Are We Addicted to Entrepreneurialism?

Though start-up success stories are widely known and lauded, most will never reach the height of success. For aspiring business leaders, could acquisition entrepreneurship represent a more viable route?

Ever since WeWork’s spectacular humbling last year, this question has cropped up repeatedly in entrepreneurial circles. It certainty hasn’t lost any of its poignancy since COVID-19’s emergence either – if anything, the discussion has become even more pointed. Perry M Anderson, CEO and Managing Director of Quadra Global Capital Corp assesses the failure rate of modern entrepreneurs and suggests how it may be addressed.

Entrepreneurialism manifests itself in many forms – from the scrappy tech startup founder continuously courting investors for larger and larger rounds, to savvy ‘acquisition entrepreneurs’ who scour markets for profitable businesses helmed by retiring owners looking to move on.

Addiction is a particularly strong word to use and, in some cases – i.e. Silicon Valley hustle startup culture – there is definitely an unhealthy obsession amongst the community, however it’s not so much addiction but rather misplaced passion. People are focusing on a route that’s destined to fail rather than clearer, lesser-walked paths.

Addictive Entrepreneurialism

Over the past decade, the world has seen an acute rise in startup entrepreneurialism. Never before has rebelling against the 9-5 attracted so many.

As John Steinbeck once said, “Ideas are like rabbits. You get a couple and learn how to handle them, and pretty soon you have a dozen.” This resembles the ever-increasing numbers of entrepreneurs trying to build their personal empires, and in nearly every case, the large number who fail because the model itself is broken.

Startup success rates are staggeringly low. 94% of startups inevitably fail, yet enough people clearly ignore the data to carry on, pushing through the doubt and ever hopeful the tides will turn in their favour. Expect that failure rate to rise higher through the 2020s against the backdrop of a sustained global recession. Egged on by aspirational success stories and hero worship, aspiring entrepreneurs are actively ignoring the risks and positive opportunities available to them in the form of other routes.

‘Acquisition entrepreneurship’ is a much more effective path to value, wealth creation and business success – buying credible, profit-making businesses from owners looking to unload their interests, retire or simply de-risk in this current climate. It remains a puzzlingly niche approach.

Mentorship Is the Answer

One of the chief reasons behind this arises from a notable lack of mentorship. There aren’t enough people endorsing acquisition entrepreneurship as a credible alternative to the supposed norm.

Entrepreneurs turn to their advisors to guide them forward and there needs to be a visible, vocal discourse on how entrepreneurism takes on many forms. Younger CEOs certainly have the raw expertise, thirst for knowledge and unrelenting drive to build something special, more often than not they are unaware they can purchase the countless established business out there at the moment.

In this current climate, baby boomers are implementing their succession plans en masse and searching for bright energetic individuals to take the reins. There are so many opportunities out there at the moment, entrepreneurs just need to look.

In this uncertain time, entrepreneurship and the risks of founding a company from nothing will become even more pronounced, there is no doubt about that, however if the community were to reallocate its collective energy, everyone would benefit.

Economic downturns often have the habit of resetting people’s expectations.

There are so many opportunities out there at the moment, entrepreneurs just need to look.

Startup culture as a concept is certainly overdue a crash and it’s very likely that the businesspeople that come out the other side will be those who have widened their horizons, channeled their energy though other entrepreneurial models and knuckled down.

Resetting Expectations

It’s an apt time for business icons to be taken off their pedestals, dispose of the exhaustive humblebrag daily routines that endorse waking up at 3am and working 18 hour days, and instead celebrate the many other types of entrepreneurship.

Plenty of business owners are looking to sell at the moment and these are businesses that can weather the storm. They might be a pipe manufacturer in the north of England or a company that survived crashes in the 1980s, 1990s and 2008. For some, purchasing these businesses aren’t as enticing as founding a company based on a novel idea, however they prove time and time again to be a better use of time, money and energy if the entrepreneur in question is guided carefully through the process.

Whilst no one can predict what will happen in our near future, it is an appropriate time to assess, reflect and evaluate on what bright entrepreneurs choose to do next.

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