Risk, Success, Etc. Part 100
99% of businesses fail. Or, whatever the statistic is right now when we next need to make up the statistic.
My question about business failure is this; who cares?
I am grouchy because after two weeks my hands still hurt when I try to type. I need to see a doctor really. So I’m still using this barely accurate text to speech software, and that’s the first reason I’m grouchy. Secondly, productivity has fallen as a result of the above. Thirdly, we have been spending our time planning instead of working, which always makes me grouchy.
Back to the dreaded statistic of business failure with the above as context for what is probably going to be a rant.
90% Of Businesses Fail
9/10 businesses fail because they should fail. 9/10 ideas you have are going to be rubbish and you have to deal with that and make allowance for that. That’s why I’m always talking about testing, running experiments and minimizing risk.
But 9/10 people failing at business has nothing to do with you. It’s one of those things that people say as if to dissuade you when you say, “actually I don’t want to be a subsistence wage earner for the rest of my life.”
9/10 people can’t do 100 push-ups. Does that affect you?
Well, if you are discouraged and never try to do any push-ups, then I guess it affects you. It shouldn’t affect you because is ultimately a meaningless statistic. It’s easy enough to get to 100 consecutive push-ups if you don’t have any debilitating condition.
If your business fails, then it was not the right business for you at that time. That could be for a million reasons; you live in the wrong place, you are intelligent enough, you didn’t take the right risks, the market contracted at the wrong time, it was a stupid business idea, etc.
It doesn’t matter. You have a choice: you either move on with a new idea or you don’t.
If you learn from your mistake, move on to a better business idea, persevere and work hard until you succeed, then you have the right mindset and it’s a mindset that most people don’t have. That’s why the failure rate is so high and so many people try business once and never go back to it.
Business Lightweights
I had a friend a few years back who introduced me to the concept of the business lightweight. He was into financial services and travelled the world doing so.
As such, he met a lot of people that were into the digital nomad dream and tried to offer him lifestyle consulting.
He coined these people as business lightweights, because they put very little thought into what business they wanted to run. Instead, they just tried to sell the dream and didn’t build any skills or long-term business assets.
Needless to say, these guys had-and still have-a high failure rate.
Remember, they go into the 9/10 figure. This is particularly true of the audience who read this blog who are mostly young, globally minded entrepreneurial guys.
When it comes to digital nomad stuff and Internet business, remember that most because you’re competing with don’t have any skills, don’t have any money and don’t have any long-term planning ability.
If you want to get into the 1/10 that do succeed, then cultivate those three things and you don’t need much else.
Long-Term Planning
So I have been doing some long-term planning due to my aforementioned (and probably boring you to death) injury.
When you get to a certain point in business, you have to start thinking like a business. I still very much go into business lightweight mode where I do what I want, as creativity strikes me.
If you want to get into that 1/10 that succeeds and stay there, then you need to think more about building safeguards and barriers to entry for your business.
You also want to think about how the business runs without you there constantly monitoring it.
Now, I’m not one of the people that things like Tim Ferriss and wants you to build a business that runs completely without you involved at all. I think that’s a bit of a pipe dream, and if you are the inefficiency in the system, then eventually the system will run without you.
That said, you have to move from thinking like a freelancer, or small one-man business to a more serious entity-based approach at some point. Whether that’s because you don’t have time for the manual tasks, you want to take a day or two off every now and then, or because you want to scale beyond what you are capable of alone, you need to start thinking about these things.
And once you have the infrastructure in place, this massively increases your chances of staying in the 1/10 people that succeed as business folk.
Final Thoughts
To summarise; forget the 9/10 failures that are referenced whenever somebody decides to talk about business. Instead, act smart, be better than the lowest common denominator of competitors, and do your best to run your business with as high chance of success as possible.
Just like 9/10 people not being able to do push-ups has no real bearing on whether you can do push-ups or not, 9/10 businesses failing has no real bearing on your success in business.
But your actions certainly do. So if you want success, then bring it about yourself. You are in control.