I don’t advise someone how to schmooze their way up a corporate ladder, so why tell an entrepreneur how he should “stay alive?” Kudos for challenging the conventional wisdom of entrepreneurship, but the one-track thinking voiced here is short-sighted.

I hope I don’t sound that way . . .

I just saddens me at times to see certain “this is how it is” lines of thinking when it comes to entrepreneurship. Do I know all situations people are in? Certainly not.

On the other hand, and I agree with you, I think some folks don’t know how to appropriately manage reality (get rich quick, etc…). Success is not hard as

But to respond directly to the sentence “the lie that flexibility and learning are okay substitutes for lack of profit in a business” I think it’s one thing to say that in retrospect when you’ve done the best you could to make your business profitable, and another thing to say it looking forward to the next year. Someone who can’t get anything positive out of financial failure isn’t going to last long as an entrepreneur, and of course they won’t last long if they don’t learn to stop failing either, but often failure is the catalyst of success or the path to it. Edison tried 10,000 ways to create the light bulb before it worked.

Personally I think the bigger problem in Utah is that there are too many people who think that building successful companies is easier than it is (after all, if I’m righteous I’ll be blessed financially, right?), which I believe contributes to the success of get rich quick schemes, real estate investing seminars, MLM, and bankruptcy lawyers.

I agree with you that the bottom line is about making money. That’s the core goal. The other benefits of entrepreneurship are only peripheral, but not core. But, the core metric of *any* business is economic profit: [(revenue - costs) = (profit) ].

If there is a need in the marketplace for your service or product and the plan is executed well, then revenue will come and profit will eventually be realized. That’s basic and common sense, but not common practice.

A firm can realize economic profits sooner rather than later. But, for some people that run or have founded firms, it takes them longer because they are learning as they go. The fact is that a lot of entrepreneurs are big idea people, but are not that great at execution and, it is at the execution that determines whether a firm will survive or not. For some founders, it takes time to realize economic profits; for others, they realize economic profits sooner.

By the way, I just moved to Utah 11 months ago, so if you’re bucketizing me in that group, please don’t.

This magnifies my point. I think too many people tell themselves the lie that they have to be old to be successful. They also tell themselves it just takes time, but it isn’t just time. They also tell themselves the lie that flexibility and learning are okay substitutes for lack of profit in a business. If you believe that now, why will you believe anything different later? Flexibility and learning are there to help you get better at creating profit. Too many entrepreneurs (especially in Utah) think about it backwards. I’d never hire someone if their mindset was “someday” we’ll focus on profitability.

What does it say about a person and his or her willingness to change and adapt if it takes them 30 years to figure out how to be successful or they have a “someday” mentality.

Good question. I imagine that Maslow’s Hierarchy of Needs might be relevant here. Maslow argued that all sentient being need the following, in order of importance:

(1) Physiological
(2) Safety
(3) Belonging
(4) Esteem
(5) Self-Actualization

I think the “wam and fuzzy” feelings to allude to might fall in the camp of (3), (4), and (5). But, if the presence of (3), (4), and (5) presupposes that steps (1) and (2) have been satisfied.

Suppose that a sentient being has satisfied (1) - (4) through their entrepreneurship endeavours; furthermore, this person is working on (5). Then, later, this person finds (1) to be lacking later. In other words, while an entrepreneur might be happy with their autonomy, flexibility, and freedom, the lack of cold, hard cash that allows them the comforts of life will eventually hold a higher position. That person will be forced to eventually question whether or not entrepreneurship is worth it, if it doesn’t pay.

I imagine that there is an inflection point, such that the returns from non-sufficiently-paying entrepreneurship is outweighed by the bare facts that the long hours, little or no pay, and herculean efforts just might not be worth it.

One more thing: the 4 persons I discuss above were all over 50 years old and were lifetime entrepreneurs. Maybe the argument is that intially entrepreneurship doesn’t pay, but it eventually will. Some things just take time.

@Josh — 1/2 Million in the topline is excellent; that is nothing trivial and you ought to be very, very proud of that. Nice work.

So what is the difference? What’s so great about being an entrepreneur if you never make a dime? The glory of saying “I’m an entrepreneur?”

I have my own (profitable) investment company, and I work for someone else, but I still have flexibility, autonomy, etc…

So again I ask … What’s so great about being an entrepreneur if you don’t make a dime and still experience much of the same thing? If “most don’t” make money, what does this mean about most entrepreneurs?

When do the warm fuzzy feelings stop being enough? Want to read a great piece about money? This is the one: http://www.capmag.com/article.asp?ID=1826 (Francisco’s Money Speech) from Atlas Shrugged.

One owns Veracity Communications and several Hospice Facilities; the other owns a very successful pesticide company; the other owns a cabinetry mill; and the other owns a home automation company. These men are wealthy, free, and I remain envious of them.

One interesting thing about all of them: non took outside money; non take a salary, but they all reap huge dividend payments quarterly. Two of them are humble, but live in enourmous homes; one drives a Porshe; the other drives a Ferrari.

Some entrepreneurs make money; I’d say that most don’t.

Steve Hansen