You can and will be a Hall of Fame slugger if you fail seven out of 10 times at the plate in Major League Baseball. It takes a batting average just north of .300 to get there. That’s in the “Majors.” As good as it gets.
That is a 70 percent failure rate.
But we expect our employers to step up to the plate and knock it out of the park every time. That’s a remarkable mental disconnect, isn’t it?
I love sports metaphors for life and business because they are so uncannily accurate.
I think it speaks volumes about the games that we play, and how seriously all sports affect us. Remember that cliche, work hard, play hard? I know, as Americans, we do that better than anyone else in the world.
When I talk to entrepreneurs about startups, I tell them what I learned investing my own money. On a good year, I had about .342 average just like Babe Ruth, and during a great year, a Ted Williams like .406 (Which, I might add, he only accomplished for one season).
I ask these highly motivated entrepreneurs to look at the people on either side of them and know their business will likely not survive.
It’s no better in corporate America.The statistics on new product successes are about the same. 70 percent fail. 30 percent succeed.
So, we know that:
- Some “Artificial Intelligence” companies are going to fail.
- Some “Green Energy” companies are going to fail.
- Some “Software” startups are going to fail.
The beauty of capitalism is that it’s a self-organizing chaotic system. The emphasis is on “self-organizing” It’s a whole different thing when the government gets involved.
The government will spend your money with reckless abandon in a futile attempt to justify their “economic development” investment in a buggy whip manufacturer. They will pick unqualified people who have the right political connections to receive the money extorted from their constituents, and those same unqualified people will find a way to line their pockets from the public treasury.
Private industry does not have the same amoral obsession as bureaucrats. The business world has balance sheets, which are factual. If you continue to lose money, it’s likely you won’t have money to pay the power bill, and the lights will go out.
Like sports, it’s a numbers game. You lose, you head to the showers. If you’re smart, you make corrections, and we will see you again next year.
The other thing we know is that about one-third of these startups will position the communities where they are located for future success. But you can’t get to those diamonds without moving around a lot of dirt.
Our beloved Wheeling area has historically driven entrepreneurs away. The number of times I’ve heard that “so and so” is bankrupt because their latest venture failed makes me want to wretch. Most people don’t know what bankruptcy is, the difference between a business one and a personal one, but they KNOW it all, and if their business goes down, so does the entrepreneur.
The rumor mill is why I don’t do startups in Wheeling. It’s not worth the commentary from the know-it-alls. So, I invest in startups that create jobs elsewhere, because the environment in Wheeling is just too toxic.
Wheeling needs to understand that the steel industry is not coming back. The coal industry is not going to come back to its former glory. I do appreciate them both, and the fine people who make a difference in legacy industry, but truth is truth.
By measuring every startup in the Ohio Valley by this hundred-year metric, and by families carping that “Johnny is out doing this stupid startup when he could be making real money in the mill” pins us in a corner where we don’t have a back bench. That means we don’t have a future.
We do not have new companies vying to make it, and to be the critical new employers we need in this Ohio Valley.
Who’s on deck? Well, no one. It shows, too.
“I have not failed. I’ve just found 10,000 ways that won’t work.”
― Thomas A. Edison
For the record, investors are more likely to invest with an entrepreneur who had a business that didn’t work out. They learned what worked, and more importantly, what didn’t. Were they too early to market? Too late? Did they chase a market that really didn’t exist? So much to learn, and so little time.
So far, it’s the Wheeling community that has discouraged entrepreneurs from doing start-ups. They have done it actively, too.
Let’s face more truth – you miss 100 percent of the balls you don’t swing at.
Wheeling does not swing at many, and when we do, there is a propensity to pick big picture snake oil salesmen who doesn’t have the business chops to pull it off.
So, go hug an entrepreneur. If you like their business proposal, get behind them.
If you have some money to lose, invest with them, and fully expect the money to go away. That way, you’ll be pleasantly surprised if you get a return.
Then, take a piece of your winning and invest again. Trust me, it’s more fun than the casino!
Wheeling needs startups. The community culture about business needs to change. And we need business to fail on its own. We need this to happen now, and for it to happen quickly.
By failing faster, we will succeed sooner.
