Good post overall BTW.
…
What an emotionally manipulative, fallacious post.
Don’t tell Batman!
What an empty retort.
But amend that statement to *“if you think you have a great idea for a business BUT you actually have no clue what you’re talking about, keep your day job” * and you got the zeroth rule of starting your own business.
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(a) That as a rule risk-taking is morally superior to playing it safe.
(b) That “working for The Man” is somehow morally inferior to working for yourself.
As a corollary, many people seem to conclude from this that being at peace with “working for the man” or deciding the stars aren’t right and you can’t take the risk is a sign of weakness, sloth, cowardice or defeat; and depending on where they sit, that The Man will deliberately disempower the working stiff from being able to take the next step without an excessive risk (e.g. leave job, lose health insurance), or, conversely, that those who gladly accept the risk are somehow better, superior beings who deserve to succeed.
Get past these positions and then we can fairly discuss that there are combinations of the person, the place, the time and the risk/benefit calculation that determine if it’s worth it to take the risk. Failure at business is a symptom of failure as a person IF you went off half-cocked into some doomed boondoggle, showing lack of foresight and prudence. Being a responsible citizen who feels that the security of the roof over the kids’ heads, the food on their table and the tuition for the school is not to be risked does not make you weak, inferior or mean you are cowed by the system, it’s an entirely honorable position to take and it should not be condescended to by the more entrepreneurial.
If you did your level best and merely failed fair and square there should be no dishonor. And if having to downsize from a $5M home to a $1M one shames you before your social circle, maybe it’s your social circle you need to downsize.
Dang good post and points there JR.
Oh sure, its the nature of rhetoric - whether its politicians or commencement speakers trying to motivate folks on the power of hard work, grabbing opportunity and the American Dream. And, to some extent, they are right - it DOES usually take both hard work and grabbing opportunity. But the story doesn’t leave a lot of room for “I was lucky, I was born with talents, I could afford to be patient and waited until I had knowledge and a reputation within my industry, I would have never gotten those first few clients without my Dad’s connections, without my spouse’s health insurance and income we would have gone bankrupt in a year”
And, nice post JR…
This is a tangent, but there are other kinds of shame. Particularly, someone in that situation is going to feel *personal *shame. Even if nobody in his social circle changes his opinion about the Less Rich Guy in even the slightest, LRG is still necessarily comparing himself to them, and is judging the value of what he has now not in absolute terms, but as it stacks up against what the people around him have, and what he used to have and now doesn’t. Given enough time he’ll get over it and normalize his expectations to his new surroundings, but it’s almost inevitable that there’s going to be an emotional crash for this guy; it would be an *exceptional *human being who could just let that roll off his back. And still having a million dollars in the bank doesn’t make it wrong or crazy for LRG to be sad – should you not be sad about losing your job and savings because some guy in Zimbabwe thinks it’s crazy (as just by virtue of your being an American you’re still preposterously well off compared to most of the world)?
And yes, those were good points, JR.
It’s disingenuous for Romney to talk about starting a business. He started his career with Boston Consulting Group and then moved to Bain & Co. After becoming a vice president, Bill Bain, the founder of Bain chose him to run a spinoff private equity firm Bain Capital. Now while he was certainly a successful businessman, it’s not like he built some billion dollar company from scratch in his dorm room.
And “starting a business” doesn’t have to mean building a private equity firm or internet startup (although the barriers to entry for the later are pretty small). Go start a landscaping business or sell T-shirts or some shit. Anything besides sitting around your parents house bitching about how no one will just hand you a job.
You can also add the following axioms:
(c) Small companies are morally superior to large ones.
(d) Up or out!
(e) You should be Vice President\millionare\etc by the tme you are 30.
(f) Fake it until you make it!
(g) The entire concept of high performance “rock stars”.
(h) Gut instinct trumps thoughtful analysis.
(i) “Good social skills” is better than academic excellence.
(j) When can I expect my next promotion?
I don’t think it’s about taking risks. I think it’s about people feeling entitled to be lavished with money, houses, cars and bonuses for just showing up for work. No one wants to pay their dues and work their way up the ladder anymore. They want to hit it out of the park and be a millionare by 26.
Part of it is the way the system has been set up and how the media portrays it. Ever since I started working in the mid 90s, the press focuses on startup billionares and investment banker bonuses and celebrities and athletes signing multi-million dollar contracts. It creates a mindset that it is almost so easy that if you aren’t doing it, there must be something wrong with you. That if you are working a regular 9-5 job for a stable company, learning your products and industry, you must be some sort of chump.
The thing is, I think we need more innovators starting their own companies. I think we need less “best and brightest” types going to work collecting bloated salaries from investment banks, private equity firms and management consultancies.
What do you want politicians to tell you? Try as hard as you can to be born to wealthy parents?
Thanks. Stupid autocorrect.
I’d like politicians to admit that it takes BOTH luck and hard work. That its the rare person who succeeds without both. That lifting yourself up by the bootstraps is great - but you have to have boots. That the people who do the jobs are as essential to the economy as those who create the jobs - after all, most of us do work for “the man” - we are neither creators nor unemployed - and we do contribute to the economy, pumping billions through it in the form of hamburger helper and tennis shoes for our kids. That simple stability has value to many people - not wealth, not growth - just knowing that next month your mortgage will get paid like last month.
Thats the worst spelling of vodka I have ever seen
That gets pretty close to the heart of the matter, I’d say.
Romney played it safe. He took not one serious risk.
For someone like that to tell OTHERS to take risks is…yeah, it’s disingenuous. Not that it makes him a bad person…it just makes him a privileged leech.
At the opposite end of the spectrum is Steve Jobs. He grew up middle class, barely had enough money to EAT while he was in college, started his own business, and became a billionaire.
One might say that he was in the right business in the right place at the right time, too.
Yeah, neither one of those guys accomplished everything in life through sheer hard work and brilliance. Romney had family connections and intelligence, Jobs had brilliance and luck.
And I really agree with you that middle-class workers are hearing that their lack of millionaire-ness makes them somehow inferior, and I find that fact ridiculous.
The middle class is the glue that holds any society together. It needs to be recognized for that, regularly, constantly.
This is one of my pet topics, and it runs deeper than a lot of people think about.
To my mind, (and I don’t want to take success away from anyway with this post) - some of the undiscussed advantages of “wealth” include:
a) If you ocme from a background of wealth, well off or even middle class, you will have seen many examples of people that have done it and succeeded - this makes a big big difference
b) Access to finance - this is much easier when there are wealthy family friends you can tap on, or introductions to venture capital, or even good old assets to put up as security
c) Intangible support - people that come from a better off background, tend to hand around more intelligent people, have access to more educated and analytical supporters to bounce ideas, this inevitably leads to a better understanding of the risks and how to mitigate them. It also leads to a more “solid” business plan.
d) Other support - how many cases have you heard of building the business in the garage or basement - that’s a bit hard if you don’t have the garage or basement to start with.
I see many cases here all the time, the kids live rent free with mum and dad while they start the business. Or all the “start-up tools” are provided, or the idea came from a trip they never would have taken if they were not wealthy, or is supported by a skill that cost thousands to attain.
I’d say (c), (h), and (i) could go directly with my original set - assumed premises about some fundamental value of business life that have somehow permeated the culture. The others in your list become a Part Two, being, as you point out, constructs generated from the system by those claiming there’s a corollary of “therefore the fast-shooting climb is the rightful way; safe, slow and steady progress is for grinds”.
And the fact alone that 50% of small businesses fail is sufficient enough to show that the advice of telling someone to start a business to make money is faulty.
And, yes, I think the majority of those people at least had enough money that, if the business went bankrupt, they would not become homeless. That’s a cushion, and that’s exactly what a lot of people don’t have.
The risks of failure are very high for all startup businesses.
That is why you need a LOT of things to succeed:
-access to funds
-good marketing plan
-dedicated workers
-your personal attention (24/7)
It is NOT easy, and it is easy to fail. Take my grandfather-he owned his own restaurant for 42 years-it failed because the neighborhood went bad, and he was too old to start over.
The best thing is to start small, and fund your expansion out of current income. But a recession can come along, and wipe you out.
In any discussion of this subject, you will often see some stats bandied around about how many new businesses fail in their first year or in the first five years. This drives me mad.
First of all, it is almost always a bogus statistic. Ask the person supplying it to back it up with a cite and some data and they will very seldom be able to do so. It’s just ‘what they heard’. Yeah, like that tells us anything.
Here’s the truth. If you’re talking about business started up by reckless, impulsive idiots who can’t figure out that sinking their life savings and a ton of debt into a business run on guesstimates and wishful thinking is a bad idea, then yes, a very high percentage (bordering on 100%) of those business fail.
If you’re talking about businesses started up by people who come up with a realistic idea for something that might actually make some money, approach it cautiously and conservatively, don’t part with a penny more than they have to, keep things simple and small to begin with and allow the business to grow organically, then I’d say about 95% of them succeed, one way or another. They may not always succeed as initially intended, but that’s a different matter. Sometimes experience teaches us which way to go.
The problem with these ‘50% of businesses fail in the first year’ stats, apart from being largely made up, is that they lump everyone together: the impetuous brain fade money slingers and the cautious, conservative ‘start small’ brigade.
I’ve run my own business for 12 years, and I love it. The only risk I took when I started was the ‘risk’ that staying in the same dull, soul-leeching desk job for the next 30 years might be somehow more fun and rewarding than doing my own thing and living my life for me. Not much of a risk.
Many people have invested in businesses that have failed without a “safety net” and either file bankruptcy or slowly pay of their debts. I know several.
Many people have invested in a business and after years of hard work and determination became successful. It’s a slap in the face for someone who has never had to put their ass on the line to denigrate all the hard work of self-employed endure to become successful.
Yes, there are a few who already have money and it’s more of a hobby if daddy is footing the bill, but most businesses are not started that way.
The people who the “start a business” brigade are addressing aren’t those successfully employed in good jobs, but those who are unemployed and told that they should be starting a business instead of complaining about it. Sure many people who are unemployed long term are smart and efficient, but you are also going to find more than the average share of those who are not very clever. So they will fall into the impetuous bucket very likely.
I’m sure we can find statistics on the number of businesses which fail in a year, but your claim of 95% is bogus on the face of it, since you are saying those with the skill to make a business successful will be successful, as measured by being successful.
The only metric I have for new business success is the number of small restaurants which pop into and out of existence near me.