Sheltowee Outpost

Entrepreneurs Fail- Even in the Fly Over Country

Entrepreneurs Fail- Even in the Fly Over Country

Aug 11 2014

I really prided myself as an entrepreneur.  I had started a company.  I had kept it going.  Made a decent living.  I had not set the world on fire, but hey, I was still around.  And then it happened.  I got my big chance.  I started a company, raised money and had over a million dollars invested.  Sales were increasing.  But overhead was increasing faster.  The business model was almost working, we just needed more capital to build out infrastructure.  It was 2009 and capital sources had dried up.  Money could not be raised.  So I did what entrepreneurs do, I bet the farm on it.  In December of 2009 I secured a small round of financing with my family farm securing the note.  I put it all in.  And in early February of 2010… it was gone.  Sales had dried up.  The management team got spooked and were working on other projects… and I was completely tapped out.  I had put everything I had accrued into the business… and it failed.  As with many businesses it was not a quick failure.  It was a slow lingering death that was spread out over the next several months.  There was the humility of failure.  There were the friends who had invested and lost their money.  And there was the cleanup of the aftermath.  In all we had invested over a million dollars and it failed.  That was NOT supposed to happen.  It was supposed to be the fairy tale ending where you bet the farm and win.  I bet the farm and lost and was later forced to sell the farm that had been in my family for over 6 generations. 


I had read about the fact that entrepreneurs fail.  I had seen the statistics.  But like with most major negative events in life, all of that was for someone else.  Not for me.  But it did happen to me.  I had seen it happen to my entrepreneurial brethren, and always thought, "poor guy".  But now it had happened to me.  And this is where the true test of an entrepreneur comes in.  A test which I must admit, I did not pass with flying colors, but a test I hope was graded on a pass/fail basis.  Niall Harbison has a great article on depression and how it can impact entrepreneurs.

 

I have looked back over my past 20 years working with entrepreneurial companies and being an entrepreneur and I have identified a major element that is a challenge for those of us in the Fly Over Country.  And that is the risk averse nature of the investor community in the Fly Over Country.  I remember when I first started my business hearing people talk about those guys who had failed in hushed tones.  "They will never put money in him, he crashed his last deal".  Although this is not the advertised attitude of investors, it is the predominant undertone that is the reality of the conservative nature of much of the Fly Over Country.  This pushes us into the "flavor of the month" mode.  When someone fails, the community can't get behind them, because they have failed.  They had their shot.  They were the "flavor of the month".  They had their chance. 


One of the issues that exacerbates this in the Fly Over Country is that many of the "leaders" of the startup community are individuals who have never been an entrepreneur.  They are usually one of the following:

  1. Someone who works for a government backed agency (a bureaucrat)
  2. Someone who inherited their money
  3. Someone who made a lot of money in a big company

The other issue we have is that often times the successful entrepreneurs are too focused on being successful in their business, so they do not have the opportunity to interact with those who need their counsel the most. 


Because the "cheerleaders" for the entrepreneurial community are not entrepreneurs themselves (although they often fancy themselves entrepreneurs because they work with entrepreneurs), they have not walked the path themselves.  They don't understand the nature of being an entrepreneur.  So it is much easier to dispense with last month's flavor of the month and find a new flavor of the month.  It is much cleaner that way.  They don't have to deal with the messy cleanup and burying the body.  And since you only get one chance at Flavor of the Month, many of these entrepreneurs have to move to different areas since they had their chance in their hometown.  It is much easier for the cheerleaders to pick that new guy that doesn't have the "baggage" of a crashed deal.  They are bright eyed and bushy tailed and ready to promote their new concept with vigor and enthusiasm, and never have to explain that deal that crashed.  It is so much cleaner.

 

The issue that distinguishes entrepreneurial Mecca's like Silicon Valley is that they understand that the guy that was "flavor of the month" last year, probably learned a lot from that deal he crashed.  As a matter of a fact, he is probably a better investment opportunity now, than he was in that deal he crashed.  A good entrepreneurial community recycles their "flavors of the month" and supports them.  We in Fly Over Country need to learn these lessons.  We need to embrace that rare breed of people who set lofty goals  and more often than not, fall short.  Rather than driving them away, we need to encourage them and help them find the next deal where they can bring that valuable experience of failure. 

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