Don’t Think You Are An Innovator
Most millennials that I meet consider themselves entrepreneurs, or at least innovators. The editor of MiLLENNiAL Magazine, Britt Hysen, claims that 60% of millennials consider themselves entrepreneurs and 90% recognize entrepreneurship as a mentality. However, the truth shows that millennials are full of sh*t. The share of people under 30 who own a business has fallen by 65% since the 1980s and is now at a quarter-century low according to the Wall Street Journal.
In fact, the average age for a successful startup founder is about 40 years old according to the Kauffman Foundation, a think tank focused on education and entrepreneurship. This group cites your 40s as the peak age for business formation. There has only been one group with rising entrepreneurial activity in the last two decades, people between 55 and 65. So it’s not millennials, but the boomer-preneurs that are growing our country’s economy and monetizing innovation. And there’s a few reasons why this group is so successful…
Stay In the Game, Millennials
The reason why entrepreneurs are generally older is that they are better suited to the risk involved with starting a business. Nine out of ten startups fail, so those individuals that choose to create companies are generally better prepared and more experienced than a typical millennial. One survey given to failed startups showed that 42% of them believe that the lack of market need for their product was the biggest determinant for its failure. To be honest, this is something I do not agree with. I believe there are three key reasons why startup companies fail.
Three Reasons Why Companies Fail
The first reason for failure, regardless of whether you’re in your 30s, 40s, 50s, or 60s, is because entrepreneurs forget the number one rule of entrepreneurship, which is to stay in business. Every day, each of these entrepreneurs should think about how to take care of themselves in order to guarantee that they’re in business the next day.
Second, entrepreneurs don’t understand the difference between innovation and entrepreneurship. Innovation is the action or process of taking imagination and making it real, while entrepreneurship is the action of monetizing innovation. Great entrepreneurs don’t have to have a creative thought other than, “How do I monetize my ideas?” Or, “How do I monetize somebody else’s ideas?”
Finally, many entrepreneurs fail to diversify within their own business. If I had $20 million in a startup, I would have 10 separate business initiatives funded by $2 million each, knowing that if I could stay in business as a whole, one of these 10 businesses could evolve with a multiple of 50 times or more. So, at the minimum, my $20 million investment could have a return of over $100 million. And even if I was unsuccessful in nine businesses, everyone would consider me and my business highly successful, because I took my $20 million and turned it into $100 million.
Monetization Over Innovation
So, remember that there are three rules of entrepreneurship that we must have on top of situational knowledge in order to monetize innovation. Failing to make this distinction is why millennials may consider themselves entrepreneurs, but they’re only innovators, while the older generations truly have what it takes to monetize innovation. The older generations live in accountability, above blame, shame, and justification. They are the 10%, the one out of ten that succeed. Sufficient capital is just one of the necessary assets to stay in business every day. You must also know the difference between innovation and entrepreneurship, and finally, remember to diversify into different initiatives or business units so you can statistically be successful.
By: Dave Meltzer
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