3 Out of 4 Will Fail: Raise Your Chance of Becoming the 1 That Won’t.
One of the wonderful things about our current internet culture is there are just so many ways to measure our almost certain failure before we even start anything – all immediately available with our next click or swipe. So it is with the recent stats on startups and the chances of entrepreneurial success. Or rather, of all the different ways that business experts can measure our likelihood of failing. Take a moment to enjoys these cheering varieties of prediction!
According to Bloomberg, “8 out of 10 entrepreneurs who start businesses fail within the first 18 months.” Nice! That’s an 80% chance of crash and burn.
From Business Insider, “60% of new businesses fail each year.”
Let’s not forget the ever popular: “90% of those who make it past the 18 month mark will fail within 5 years.”
During one very upsetting afternoon I tried to average all these numbers and the different ways to measure “failure,” and because I am not good at math and because all this is depressing as shit, I came up with my own Supertight Brand quote (here it is, are you ready?) “Three out of Four Will Fail.”
The mantra of likely failure is repeated across Forbes, Entrepreneur, Fortune, and more. While the figures may vary, one thing is consistent: the blame for failure is placed squarely on the shoulders of the entrepreneur.
What’s really crazy? These statistics often come from surveys of entrepreneurs. These same surveys rely on the entrepreneur to self-assess the reason his or her business went bust. Ummm, So. Even though if he/she could have accurately assessed at the time, maybe it wouldn’t have imploded? What?! But Wait! There’s more.
If we read the results of these surveys – and mostly we can’t help ourselves – poor marketing usually gets the blame, with lack of value proposition (UVP), or poor market research rounding out the blame-game trifecta.
Of course a business rises and falls on the shoulders of its founder, but here’s the thing: what if the entrepreneur doesn’t know what caused her failure? How is an entrepreneur who’s sitting inside her own failure supposed objectively to assess and quantify the reason for that failure? We call bullsh*t on that, friends.
Furthermore, what if I told you that entrepreneurs can ace their marketing, nail a value proposition, master their market research and STILL fail?
And now what if I told you that this failure most likely wouldn’t be the entrepreneur’s fault? What if I told you that there’s a pretty huge problem with blaming “marketing” that almost everyone seems to ignore?
Sure, some businesses will fail. It stands to reason that they will, especially with more and more entrepreneurs entering the marketplace every single year, and that number keeps rising (the stats on that we’ll save for another day). So it’s obvious the competition is going to keep getting more intense.
Some of the reasons listed above may often be to blame. But let’s take a closer look at a specific example.
In reality, the market for Daisy’s Home Pet Pedicure Kits may be too small to sustain a business. BUT just for fun, let’s say there’s a boom in home pet pedicures, and Daisy enters the market at the perfect time. She offers pedicure kits for dogs, cats, and iguanas, yet she’s worried that’s too small a market. So Daisy also sells leashes and collars, and she sweetens the deal by selling organic treats. She feels good because she’s selling a little something for everyone! Because she’s not eliminating any possible pet owner who might pay her money! Because she’s going to “test the market” and respond to the results!
Our Daisy does her research, sets the perfect price point, and uses her degree in marketing to get her business in front of every pet owner within a 50 mile radius. AND her business still fails. This would be all Daisy’s fault right? Not necessarily. It might just be that Daisy didn’t know how to focus her offer, or how to hone her brand until it was SuperTight.
In hedging her bets (“I have this cool pedicure thing that’s a wonderful remarkable solution for these three animals. And that’s my offer. But I am also going to talk about these other things I have for other animals just so I don’t miss out!”) Daisy is taking a bigger risk than she would have, had she kept the focus on her unique and remarkable product. This is what is known as diluting one’s brand, a potentially dangerous path that leads away from true expertise and back to general competence.
The moral of the story? If you are actually fortunate enough to come up with a product or service that has been missing in the marketplace, that has a real, actual UVP (Unique Value Proposition, meaning, for your specific customer it occurs as “The Only Place I Can Get. . . “) Don’t muck it up and cloud your brand by adding a bunch of other crap just because you feel a bit exposed, a bit vulnerable planting your own little flag that has no obvious precedent.
You can either be on The Early Show as the revolutionary inventor of the coolest iguana nail clipper ever, on National Lizard Day, or you can be out there pitching to pet owners about pet products. Trying to grow your social media. Yay.
And if you’re having any trouble sorting out why this is a brand issue and not a marketing issue, please hop over here and we’ll get this clear for you: The Difference Between Brand and Marketing and Why It Really F-ing Matters.