Entrepreneurial Success Arises from Opportunity

As an entrepreneur myself, as the director of a business incubator, and as a new-venture advisor, I have had the pleasure of teaching entrepreneurs how to access their invisible capital and create opportunity.

Have the people I worked with achieved the American Dream? Have they been able to build companies with hundreds of employees, leaving themselves the leisure to cruise around the world? No. That’s because, for 99 percent of entrepreneurs, the American Dream never comes true. It’s more likely, in fact, that the American Dream has actually prevented many people from going into business because it sets the bar so intolerably high.

Millions of Americans dream about going into business, but most Americans, like Carlos, don’t start up their enterprises. They don’t incorporate, don’t acquire a federal tax identification number, don’t start generating income. They have an idea, they may even have enough invisible capital to develop that idea into an opportunity, but they can’t imagine that they will be able to achieve multimillionaire success. I believe in dreaming big, but believing that the only measure of success is becoming Donald Trump is going to be a barrier to your personal success.

Even business schools don’t use the Trump model of success. The traditional business school definition of business success is whether a company has revenue, makes a recurring profit, has a highly productive and growing workforce, and operates profitably long enough to satisfy its stockholders’ financial interest (read: maximize shareholder value). For most business schools, success equals viability. More to the point, if your company can make enough money to stay in business and return a profit in sustainable fashion, it’s a success.

Implicitly, our government’s standard for business success skews toward growth over profits because growth is often a proxy for economic prosperity and often correlates highly with low unemployment. In other words, growth equals job creation. And jobs equal happy politicians. So, by this lower standard, new ventures can be deemed successful simply by the fact that they exist and are at least a nominal representation of economic growth. If they hire one or two employees—be they full-time or part-time workers (with or without employee benefits)—it’s worthy of celebration.

Suppose you run a day care center that employs yourself and one child care worker, generates modest revenue, and lasts several years. Even if your venture has never made a profit, you’ve hit three of the four criteria used to measure narrowly defined success. If you run a small construction firm that employs five to ten part-time day laborers, brings in money, and makes a small profit, even if your company is just a year old and cash flow is tight, you are also well within the realm of “success.”

Support a payroll of just two people, and you’ve already beaten the odds—since only one out of four businesses have paid employees (including the “owner”). Employ twenty workers and you’ve made it into that rarefied top 3 percent of businesses with payrolls!

Every entrepreneur wants to beat the odds and create a viable business. But the American Dream tells us that viability isn’t enough—we also need to acquire wealth to be successful. The American Dream tells us that the odds we need to beat are not four to one (the number of businesses with employees), but four hundred to one (the number of businesses that create real wealth for their owners).

Are those the odds you want to book? Is that your idea of success? Any entrepreneur about to embark on what is going to be the hardest work they have ever done in their lives should first ask, How do I measure success? What does success mean for me?