The Three Entrepreneurial Points of Failure

February 01, 2016

The Three Entrepreneurial Points of Failure


In 2009 two academics, Parker and Van Praag showed how the status of entrepreneurship in your peer group had a massive influence on whether you would or would not choose entrepreneurship as your “career” choice. When entrepreneurship is seen as cool, and your friends exalt the entrepreneurial life, you are most likely going to dabble with being an entrepreneur, whether you are ready for the journey or not.

The problem is that despite all the media glamour surrounding the entrepreneurial life-choice, the failure rate of entrepreneurial endeavors remains unacceptably high. The irony is that according to Dun and Bradstreet ( a major international research firm), 90% of entrepreneurs that “fail” are not forced to close their businesses, they do so voluntarily. The business simply does not produce the results that they believed it would, or should, and the pain of pushing through is just too much.

In my view there are three broad areas that need to be focused on in order to reduce the amount of failure in the entrepreneurial ecosystem. (PS, I don’t necessarily think all failure is bad). My personal mission is to fundamentally change the survival rate of entrepreneurial businesses over a 10 year period. 96% of businesses are purported to fail this timeline, can you imagine the impact on our economies, on unemployment, on poverty if this number was reduced to 50%?

  1. Entrepreneurship Journey Readiness

The first area is entrepreneurship journey readiness. In a previous blog I have touched on one element of this area, the 5 conditions that need to be present in order for a nascent entrepreneur (as defined by the GEM report) to precipitate into a “trading” entrepreneur. Too many so-called entrepreneurs start this journey without the right “gear”. Over time we will discuss what some of this “gear” might include. The fighter pilot does not get into the cockpit without a G-Suit or doing a safety check. I believe entrepreneurs need the right level of confidence, healthy fear, self-awareness, naivety, and a compelling economic right to exist before starting the journey. Being “ready” for your journey has a large influence on your survival rate, and I will endeavor to discuss some of my thoughts on what being “ready” could look like.

    2.  Entrepreneurship Journey Skills

These are some of the skills required to survive the journey. They include financial skills, interpersonal skills, negotiation skills, sales skills, marketing skills, strategic skills, etc. They are the tools required to survive the wilderness. And as the journey goes on, so does the landscape and thus the requisite tools to survive in the new surroundings. There are many guru’s out there who know more about these subjects than do I. My focus will be on discussing some of the less spoken about tools, and to test the real life validity of some of the academic models we try so hard to emulate, but with little or no success.

    3.  Entrepreneurship Journey Motivation

This is about staying the course and not giving up on the way. The highs and lows of the journey take their toll on your mental state. The discipline of self motivation, the daily rituals, the tools to remove yourself from a self-doubt funk, are all necessary for you to survive your journey, no matter how far along the path you are. I will try my best not to make this a Rah Rah element of the blog, but rather discuss some practical ways I have seen some of the more successful entrepreneurs keep themselves motivated and upbeat.

A Re-Commitment to your Journey

In 2005 I wrote a simple Entrepreneurial Oath, which I later published in “Lose the Business Plan“. The Oath is framed and hung on all Raizcorp   reception walls. Each of the tens of thousands of entrepreneurs who have come through our process receives a printed copy of the Entrepreneurial Oath which they have to sign on the day they begin their journey with us. This Oath serves as a reminder of why we do this, a pre-conditioning of our expectations for the journey, a reminder that we share similar trials and tribulations, and that the feelings we have on this path are normal.

The Entrepreneurial Oath

I have undertaken a journey of growth and pain. I understand that there will be many dark days where I will want to throw in the towel, but won’t. I know that, for what might seem the longest time, I will dread month-end. I am comfortable with being pressured by my family and friends to get a real job. I am prepared to lie awake , for many nights, planning my way out of perceived imminent failure. I am ready to be told by my potential clients that I am too expensive or too inexperienced. I anticipate falling so many times that I will ache as I stand up again. 

For I know that it will all be worth it in the end as I extinguish the words of my naysayers and the loudest of them all – the one that lives in my head. 

For I am an entrepreneur; I have chosen this life above immediate comfort as I strive to create wealth and to make a difference in the world around me. 

Final Thoughts

The thoughts I will share in this blog are not from the vantage point of an “Entrepreneurial Guru”, there are enough of those out there. My thoughts are from the combination of  the experiences from my own journey as an entrepreneur, as well as the thousands of vicarious experiences I have been exposed to throughout the past 20 years or more, working with entrepreneurs from all walks of life, and from all points on their journeys.

I will be asking many questions, debating many “myths” I find hard to swallow, and providing some constructs and points of view you might find interesting.


By Allon Raiz (CEO at Raizcorp)

Allon Raiz

Follow Allon Raiz on Twitter –  @allonraiz