Fallacies of Entrepreneurship

Jay Goltz had a brilliant posting about the beliefs on entrepreneurship in NYT's You're the boss blog. According to Golzt, there are eight delusions which are for some reasons for starting a business and for some others reasons not to follow that road. Here you go:

1. Any new business has a 50-50 shot at succeeding. Yes, according to the Small Business Administration, the failure rate of new businesses is around 50 percent after five years. That statistic ought to be scary enough, but the odds of your business succeeding may not even be that good. Some ill-conceived ventures have no chance of succeeding, and others may have a 75 percent success rate. It is not the flip of a coin. It is about execution and the need in the market place. With new ideas, it is obviously harder to predict. What do you think the failure rate is for opening a McDonald’s restaurant?

2. It’s all about finding the new thing. Most new businesses are in fact not big new ideas. We all read about the Groupons, but the vast majority of start-ups take an existing idea and try to do it better. Plenty of people have made fortunes this way.

3. Starting a business now offers more stability than holding a corporate job. While it’s no longer conventional wisdom that corporate jobs offer stability, any suggestion that going into business for yourself is a way to find stability is laughable. Maybe nothing is stable.

4. I want control of my own destiny! Can a phrase be an oxymoron? If it is your destiny, you don’t have control. That said, if you own your own business, you can say that you are responsible for yourself — for better and for worse. At its core, that is what being in business for yourself is really about.

5. I want to set my own hours! This might be the cruelest of them all. I’m sure that there are some business owners out there who have succeeded at working whatever hours they like. I am also sure that far more are working more hours than ever before — and many for less money, if any.

6. I’m going to start my business as soon as I raise the capital. We read about all of these new ventures, mostly high tech, that get start-up financing from venture capitalists. But the reality is, most new entrepreneurs get money from their own bank account, their parents, their 401(k) plans and anyone else they know. Sure, there are angel investors out there — but not nearly enough to go around. Banks don’t generally finance start-ups, and if they do, the loans are well collateralized. That means that if you fail, you lose the money in the form of your house or whatever you used for collateral.

7. Do what you do well and delegate the rest. It’s a nice theory. It has some truth to it. But the reality is that you need to know enough about everything — even if it’s just to be able to hire the right person and oversee that person. Many people, for example, want to have little to do with the accounting. And it’s possible that these people will get lucky and find someone who will completely take over their accounts, stay forever and do a wonderful job. Or not. If they don’t learn something about accounting, they may also find themselves bankrupt. Not a risk you should take. Know enough.

8. I’m tired of making money for other people. I really find this phrase offensive. Did you not get paid? Did you not make money? Are you really so critical to the profitability of the company that employs you? Get over yourself. There is no great nobility in being tired of making money for someone else. To me, you just sound like a disgruntled employee. If you start your own company and have employees, you may eventually be lucky enough to have people who will get tired of making money for you. I’m already tired of you. How about telling people that you’d like to go into business for yourself? Period. No further explanation needed.

Arrangements for entrepreneurship are ok, but...

In our interview on national GEM results in Kauppalehti magazine we continue the discussion about the lack of growth-oriented new entrepreneurs.

The results show that the prevalence Finnish early-stage entrepreneurs is continously lacking behind the rest of the world and other innovation-driven economies. Even if many barriers potentially inhibiting the engagement in entrepreneurial activities and growth are demolished in Finland, the whining is still loud and strong: "It costs too much, there is too much bureaucracy involved, etc." The worst case is when the institutional organizations amplify these messages. That simply sucks big time! However, on the hand those new entrepreneurs, who employ others, don't whine so much, and they dont' get squeezed by institutional forces.

So, the question remains how to make at least someone belonging in the former group more positive on everything. Being a mundane is fine and ok, but still some of them have brilliant ideas and surely someone has recognized kick-ass opportunities. Those are the chance, right?

Link to the story (in Finnish).

Again something else

Well this has (again) little less to do with entrepreneurship in Finland, but it's a brilliant idea.

The software is state-of-the-art

Research network on social entrepreneurship

Their website will be launched today: http://www.finsern.fi/

Incentives lead to behavior, right?

Nokia, the former Finnish No 1, had their summer job ad on Sunday's paper. It was for summer trainees, but it was so highly pimped up that it was a bit funny. Or how this sound like for ordinary production line work with high likelihood for monotonically repeating of the same thing over and over again: "Are your the Nokia Future Talent?...As an OPERATOR you can show your skills in assembling wireless hand-held devices or packing finished product ready for sending to customers...you should be ready for working in four shifts...".

Sounds tempting?

Following this, today's post topic's short sentence has lot to say. Where are the incentives for entrepreneurship among younger Finnish adults? Why they won't try their wings by doing what they like to do and getting paid at the same time? Assuming that the liking in question is legal and something that someone is willing to pay for....