WHAT’S IT ABOUT?
Some interesting facts about becoming an entrepreneur
Great entrepreneurs are comfortable enough in their own skin to build strong teams to support their vision.
How serious you are about becoming an entrepreneur depends on how much time you’re willing to spend on working on, thinking about and testing your ideas even as little as 15 minutes a day.
Never Too Late to Start
If you’re looking for a set of traits for what makes a successful entrepreneur, this article is not it. You can enter that question in your Google search bar to bring up with dozens of articles and extolling the virtues of passion, resilience and a plethora of other adjectives to describe what it takes to make it as your own boss. This article focuses on other stuff like age, profile, and correct thinking on what it takes to have a chance at attaining success as an entrepreneur.
Let’s start with age. The good news is that you don’t have to be a twentyish computer or marketing whiz. According to a study by Harvard Business Review contributors Pierre Azoulay, Benjamin Jones, J. Daniel Kim, and Javier Miranda, the average age of a successful startup is 45. You read that right. To a millennial, that’s dog years and for many others, that sounds about right. What’s more, the research found that the probability of success for startups increases with age, peaking in the late fifties, thus debunking the myth that successful entrepreneurs tend to be young. To be fair, the average age of founders varied based on industry. When the researchers examined the average age of founders who have won TechCrunch awards over the last decade, the average age of the founding was 31 and according to Inc.’s fastest-growing startups in 2015, the average age of the founding was only 29. Yet when looking at a high-tech hub like Silicon Valley, the average age of high-tech founders fall in the early forties. According to the Ewing Marion Kauffman Foundation, high-tech startups are twice as likely to be founded by someone older than 50 as opposed to someone younger than 25. Score one for the middle-aged crowd.
Typically, when you hear the word startup, it conjures up images of twenty-something computer geeks, programmers, and coders working feverishly to become the next tech giant. In truth, the vast majority of new businesses owners tend to come from various backgrounds and industries remaining as small operators such as a local flower shop, cafe or dry cleaners. These businesses shouldn’t be discounted, as entrepreneurship spans the spectrum from Main Street to Silicon Valley and Wall Street VC-backed growth companies. Understanding that many entrepreneurs begin their early to mid-forties says something about experience or the amount of time these individuals spend in the workforce before deciding to become their own boss. The Internet is filled with stories of high-level executives and professionals having grown tired of their corporate jobs striking out on their own. There are always exceptions. Bill Gates of Microsoft was a college dropout as was the late Steve Jobs of Apple. Both men bucked the traditional route and forged their own path at an early age and without attaining a post-high school education proving that educational level and profession are no barometers of business acumen.
Still nearly half of respondents to the Census Bureau’s Survey of Business Owners stated they held a bachelor’s, master’s, doctorate or professional degree with the other half having at least a high school diploma, some college and associate’s degree or some college experience. Approximately 65% of these business owners did not own another business before becoming entrepreneurs. Along gender lines, women who started a new business accounted for 28% of the total of surveyed business owners compared to 37% of male founders.
It’s All About Profitability
Undoubtedly, new business formation is a signal of economic growth; however, the survival rates for startups shows the challenges of operating a successful startup. The chart below highlights the survival rates for startups over a five-year period.
What about venture-backed startups? Well, according to PayWall, 75% of startups fail and the failure rate for all U.S. companies was 50% after five years and 70% after 10 years. Yikes. New business survival rates get much press; however, according to Timothy Ferris author of New York Times bestseller, The 4-Hour Workweek, the financial goal of any startup should be to generate a profit in the least amount of time with the least effort. Investors won’t argue with that.
More Ways to Become Your Own Boss
The Internet has spawned some tech giants such as Amazon, Google, and Facebook. It has also created opportunities for anyone to launch their own business and get into what is referred to the gig economy. MBO Partners estimates the number of freelancers, consultants, independent contractors and side “giggers” at 42 million and growing despite record low unemployment. Over the next 5 years, independent workers will comprise 52% of the workforce up from 47%. In today’s gig economy, it’s easier than ever before to work outside the conventional workplace making it appealing to those seeking a fulfilling work-life balance by owning their own business.
Companies like Amazon, eBay, Etsy, and Shopify allow anyone to sell general merchandise. Other sites like Poshmark.com and Grailed.com allow you to sell used clothing and accessories. Amazon’s little-known printing and manufacturing program called Merch allows anyone to upload their own T-shirt designs, earning a royalty that increases with sales meaning the designer doesn’t have to worry about spending money on manufacturing and fulfillment, which means little to no inventory. The minute a customer orders a T-shirt, Amazon sends the order to the closest shipping destination. If you don’t have anything to sell but your services, sites like Handy.com and TaskRabbit.com let you sell your time to customers that have small projects. You can also earn an income as a personal driver with ride-hailing services like Uber.com and Lyft.com.
Who’s on Your Team?
If your business idea is of the mom-and-pop variety, then building a management team may be far off. However, making the leap from business idea to a successful startup comes down to your ability to build a team that supports your vision and your willingness to delegate. Many entrepreneurs tend to keep information to themselves for fear of losing control or worse yet because they haven’t put enough trust in their employees. In many instances, it may be hard for an entrepreneur to admit that he is not good at everything, which prevents him from hiring the right talent. Without surrounding yourself with a team of people that you trust, it’s difficult to go from a business idea to a successful, thriving enterprise. Your ability to build a competent management team increases exponentially when you’re in need of VC backing. Investors look for startup ideas that are not only scalable but also an entrepreneur’s ability to attract and maintain top-level talent. In other words, you can’t run your business as a sole proprietor while also wanting to attract big-time investors.
If you’re a whiz at operations but your eyes glaze over when it’s time to discuss financial projections, hire a numbers cruncher, particularly someone who is well versed and comfortable explaining the company’s financials with investors. Likewise, consider adding to your team a strong number two like a vice president or a person that can execute your vision and articulate that vision to employees if you are not a great communicator. Titles are nice, but experience and capabilities are paramount. Your CFO should have the credentials and experience to identify critical metrics for achieving your company’s financial goals. Great entrepreneurs are comfortable enough in their own weaknesses to build strong teams to support their vision.
While the rewards of being your own boss are plenty, the hurdles and pitfalls are not for the faint at heart. Mona Thorpe of success-411.com has seen her share of business owners come and go. Ms. Thorpe runs her own executive recruitment firm in addition to running workshops to help individuals unlock some of the roadblocks keeping them from becoming successful business owners.
According to Ms. Thorpe, some of what gets in the way of entrepreneurial success are basic tendencies, like procrastination, repetitive mistakes, and/or not being able to put creative ideas into action. These traits are seemingly minuscule in nature, but pack a powerful blow to new companies on the way up or even longer engaged companies looking to attain the next level of success. Whether you are a “startup-preneur”, corporate executive or small business owner, these traits are just some of the stumbling blocks that have a hold on your ability to apply strategic change.
Ms. Thorpe asserts that without a stronghold on what’s fueling your basic tendencies that stagnate and impede growth, your probable outcome for moving past them are fairly slim.
The way to success is never losing touch with the most important assets you have, which are twofold. These are your desire to obtain your goals and your ability to put yourself in the unwavering mental attitude that nothing is unattainable. Your goals are only as far away from you as your ability to envision them.
Ms. Thorpe’s Success-411 program teaches a refocusing process that produces an alignment with the goals her clients are looking to achieve. When your focus is strong and your goals are clear, your abilities are sharpened and success is easily obtainable. The more proficient you are in the use of this process, the less you will be hindered when you encounter interference, whether that be with workplace politics, bureaucratic red tape, difficult clients or the general everyday challenges of business. The Success-411 process teaches clients to embrace challenges and succeed through them.