Why Entrepreneurs Fail

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Scenario: "Dude, we have to be frickin' profitable all the frickin' time! Yay!" You take Jimmy.

Jimmy wants to build a successful business.

He wants to ensure a 100% success rate in everything he does.

"If I lose money, then I will fail," he tells himself.

So, he studies business books, does crazy business planning, networks with the the business 'gurus' -- then grooms himself to be the biggest-baddest-coolest mutha-!@^^%^ in the business world.

"Everything I touch will turn to gold," he tells himself.

So he starts his web marketing B2B business, envisioning making millions within years.

First month in, he's getting negative cash-flow.

  1. Customers are late.
  2. Product cycles are long.
  3. Marketing not doing its thang.

He's losing money.

"Oh, crap. This can't happen. Since I'm losing money here, that must mean money can't be made here. I'll have to choose another route."

Quitting the web marketing business, he starts a web design business.

The web design business follows the same cycle:

  1. No money the first month.
  2. "That must mean you can't make money here!"
  3. "Next!"

A year later, he looks back -- then, notices he's started 12 separate businesses.

  • No success in any of 'em.
  • No money, no profits, nothing to show the world.

 

"I guess I wasn't meant to be an entrepreneur." he tells himself. "I give up."

Why Did Jimmy Suck?

What happened to him? Some possible answers:

    a) He wasn't made to be an entrepreneur. b) He quit too soon.

If you answered (b), ding-ding-ding-ding: corect-o-mundo to your badass.

It's excruciatingly tough to build a sustainable business that initially profits like a mofo.

Sure, you hear stories all the time on BusinessWeek, Forbes, or Fortune about some company making it big seemingly overnight.

  • But the odds of making it big with your business overnight is similar to winning the Powerball: it's freakishly tough -- and well, literally impossible.

For most thriving entrepreneurs, it took years of tears, sweat, turmoil, and dedication to build a sustainable system.

Most important of all: It took sustaining the momentum they built yesterday/last-week/month/year/yadda.

Why Sustain Your Momentum

Contrast serial entrepreneurs with those 'long-term' ones. Who's thriving like a mofo?

The ones who built on top of their experiences, then exploited those advantages every-single-frickin'-day.

Incessantly restarting your entrepreneurial career trashes whatever you took months/years/decades of learning.

  • It's like you're picking up basketball, then when seeing you're not the 'best' -- you start turning to golf, then to singing, then to filmmaking, then to -- yadda, yadda, yadda.

Then you sit back and wonder: "Why do I suck at everything?!"

To be a Michael Jordan, a Steve Jobs, or a Warren Buffett-- build on top of the sexiness that's already you.

Do it daily/hourly/every-minute/every-!@^^%^-second of your life.

Then -- seemingly 'magically' -- watch yourself rock as you capitalize on that momentum.

What Do We Mean?

Take this example: Dave's starting his web design business.

  • First quarter: He gets negative cash-flow, barely any customers, and horrible profit margins.
  • Second quarter: He decides to tweak his business model -- negotiating with contractors to lower costs, increasing rates slightly, reducing input/output. Profit margin jumps slightly.
  • Third quarter: He then automates his business with project directors to save time. To generate more customers, he works with a direct marketing firm.
  • Fourth quarter: Slowly, but surely, his profit margins increase -- and then some.
  • Fifth quarter:"Hey, we can also upsell our services with web marketing!" he screams. His profit margins fattens some more.
  • Sixth quarter: Ka-ching.

Instead of restarting, Dave builds on top of his sexiness -- slowly-but-surely creating one ridiculously thriving business.

Remember, you won't get there overnight; instead, it takes patience to build on top of the awesomeness that already makes you: You.

Sustain momentum.

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Posted on May 09

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