16th
The Sure Thing
Malcom Gladwell has an interesting article in this week’s New Yorker. Unfortunately it is unavailable online, which is probably why nobody is talking about it. Here is a quote I feel is relevant to Indie software developers, and people who want to stop working for The Man:
The economist Scott Shane, in his book “The Illusions of Entrepreneurship,” makes a similar argument … New-business success is clearly correlated with the size of initial capitalization. But failed entrepreneurs tend to be wildly undercapitalized. The data show that organizing as a corporation is best. But failed entrepreneurs tend to organize as sole proprietorships. Writing a business plan is a must; failed entrepreneurs rarely take that step. Taking over an existing business is always the best bet; failed entrepreneurs prefer to start from scratch. Ninety per cent of the fastest-growing companies in the country sell to other businesses; failed entrepreneurs usually try selling to consumers, and, rather than serving customers that other businesses have missed, they chase the same people as their competitors do. The list goes on: they underemphasize marketing; they don’t understand the importance of financial controls. They try to compete on price. Shane concedes that some of these risks are unavoidable: would-be entrepreneurs take them because they have no choice. But a good many of these risks reflect a lack of preparation or foresight.
Malcolm Gladwell, Annals of Business, “The Sure Thing,” The New Yorker, January 18, 2010, p. 24
I thought of Daniel Jalkut buying MarsEdit from Brent Simmons, an experiment recently repeated when Fraser Spreirs bought Changes from Ian Baird. These two seem to be on the road to becoming successful entrepreneurs.
Scott Shane was a guest on Guy Kawasaki’s Blog last year. You can read a short interview with Scott from Business Week or read his book. And you can read more by Malcom Gladwell online.
