The largest difference I’ve observed in all the companies that I work for on success versus failure is the ability for the entrepreneur or business to actually execute. It frustrates me to watch friends and fellow entrepreneurs not realize their success simply because they don’t execute. Fear and greed are the two things I see that stop entrepreneurs in their tracks.
Here are a couple of examples:
Entrepreneur A has a great product that’s working but undeveloped, unbranded and not ready for primetime. For 3 years now, he’s been spinning his wheels. He’s got prospects hot and then they cooled down. He’s had opportunities for talented partners, but he’s wasted their time and eventually turned them off. He’s micro-managing legal paperwork, marketing, and everything that has to do with the company because he thinks he can do it all. 3 years.
- Let’s say this company is going to be a $500k company in a year. To date, that means that they’ve lost over $1 million because of their inaction.
- Let’s say the company is valued at $5 million. The owner doesn’t want to give up significant shares of the company to those that can help him get it off the ground. He thinks if he gives up an additional 10% in ownership, that he’s giving $500k to the partner. Remember that $1 million in lost revenue? Because he didn’t give $500k to the partner, he’s now lost $1 million in revenue… with the majority of that money being his. That means that his stubbornness at negotiating a lower percentage is actually costing him money. Weird economics, I know.
- Of course, the actual percentages mean nothing until there’s revenue behind it. And as long as he can maintain majority ownership, he gets to keep the majority of the business’ value. 100% of a company making $100k a year is $100k. 51% of a company making $500k a year is over $250k per year. Who cares if your partner is going to pull in an additional 10%… if it’s growing your bottom line 250%?! You’re not sacrificing anything and your company is valued better and you’re making more money.
Entrepreneur A never gets his business off the ground. Or, if he does, it’s built with people that really don’t have anything invested in the company so it’s lackluster and doesn’t take off. 10 years from now, he’s still scratching his head on what went wrong – perhaps blaming the talent around him, not realizing it was his choice.
Entrepreneur B is scared. He’s got an okay product that has copyrights, trademarks, and patents. He’s spent a fortune on attorneys and spends his time scouring the Internet for those people who might be utilizing his trademark in violation. He won’t work with anyone for fear that they’ll steal his idea. He doesn’t trust anyone. And because all his money is tied up in legalities and his time is spent watching for people ‘borrowing’ his idea – his product never progresses.
Something better comes along and buries Entrepreneur B. He wonders what happened to this very day.
Successful entrepreneurs don’t let greed nor fear get in their way. They recognize their professional weaknesses and find talent to overcome those. They don’t care if every employee becomes a millionaire in addition to their wealth… in fact they relish the opportunity to create wealth for others. They also don’t waste time on the competition or the naysayers… they execute, execute, execute.