Yes folks, going into business is like “swimming upstream’… or “going into war”. It’s a hell of a lot of struggle and the outcome is very much uncertain. No, it’s not just uncertain; it’s much more likely that you fail rather than succeed.
I hate to say this, but it’s true. I’m not kidding. It’s not my word; it’s the word of experts in the field. The experts said it, and the statistics say so.
But first, the credits or the introductory part. This post marks the first time we jab into the business side of investment literacy. And here, we try to make this first jab sound a little explosive. Let us see if we can borrow a bit of a small flicker of the recent Donaire- Montiel boxing bout.
To set things straight, let us go first to the statistics. “Of every ten start-up companies, one half will disappear within the first five years, only four will survive into the tenth year and only three into their fifteenth year.”
These statistics, as quoted by MIT Professor Peter Senge in his bestselling book, “The Fifth Discipline” (New York: Doubleday, 1994), simply indicate a survival rate of only 30% over a 15-year period for start-up companies in the US.
The USA is certainly one of the most business-friendly nations on earth – where a sizeable number of immigrants made it big.
In the Philippines, the figures are a much grimmer. Casualty rate is 95% in the first year, 4% fail after 3 years and only 1% survive after 5 years. This is according to figures from the Filipino-Cebuano Business Club (FILCEB), Inc., a pioneering entrepreneurship organization of micro, small and medium enterprises (MSMEs) in the Visayas.
Well, no wonder the survival metaphors abound. Going into business is very much like “swimming up-stream” or “walking a tightrope”. If that is true then would-be businessmen better train like hell…the way daredevils and stuntmen do.
A well-known venture capitalist Michael Moritz, a partner of the venture capital firm Sequoia Fund that helped jumpstart Apple Computer, Cisco Systems and Yahoo, once described starting a business as “taking a journey against all odds”.
Or “going into war”. A friend named Jun Bantungan of PICPA Riyadh said it during a business seminar and I guess he must have picked it up elsewhere. But the metaphor surely makes a lot of sense. One not only just has to be fully armed and equipped, he also has to be fully trained for battle and prepare for survival in a brutal environment in which only the most prepared make it.
Business literature is full of such war metaphors. “Lead from the front, not the rear”, “Ready, aim, fire”, “Go for the kill”, and so on.
In fact, competitive strategy in business has a lot in common with competitive strategy in war. Hence, the monstrous popularity in business circles of such war classics as Sun Tzu’s “Art of War” or Miyamoto Musashi’s “Book of Five Rings”. And hence, business writers and gurus seem to be continually scouring tomes of war literature to squeeze every drop of strategy lesson they can write about and apply to business.
And so, what then do we, hungry would-be businessmen, do?
Well, prepare for war. Read everything you can lay your hands on about business. Attend every seminar. Join business groups offering seminars or any group that aims to educate members about business.
If you are an OFW, attend seminars at the embassy in your work site. If you are an aspiring entrepreneur in the country, attend seminars offered by the Dept. of Trade and Industry. Or join small business clubs/groupings like the Filipino-Cebuano Business Club (FILCEB), mentioned above.
Then and only then can you have a fighting chance. Not a guarantee of success, but just an assurance that you got a fighting chance.
And having a fighting chance should be consolation enough… considering that you are “swimming upstream”, “walking a tightrope,” “taking a journey against all odds” or “ going into war”.