Read this article called How Capitalism Dies.
There are a bunch of interesting statistics here, like how many people now receive aid from the federal government. But more interesting is the long trend of businesses closing without a greater number opening to replace these businesses.
I do believe that business is more difficult than it has ever been. I also believe it is more competitive than ever. I also believe that in this Disruptive Age, there are tons of systemic challenges. But it isn’t so difficult that anyone with a good idea and the intestinal fortitude can’t start and run a business. How can it be that there are more classes on entrepreneurship and fewer entrepreneurs?
We need more entrepreneurs.
Why Entrepreneurs Fail
I haven’t seen too many serious entrepreneurs with really bad business ideas (with the exception of some technology entrepreneurs who get excited about counting things). Most of the time, the entrepreneurs I have seen have good, valuable ideas. Their hearts in the right place, and they really want to create something. But the one question I routinely ask tells me everything I need to know about whether or not they will succeed. That question is this:
“What is your client acquisition strategy?”
Entrepreneur after entrepreneur crumbles when faced with this question. They believe that success comes from acquiring investors. The worst belief they have is that they can take enough investor money and sell the company for some amount of money that stretches credulity. That isn’t entrepreneurship. Get rich quick schemes don’t make you an entrepreneur either.
There is no successful entrepreneur anywhere that didn’t create customers.
How Entrepreneurs Succeed
If you want to start and build your own business, you need a few things. You need a great way to create value for other people, value that they are willing to pay for. And then you need people who will agree to pay you for that value.
I’ve seen entrepreneurs start multimillion dollar business with nothing more than a laptop and the gumption to offer their services (I mean literally. They had nothing else.). I’ve seen entrepreneurs fail after investors poured millions of dollars into their business. The invested money wasn’t as valuable to their survival as the ability to gain paying customers would have been.
Capitalism isn’t going to die anytime soon. If you have it in your heart to start something, there is no better time than now. But only if you have the ability and the willingness to go and acquire customers. Without that, you’re a statistic.