The thing is, most businesses fail. I keep hearing slightly different statistics on this, but roughly speaking, any given random American business has somewhere around a 98% chance of failing in the first five years. This means that if you are trying to start a business and you listen to others who are trying to start a business and you hear the same kinds of thoughts and business strategies from them as you are using, the chances are extremely good your business will fail.
In other words, common sense is utter trash for starting a business that works. Pragmatic sense is important, I’m pretty sure, but common sense is entrepreneurial poison. So if we “try to get people to pay [us] for stuff” using our naive intuition, we will probably just lose the business game.
I keep hearing slightly different statistics on this, but roughly speaking, any given random American business has somewhere around a 98% chance of failing in the first five years.
“While it is well known that most start-up businesses fail, the uniformity of that failure is generally under-appreciated by members of the general public. Historically the rate of start-up failure in the US has been in the range of 98%, however, since the 1940s this has declined to ~5% of all new business enterprises.[1]”
Better than you thought, perhaps, but the mortality doesn’t go away:
“In 2009, the Japanese business analysis and survey firm Tokyo Shoko Research (a combination of Dunn and Bradstreet and TRW in Japan), conducted an examination of the founding dates of the 1,975,620 enterprises in their database.They found 21,666 companies which have existed for over 100 years. The Bank of Korea conducted a similar evaluation of their database and found that there are 3,146 firms founded over 200 years ago in Japan, 837 in Germany, 222 in the Netherlands and 196 in France. There are 7 companies in Japan over 1,000 years old; 89.4% of the companies with over 100 years of history are for profit businesses. However, a closer examination of the history of these long-surviving enterprises reveals that many underwent takeovers, buyouts and essentially a complete restructuring of mission and the nature of the business the firms were engaged in – often more than once in their history. Thus, the chances of a business entity (excluding religious and academic institutions) surviving for >100 years is 1.096%.”
If those two quotes don’t help, possibly other statistics in Darwin’s article would?
Hah! That’s pretty clever!
The thing is, most businesses fail. I keep hearing slightly different statistics on this, but roughly speaking, any given random American business has somewhere around a 98% chance of failing in the first five years. This means that if you are trying to start a business and you listen to others who are trying to start a business and you hear the same kinds of thoughts and business strategies from them as you are using, the chances are extremely good your business will fail.
In other words, common sense is utter trash for starting a business that works. Pragmatic sense is important, I’m pretty sure, but common sense is entrepreneurial poison. So if we “try to get people to pay [us] for stuff” using our naive intuition, we will probably just lose the business game.
So, what to use instead of naive intuition?
I really don’t know!
From Mike Darwin’s “The Armories of the Latter Day Laputas, Part 5”:
Better than you thought, perhaps, but the mortality doesn’t go away:
If those two quotes don’t help, possibly other statistics in Darwin’s article would?
Ah, this does look quite valuable! It’s not quite what i was looking for, but it’ll be helpful nonetheless. Thanks!