Entrepreneurs launch nearly 627,000 new businesses in the U.S. every year, according to the Small Business Administration (SBA), but nearly 30 percent of those fail within the first two years — and nearly 70 percent by year 10.
What makes some businesses succeed while others fall victim to those somewhat unsettling statistics?
According to Rand Fishkin, founder of SparkToro and co-founder of the software company Moz, would-be entrepreneurs who are realistic about the not-so-glamorous side of starting a business could be more likely to experience profitable long-term success. By accepting (and even embracing) these realities, people considering a new venture will be far more prepared to solve the challenges that almost certainly will come.
In his book, “Lost and Founder: A Painfully Honest Field Guide to the Startup World,” Fishkin reveals the ugly, frustrating, confusing and thankless aspects involved in getting a business off the ground. He also frequently provides a contrary view of traditional “words of wisdom” so broadly shared by other business writers.
His insights come as a result of Fishkin’s own journey, which started rather inauspiciously when he dropped out of college in 2000 to help his mother run a marketing company and continues today as the head of an audience intelligence software company.
Some parts of that journey have been quite fruitful. Over his 17 years as CEO, Fishkin grew Moz (the leading search engine optimization software company) from revenues of $800,000 to more than $47 million. During that time, he raised two rounds of funding, led three acquisitions and, in 2013, re-branded the company.
But his impressive successes were tempered by some breathtaking failures along the way. The rollercoaster ride he’s taken and all that it taught him makes his book part practical business guidebook, part “cheat code” to running a successful business and part trailblazing adventure tale.
A new look at old advice
Fishkin puts a painfully refreshing spin on building a business, providing views that are contrary to much of the advice that’s shared in today’s (and yesterday’s) business books, with the goal of helping readers avoid the pitfalls and booby traps that litter the entrepreneur’s landscape.
As an example, conventional wisdom says when developing their core teams, company leaders should compensate for their own weaknesses by hiring people who add strength in those areas. But that isn’t always the best approach, says Fishkin. He counters that it’s not as simple as just filling a weak spot:
• If you don’t have expertise in a specific area — say, money management — you probably don’t have connections to people who do, nor will you be fully aware of the qualities needed for the role. (You might not even see that you have weaknesses!)
• The effects of your weaknesses may have impacted some important foundational aspects of the company, like its mission and values. Those need to get fixed before you can make real progress in other areas.
• If you bring someone in with the strengths you don’t have, you face a dangerous void when that person leaves.
Business owners who read “Lost and Founder” will probably wish they’d had it back when they were drawing up their business plans on the backs of cocktail napkins. It could have saved them a lot of work, embarrassment, humiliation, money and time. For some, it might just have saved their business.
Fishkin will deliver a presentation on “How to get everything you’ve ever wanted with just a message” on June 4 at Experience Inbound, a sales and marketing conference, at Lambeau Field Atrium in Green Bay.
About Experience Inbound
Experience Inbound is a full-day conference for marketing and sales professionals and business leaders to learn how to grow and elevate B2B businesses and build brands through actionable tactics and business strategy, presented by national and local industry thought leaders. Hosted by two platinum-level HubSpot partner agencies, Weidert Group and Stream Creative. For more info, visit experienceinbound.com
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Insight Publications, LLC.