How I was nearly rich
Every year I launch a start-up venture. They often fail. In fact, here are a couple of my favourite failures:
ArtPension would have given people a tax-efficient “cheque book” for buying things they love like fine art, wine and classic cars in their pension fund. It was great timing. People had fallen out of love with equities generally and pensions specifically following a series of market crashes and mis-selling scandals. I was launch-ready with regulatory approval, an operational platform and a marketing plan. Then the UK government changed the regulations, making the business impossible.
365 Memory sold the cheapest digital memory anywhere in the UK. We were the price leader for three reasons. Firstly, we had great supplier relationships in Taiwan. Secondly we were ferociously tax efficient. Being Jersey-based, the business didn’t need to charge VAT. Thirdly, we had very little money tied up in stock because of our drop-ship, factory direct model. Unfortunately we died because of failed Jersey-based logistics and dispersed management.
Failure goals and the “Dyson myth”
There’s a toxic myth about entrepreneurship. You could call it the “Dyson mythology”. It goes like this.
James Dyson, the inventor of the Dyson vacuum cleaner, gambled everything he had on his business. In five years, he produced 5,126 failed prototypes, mortgaged everything and was on the verge of bankruptcy. Salvation came with a chance contact from a small Japanese company. The resulting vacuum cleaner went on to sell more than £2 billion worldwide.
James Dyson is a hero. He fought hard, broke the rules, never gave up, risked everything and succeeded hugely. History is shaped by people like that. But the great are the enemy of the good. The problem is that people like James Dyson make it seem like all-or-nothing risk is what entrepreneurship is all about.
Learning to dream again… safely
I have a personal goal to lose 20% of what I earn every year until I fail to succeed at losing it. Having a failure goal, takes away the fear of not succeeding.
Research on entrepreneurship says that on average one in ten start-ups succeeds. So giving up on first failure isn’t a great way to do it. Oddly, that’s often the mistake that corporate innovators make too.
That specific 20% is important too. It means that I don’t bet the farm and can walk away from failures with my home, happiness and marriage intact.
Why every employee should be a spare-time entrepreneur
There are three reasons why every employee should be a spare-time entrepreneur. What’s more, enlightened companies should encourage it. Here’s why:
1. Learning to dream
Doing a start-up reminds you how to dream, imagine, create and invent. There is no company in the world that doesn’t value those qualities. But too often, process-centric corporate cultures don’t make it feel that way. Quite simply, being an entrepreneur makes you a better employee.
2. Better than an MBA
Start-ups teach you priceless lessons about how to get things done and about how to manage risk, plan and deliver. They give you the ultimate personal responsibility.
3. Better than a pension
Many people in employment are racing their first coronary to a subsistence retirement and a newspaper round at 80 years old. The risk-return arithmetic on start-ups is a lot better than on pensions ; so long as you don’t bet everything on a single throw.
In the blood?
Some people say that being an entrepreneur is in the blood. Possibly, I fall into that category since I set up my first (successful) organization when I was 19. But actually, I think it’s more likely to be a question of choice.
So this week, I’m really excited to have set up a new company…more on that soon.