decades having postponed your dreams to raise a family. Now the kids have flown the nest, and you are at a loose end. You still, however, hold a desire to fulfill the potential that you know you have, but that everyone else around you seem to have forgotten.
You are not alone in your desire. Every month in America alone, 500,000 people start a company. Women create half of all the start-ups, and immigrants start twice as many companies as people born in America.
Contrary to what many in the media would have us believe, the statistics clearly show that the pioneer spirit in America is alive and well. These are happy statistics that fill us with hope for the American dream.
America, however, has only 5% of the world’s population. According to the Global Entrepreneurship Center, 472 million nascent entrepreneurs are trying to start 305 million firms. This year alone. The country variation is substantial, from the 19 thousand people in Iceland trying to establish about 8,000 businesses to 107 million in India starting 85 million companies.
Tel Aviv has the highest density of start-ups anywhere in the world. In 2017, the United Kingdom saw more than 500,000 start-ups for the first time. London ranked as Europe’s “most successful start-up ecosystem,” and its output is half that of Silicon Valley. The start-up ecosystem in Sao Paulo, Brazil, is growing rapidly and creates more local community jobs than Silicon Valley does for its own. Start-ups then really are a global phenomenon, especially since the recent industrial revolution that created technology for anyone to start a company anywhere.
The one depressing statistic is that half of all of them fail within a few years. That is shocking, but more so when we realize that 82% of failures are for the same dumb mistake. Part one will show you how to avoid joining the negative statistics by starting up the right way. I have promised you secrets. Here is the first one; No matter where you live, and no matter the state of your economy, most of the companies that didn’t make it did not go bankrupt due to cash-flow problems. They were doomed right from the start and even before they built their eye-catching website. In part one we will look at the reasons why, discuss what to do about it, and how to avoid the same trajectory.
A second secret is that despite the fact we have moved from an industrial age into an information age, most start-ups fail to adapt. We live in an age in which technology upgrades can change markets overnight. Companies and their leaders need to be able to adapt rapidly to constantly changing circumstances, but most new start-ups commit all the sins of the industrial age. They are too bloated, inflexible, and unskilled to react quickly enough. I’ll show you how to structure in a way that gives you the best opportunity to survive long enough to hit the home run.
Amir V. Bhide, author of The Origin and Evolution of New Business, is considered a leading expert on what it takes to succeed or fail as an entrepreneur. His study examined hundreds of successful ventures, and he concludes:
Coping with ambiguity and surprises is more important than foresight, deal making, or recruiting top-notch teams. Entrepreneurs don't need unique ideas and venture funding. Rather, they must be able to adapt quickly to changing business conditions.
The third secret is that every entrepreneur already has the recipe for success, but most don’t realize it. It is not about talented teams or product benefits. It is about you and your mentality for success. There really is a thing that is called the millionaire-mentality. Exposing it requires you think in a different way. If so many companies fail despite the availability of CEO support groups, start-up business advisors, blogs, and courses then there has to be something wrong with the way the majority of entrepreneurs think.
In 2002 I came across a small book that was a summary of a Harvard study into why so many small businesses fail. The book discussed the importance of knowing your industry, being able to identify competition, doing what you love, and the value of being well capitalized. I devoured every word in the many case studies, but based on my experiences I drew different conclusions than that of the Harvard academics. Knowledge is not important, you don’t know your competition because the day you start your company is the day it changes, never start a company doing what you love or even what you are good at, but yes, being well capitalized is essential.
A few weeks later I had the privilege of meeting with George Rathmann, who Forbes Magazine in 1999 described thusly:
George Rathmann is the Bill Gates of biotechnology... Like his high tech counterpart,
Rathmann has an uncanny knack for timing: He pinpointed a new industry ripe for rapid growth, one that needed both a technologist and an entrepreneur. Like Gates, he built the single most prosperous company his industry has ever known, the Southern California-based Amgen … And like Gates, he has become a legend in the process, taking on, at times, a godlike aura in the eyes of industry insiders…
I was invited to do some consulting projects for a start-up biotechnology company that rented space in the same building as Icos Corporation, and Rathmann was then Chairman of both firms. He knew I was in the process of raising funds for my own company, and that the consulting project was to provide me with some income during the early stages.
Over dinner, and purely out of curiosity, he asked about my company, and when I started to wax lyrical about the business plan and why its structure would give it a better chance of survival, he held up a hand to silence me. He said, “You do not know what business you are in until you get into the business. Just get started and adapt from there.”
It is the best piece of business advice I ever had. Sadly, George Rathmann passed away in 2012 at the age of 84, but I can hear his voice in my head every time I meet a potential entrepreneur wielding a hundred-page business plan.
We start with the imperative of having a winning idea. If you just want to be yet another landscaper or plumber then this book is unlikely to help. If you want to make a business out of doing what you love, I suggest you think again and read on. If you think you can get success by writing a business plan straight out of a MBA class lesson then you desperately need to read part one.
