{"id":3683,"date":"2018-12-27T10:00:28","date_gmt":"2018-12-27T18:00:28","guid":{"rendered":"https:\/\/berkonomics.com\/?p=3683"},"modified":"2018-12-22T11:44:41","modified_gmt":"2018-12-22T19:44:41","slug":"risk-insanity-and-the-50-startup-rule","status":"publish","type":"post","link":"https:\/\/berkonomics.com\/?p=3683","title":{"rendered":"Risk, insanity, and the 50% startup rule"},"content":{"rendered":"

Fifty percent of all businesses formed fail within the first two years.<\/em>\u00a0 <\/strong><\/p>\n

There are many variations of this number since there are a number of ways to measure failure.\u00a0 But the number is a startling reminder that creating a business is not easy, nor is it any assurance of success.<\/p>\n

How to define \u201csuccess\u201d for a startup?<\/strong><\/p>\n

After speaking with many entrepreneurs over the years, each defines success in his or her<\/p>\n

\"\"<\/p>\n

unique way.\u00a0 To some, it is independence from the dictates of a boss who doesn\u2019t appreciate that person\u2019s talent, foresight, or abilities.\u00a0 To some it is financial security, building a base of wealth created from the increased value of the enterprise at the end point of sale or at an IPO.\u00a0 To others, it is simply a way to express a talent for art, cooking, consulting, management, development or more.<\/p>\n

Vision, risk and capital, oh my!<\/strong><\/p>\n

Everyone has a vision when starting a business.\u00a0 And few think of the risks that increase over time as initial capital is expended.\u00a0 We all see the examples of well-known successful entrepreneurs, many in our chosen field, who achieve success by anyone\u2019s measure, and we optimistically expect to emulate these role models with at least some level of success.<\/p>\n

Can you take the risk?<\/strong><\/p>\n

[Email readers, continue here…]\u00a0<\/em> <\/span>\u00a0The best advice to anyone considering this course of action is to measure one\u2019s ability to take the risk.\u00a0 That ability varies with economic status, age, responsibility to family, and more.\u00a0 If there is enough freedom to make that leap, then the journey can more safely begin.\u00a0 If not, there are alternatives, such as raising initial capital from friends and family, before leaving the life boat of a present job.<\/p>\n

Some say that taking the leap, burning the bridges, the life boats – or whatever security is left behind – forces the entrepreneur to focus like never before and succeed because there is no alternative.\u00a0 Although investors may respect that bold a move, it is so dangerously risky as to be a bit insane.\u00a0 Then again, with the fifty percent rule, aren\u2019t all entrepreneurs a bit insane to start?<\/p>\n

Next week: The eighty percent acquisition rule…<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Fifty percent of all businesses formed fail within the first two years.\u00a0 There are many variations of this number since there are a number of ways to measure failure.\u00a0 But the number is a startling reminder that creating a business … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[4],"tags":[],"class_list":["post-3683","post","type-post","status-publish","format-standard","hentry","category-ignition-starting-up"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts\/3683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3683"}],"version-history":[{"count":0,"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts\/3683\/revisions"}],"wp:attachment":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}