10.14.09
Posted in Uncategorized at 8:51 am by Administrator
There are two kinds of people – those that need control of things, and those with faith. Control of things includes all things. The proclivity to control is not a preference, desire, or whim. It is a need, deep-seated and all-pervasive in their lives.
Faith is an encompassing belief that people in general, and institutions specifically, have innate behaviors that are both unalterable and fairly predictable. Faith accepts these behaviors and, unlike control, it designs the world to appeal to the best behaviors. Faithful people also understand that these designs are not ever perfect.
Faithful people believe the world is too large and complex to completely understand. Because they believe this, they rely on historical knowledge and proven policies. They also use that knowledge, along with their belief about people and institutions, to create policies that leverage advantageous behaviors. The faithful believe that policy should not interfere with individual will, but rather incent people’s achievement. Any policy that alters or wedges between the incentive and the individual is deemed harmful.
Controlling people believe the world can be changed by mandating behavior. They believe people’s behavior is not innate but malleable. Controllers want to control the future by ignoring the past. They believe people and institutions are multilateral and therefore the right policy will elicit the optimum response. Hidden in this belief is deep distrust of people and institutions.
It is easily seen when people of faith and controlling people get together to make government policy, they do not understand each other’s positions. Faithful people view controllers as meddlers and equivocators. Controlling people view the faithful as rigid thinkers and do-nothing Neanderthals. Neither view is correct.
Controllers say their policies will produce great benefit for all. They say they are leveling the playing field so everyone becomes happy. To do this they must reduce the benefit and reward which high-achievers enjoy. They believe high-achievers have too much and obviously must share their earned results. Controllers do this by mandate, and do not trust high-achievers to be charitable. This creates a disincentive to high-achievers and plunges them in to hopelessness. The recipients of mandated redistribution should then be secure and happy. They are not, nor will they ever be. Instead they are resentful and envious. They slink in to a world of victimhood and despair.
The faithful believe their policies will open possibility for nearly everyone. They do not manipulate outcomes, but rather clear roadblocks to people’s success. Faithful people do not take earned rewards from achievers, they encourage more achievement. The faithful know individuals achieve through the earned advancement of all people. Faithful people know, when allowed almost limitless opportunity, the incentive to be charitable is great. And because faithful people believe in innate behaviors, they trust people and institutions to behave according to time-proven principles.
The differences between controllers and the faithful is on full display today. The leaders of our nation, the controllers, are mandating behavior because they distrust us. These controlling leaders think we, the American people, are not innately fair, just, or charitable. They do not believe that successful people help other people by supplying jobs, providing capital for expansion, and championing charitable causes. And most insidious of all, these leaders are making policy that will ensure future controllers carry on their policies and keep the power to control.
The faithful people are not power mongers. They believe power is not for controlling, but for advancing other people’s lives. The faithful are not overtly activist, they believe in honest and fruitful interaction among people. But the faithful are becoming restless. The numbers of faithful are more than the controllers. Their faith in people and institutions has been shaken and they are pensive. When the faithful rise up, they will resist, then remove by vote, the controllers. I have faith they will succeed.
Permalink
07.08.09
Posted in government at 4:36 pm by Administrator
An informal online poll was taken recently by the Arizona Republic which asked whether America’s best days were ahead or behind her. The answer was astonishing. Sixty-two percent of respondents thought the United States would never match her achievements of the past century.
In my neighborhood, the very low number of houses displaying our American flag on our day of independence also disturbed me very much. I’m certain there is no shortage of flags available for sale, and most people have stayed home this holiday, so the answer must lie elsewhere.
As a nation we are losing hope. With lost hope follows waning pride. We are told by our leaders that great sacrifices must be made, that scarcity is going to be the norm, and that opportunities are few. These leaders say the solution is collective cutbacks and government imposed redistribution of the wealth of our labor.
We have been told that our current economic problems are due to greed, or Americans living beyond their means, and even that the free market system itself is to blame. In short, they say the American citizens are to blame. Then, before we can catch our breath, these leaders use or inflate crises to dupe us into believing the solutions are theirs alone to select. And their solutions are in direct conflict with the foundations of our great republic.
These leaders’ notion of hope and change is to have us trust them, the people in charge. I could not disagree more. Our trust should be in the principles and values that built this unique and magnificent nation. No man or woman can approach the purity of those principles and values. Instead, we are mired in negativity and hopelessness brought on and used by these leaders who would rather see you beholden to the government and financially responsible to the masses.
Are these leaders intrinsically negative thinkers? I think not. They are the self-crowned elite – the supposed best of the best. Their argument subtlety states that we are not educated, sophisticated, or progressive enough to make our own decisions. It says a small band of elite can better govern us than we can govern ourselves. The falsehood in their argument is best said by Ronald Reagan, “If no one among us is capable of governing himself, then who among us has the capacity to govern someone else?”.
Through acts of hurried legislation and political gerrymandering, they are spending our money while figuratively patting us on the head, as if to say, “It’s alright, you wouldn’t understand and we know better anyway”. These leaders would make you believe they are the only conscience of our nation and that they have everyone’s interests at heart.
I categorically reject the idea that we are a nation in decline and scarcity and sacrifice are inevitable. I scoff at the inference the American citizen is to blame. And I could not disagree more that we are incapable of governing ourselves completely. If blame is to be laid down, it should start at the feet of those government leaders who disdain the abilities of individuals to look out for themselves, to be charitable to fellow citizens, and to act in the best interests of all. Those leaders who believe the contrary have abrogated leadership and demoralized a nation.
We are unique – our form of government, our free market economic system, and most of all our trust and belief in the values of reward for work, laws for all, and humble gratitude for generosity. We demand many things of our government, and it can assist us greatly. But it can also harm and weaken us and our nation if led by those who do not believe in its people. Our form of government is not without faults. But the faults are exacerbated by leaders who use its power unwisely, and many times for their own selfish purposes.
Our government was established to serve the populace, not the other way around. We deserve better than what we have had the last several years, and especially these past few months. We should insist on a renewal of effective leadership – a leadership that promotes individual initiative, effort, and reward.
It is time we take back our government, with all its faults but also with its capacity to streamline nearly limitless individual accomplishment and reward. It is time we voice our displeasure with rampant spending, central control, and usurpation of the greatest document of law the world has ever seen. It is time to stop the interference in our lives and begin to see the fruits of our labor and charity. Our call to action should be no less than civil, persistent, and peaceful. Our mission should be to remove through democratic means the misguided or nefarious leaders who govern not for us, but for their own ends.
We are all Americans and are just as unique as our economic, governing, and legal systems. We hold the power to correct the downturns and problems facing us. We are the hope to stop the false-premised path we are on. We have within our grasp the horn of plenty if given a chance to succeed. The only thing we need from our leaders to start down a new and prosperous path is the liberty that was promised and promulgated by our nation’s founders in the Declaration of Independence.
Permalink
02.05.09
Posted in General at 1:54 pm by Administrator
Not one study disputes the fact that only 45 percent of all start-up businesses survive five years. Over half of start-up small businesses fail in five years. Good odds huh? Less than one-third of start-ups make it to ten years. At any one time in this country, 13 percent of the population is in the process of starting a business. Poor saps.
Business Statistics
Author and educator Scott Shane wrote a very good book in early 2008 titled The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By. It is well researched and contains heavy evidence that back up my points. He debunks all of the myths about small business and start-ups. But, he pulls up short of saying what I am exhorting: do not even try.
According to author Shane, the typical small business is started by a man. He is White, in his 40’s, had some college but did not graduate. He has lived his whole life in the town where he started his business. He started a low-tech business and has worked in the industry. His business is structured as a sole proprietorship. Twenty-five thousand dollars of his savings went in to his start-up business. He also borrowed money. He just wants to earn a living and has no plans for growth, employees or wealth. Kind of depressing isn’t it?
But what’s wrong with this snapshot? Firstly, some of you reading this are saying, “That’s not me at all”. Well, it’s not me either.
Statistics and You
Although I am a White male, I have graduated college and earned a Masters in Business Administration. I started companies in my home town, but also started them in Mexico and outside the county where I live. My start-ups have been both low-tech and high-tech. None of them was a sole proprietorship, only corporations. I started my first company with less than $1,000 and my latest one with over $100,000. But yes, I borrowed money – too much money. My latest ten year plan included growth and employee expansion. I wanted to build wealth, not just earn a living.
Here’s the point: if you disagree with author Shane because you do not fit his “typical” entrepreneur definition, your logic is wrong. Wrong because “typical” is an amalgam of the demographics in statistics and studies. It does not follow that because you are different than the typical person who starts a business, you will succeed.
Different and the Same
Shane’s research states the typical start-up is out of business in five years. When I was a budding entrepreneur, I would have said, “that won’t happen to me”. I’m different, I’m smarter. I know how business works, or I know how to market…blah, blah, blah. You and I are not different than the statistics, we are the statistics!
Disconnected Logic
As many as 40 percent of the U.S. population will be self-employed for some time in their life, according to Shane. Illogical people will say it’s proof that entrepreneurship is alive and well in America. Yet only 13 percent of America are non-agricultural business owners. So if small business is so attractive that 40 percent try it, why aren’t there more small businesses in the U.S.? Why are only 13 percent currently business owners? That’s some kind of disconnect isn’t it? Wouldn’t you estimate that number to be higher in such fertile ground as America?
The 13 percent who are business owners is not a static group. The group changes out people every day. One day you’re part of the group, the next you’re not. This turnover is the statistical reason why the number of people owning a business is not anywhere near 40 percent of the population. The prime reason these percentages do not match is because businesses fail. Businesses Fail.
America’s Fallacy
The mainstream media and all of the “gurus” will tell you that our country is the greatest place in the world to start a business. Our population has the highest disposable income. Consumerism is king. We enjoy the greatest quality of life. Population growth ensures new customers. The Internet brings the civilized world to your doorstep. So succeeding in small business is easy. It’s like falling off a log. What a load of manure.
Shane proves that developed countries, like America, do not start a higher percentage of businesses than developing countries. And the disparity is huge. As a percentage of population, the highest rated developing countries produce four times more than the U.S.
The number of solid opportunities is not available anymore. It’s all been done before. And as a country becomes more wealthy, people’s economic choice gets easier. They can earn more by working for companies, not starting them. As developed economies move away from agriculture, to manufacturing and services, start-up opportunities dry up. The only industries where high growth and substantial wealth-building takes place are dominated by savvy investors and venture capitalists. Shane notes that less than one-tenth of one percent of start-ups are financed this way. Overall, about two percent of all small businesses are linked to professional investors.
If people who make their living by investing in companies only finance two percent, what does that tell us? Do you know more about small business than professional investors? If you said yes, you definitely need help.
The total number of new businesses in America has not grown since FDR took office. Taking out my Abacus, that’ nearly 80 years. There is no groundswell of entrepreneurial activity. There is a lot of self-financing, failure and heartache. There are many ruined lives.
False Confidence
The fallacies would-be entrepreneurs embrace give them false confidence. It’s GroupThink in a dispersed population. They may have confidence already. The fallacies merely bolster it. They cling to any illogical or unsubstantiated claim. They are riding an optimism bubble that will burst and throw them off the bumpy ride. Any scrap of “evidence” seen as beneficial they will use. I did the same thing.
Their confidence is false because the “facts” are a myth. If you start a business believing in false facts, Shane states the odds are against you. I can easily tell you your business will fail.
The Odds
What are the odds? If you travel to Las Vegas and gamble, they’re not very good. The best odds in Vegas are playing Craps. Or so I’m told because I don’t gamble. Or do I?
I have not gambled money on games of chance. I have gambled my money on a meaner game. It’s meaner because it takes longer to lose. When you lay money down on a table in Vegas, in a short time it will either grow or be swept away. Swept away is the usual occurrence. How else do you think they can build billion dollar hotels?
Small business odds are not much better than Vegas. After you have worked and made your mind into mush for seven years at your small business, only one-third will make it. No matter what measurement you use, the law of averages and statistics say you will not make it.
“But I will be part of the one-third that does make it” you will say. And you may try to convince yourself that your idea, methods, the market, your acumen, or any number of other reasons, will win out. You’re playing with fire.
The Odds, Your Life
You must seriously ask yourself this question: Am I willing to risk all that I have? Risk it on a less than 30 percent chance? That I will, at a minimum, merely make a living? If you say yes to these questions, ask yourself this one. Am I prepared to completely sacrifice my family’s future? And am I willing to put my marriage under stress, possibly to the point of divorce? Read on, it gets worse.
Policy and You
But small business is the economic engine of America, isn’t it? Small business provides the lion’s share of employment and wealth, doesn’t it? In the words of a movie character played by John Wayne – not hardly.
The facts according to author Shane are stark. The typical start-up is “not innovative, has no plans to grow, has one employee, and generates less than $100,000 in revenue”. And there’s more: “only 1 percent of people work in companies less than two years old, while 60 percent work in companies more than ten years old”.
In the all-too-often used words of business people, “What’s the takeaway?” Simply this: government and public policies are directed at these erroneous assumptions about small business. This incentivizes the wrong behaviors and expands the problem!
Permalink
01.29.09
Posted in General at 3:29 pm by Administrator
Everyone has a dream. We all have something that inspires us. Some of you dream of opening your own business. You may know someone who has a business and they look successful. You probably have read news stories that show entrepreneurs living the high life. Maybe your career is in the dumper and your boss should be a candidate for waterboarding.
The reason for this post and my upcoming book is to convince you to stop. Just stop. Start a new dream. Find a way to alter your dream. Beat your head against a wall until it goes away.
Of course I don’t mean that literally – you’d get a headache beating your head against a wall. And, you might hurt yourself. The figurative headache you would get is nothing compared to the lifetime headache you will have by opening your own business. Besides, waterboarding is illegal when used on U.S. citizens.
Headline News
News stories of successful entrepreneurs are everywhere. Daily we are bombarded with stories of people who have “made it”. The news snippets all have the same message: “It was so hard in the beginning, but we persevered”, or “With hard work and a good idea, anyone can build a successful business.” Balderdash.
Where are the stories of people who have sacrificed their money, family and friends to open and operate a small business? Those stories don’t sell newspapers or magazines do they? Those stories are downers. Those stories make people sing “Melancholy Baby”. Arcane reference, I know, but look it up. You can hum it while you read.
How To
Then there are the self-proclaimed consultants. They tell you, for a price, that you haven’t done the right things. They say you need to expand your sphere or knowledge. Or your attitude is wrong. You are to blame! If you would only take a step back, put time and money in to their plan, everything will be okay. Your business will take off. Pardon me, but that’s like the players paying the fans to watch the game. Meanwhile the fans fill out the lineup card. And the fans don’t have any “skin in the game”.
The Real World
I have been an entrepreneur, managed small businesses, and bought a franchise. I have a good friend who has started numerous businesses (ten at last count). All failed. Were we ill-educated? Did we fail to plan? Were our ideas out of touch with the market? No, no, and no. I am highly educated and my good friend even more so. We have twelve ways of looking at a situation and problem-solving skills that would be the pride of NASA. Given our past experiences though, we would not thrust (get it, thrust?) ourselves on NASA – they have enough problems.
Eats You Alive
The real world of small business is nothing like the headline news. And there is very little an author or consultant can do for you. Small business is long hours and disgruntled customers. Your day is filled with doing small tasks and little forward planning. It’s hoping the week’s sales will be enough to cover payroll. You pray every day that all of your employees show up – or you will have to do their job that day. These problems, and many more, are what you can expect by starting your own business. It eats you alive. And for little compensatory reward.
Millionaires
There are 10 million millionaires in the world according to Merrill Lynch & Co. and the Capgemini Group. One-third are in the U.S. That’s about 3.3 million people, out of 300 million. Remove children from the total and the percent of adults who have at least $1 million in assets is a little less than two percent.
Let’s put it another way: ninety-eight percent of us are not millionaires. And, we never will be.
Becoming wealthy is only one of the motives of small business dreamers. It is a myth.
“Bird in the hand”
You all know this trite little saying, “A bird in the hand is worth two in the bush”. Most trite sayings are simple. Simple sayings usually are powerful because they cut to the heart of the matter. The “bird in the hand” saying means be happy with what you have.
Another motive for trying to start a small business is dissatisfaction with your current career. Get over it. Change the way you view your circumstances and position. Look in the mirror and be honest. Are you really doing everything you can do to make the situation better? Or are you placing blame elsewhere, making yourself a victim?
Optimism Breeds Failure
Every entrepreneur and every wannabe small business owner I have ever met is overly optimistic. The warning signs that would normally stop them in their tracks are ignored. Even after running their businesses for a while, they fail to wake up and smell the coffee. They “see the world through rose-colored glasses”. That’s another trite or overused saying. But oh, so true.
Studies of entrepreneurs show most of us have high levels of confidence. Wonderful. In small business, most problems blindside you – you never see them coming. But you have confidence, and you’re overly optimistic. So you plow ahead.
Now let’s suppose that you are not in a small business, but instead are on the roof with Neo Anderson played by actor Keanu Reeves in The Matrix (the first one). You are told you can make the jump to the next building across the street. Your confidence is high and your optimism is gushing. You jump and plummet 40 stories to the asphalt street, just like Neo.
But would you jump? In real life, would you? That’s a dumb question and you’ll find that I lead the world in dumb questions. The threat of major bodily harm or death would make you turn around, put your hand over your heart, and thank your God for stopping you.
Can’t Fight the Odds
Studies have shown that four percent of the U.S. population achieve excellence. Four percent. Candidly, I think that the nation’s culture and its government have reduced that percentage by one-half. Are you one of the four percent? If you hesitated to answer that question, you need help.
Most of us are in the other part of the excellence ledger. We will not achieve excellence, nor will we ever come close. Does this make us bad people? Does it make us failures? Of course not! But if you think you are part of the four percent, you may be delusional just like I was.
My Purpose
Why am I being so negative? I don’t want you to fall in to the same trap I did. I want you to drop any idea of starting a small business. Don’t buy an existing one. Don’t go the franchise route. There are too many ways to screw up your life if you do.
I don’t want anything from you. I am not selling a better mousetrap. This post and my upcoming book are not the preamble to my 10-step program for life fulfillment. No operators are standing by.
In fact, this book should be the last one you buy on small business. If you want to spend money, go back to school. If you feel the need to improve yourself and your family, spend more quality time with them and stop making the television your babysitter. Don’t waste your precious time and money on the pipe-dream called small business.
Permalink
