Several months ago, there was a big Twitter event in Los Angeles that was live streamed. Since there were several speakers scheduled that I was eager to hear, I planned to check in throughout the day.

On the morning of the event, I woke up with a touch of flu so changed my plans and spent the day in bed with the Twitter conference streaming nearby on my laptop. The audience was enthusiastic and most of the speakers were too.

One of the speakers was a famous motivational speaker. I won’t name names, but I always think of him as a Too-Cool-For-the-Room kind of guy. The venue seemed a bit small for his broad performance which has been fine tuned in auditoriums with audiences in the thousands.

I don’t remember what the title of his talk was, but all of a sudden he bellowed, “Eighty percent of all businesses fail within the first two years.” Just in case his audience (full of self-employed folks) weren’t horrified enough, he repeated that shocking statement.

I sat up in bed. I may have hollered something back at him. I might have even called him a liar. (I was sick, remember?)

Where did he find that statistic? This was even crazier than most of the failure numbers that seem to be pulled from thin air.

Based largely on conventional, highly capitalized business failures, the statistics aren’t based on an accurate count that includes less conventional enterprises. Adding to the inaccuracy is the fact that if a business changes hands, the original owner may be lumped into the failed business category—even if the business was profitably sold.

What struck me as even more ridiculous in the claim that eighty percent of all businesses tanked  was something even more obvious: despite the closing of many businesses during the current recession, we’re not even close to that percentage. If we were, every mall and business park would be filled with rental trucks and moving vans.

That’s a sobering thought, but it’s not what’s happening.

Of course, we can listen to the statistics without questioning them and scare ourselves away from our dreams.

Or we can listen to successful entrepreneurs and see what they have to say.

People like Sir Richard Branson has a different take on things. “The world is a massively more hospitable place today for entrepreneurs than it was twenty or thirty years ago,” he says.

We also need to recognize that business in 2010 is transforming into something new. Consider this experience shared by the wonderful and visionary Paul Hawken:

When I started the natural food business in Boston, my business knowledge was scant. I did the best I could and began reading everything I could lay my hands on.

I subscribed to The Wall Street Journal. It confused me. I read the major business magazines. Their Fortune 500 world seemed irrelevant.

I sneaked into classes at the Harvard Business School. Their case studies were lunar in their usefulness to my enterprise.

The more I searched, the more confused I became. The more exposure I gained to the “official” world of business, the more I began to doubt that I was in business at all. I seemed to be doing something entirely different.

I get that same feeling today when I read most of the standard business literature.I believe that most people in new businesses, and some in not-so-new businesses, have the same problem. They don’t feel connected to the conventional wisdom…as if a small business is just a flake chipped off the larger corporate world.

Hawken and I have discovered the same thing: the Quiet Revolution that’s been growing for the past couple of decades is thriving in all sorts of ways, in all sorts of places.

And we’re going to continue growing—whether anyone is adding us to their statistics or not.

8 Responses to “Consider the Source”

  1. Della

    Am reminded of that old line: There’s lies, damn lies, and statistics…..

  2. Rasheed Hooda

    I was scanning the Continuing Education Catalog of the local Community College for Entrepreneurship classes, and all I found was how to write your business plan so you can submit it to the bank for funding, how to hire and fire people and the legal implications, Marketing for the business sounded like it would cost wayyyyy more than the $50 I started my business with that is earning me $30,000 per year.

    I think I’ll use your book as a text and propose a class to them.

  3. Barbara

    Go for it. You may, however, need to give it your own title. I’m pretty protective that way.

  4. Gillian

    Many thanks for the background info on what goes into those stats Barbara, that’s very interesting.

    I had a similar experience to Rasheed – a few years ago I took a night class in starting a business at one of the largest and most prestigious colleges in the country. I turned up with high hopes – this was, after all, an area with a reputation for incubating many successful start-ups – I was sure to pick up some great tips. Turned out I was the only person in the very large class who wasn’t going after funding and after the second class it all revolved around structuring you business plan to get the funding (that I didn’t want or need). Shame, I’m sure so much more could have been learnt from the lessons of successful start-ups.

  5. Mary

    Barbara, I used to be intimidated by these statistics, but I learned that 92% of all statistics are made up (and I took a class on them in college). Now, I realize that I can create my own statistic based on what I choose to do and how I do it.

    Thank you for your book. It’s amazing.

    Rasheed, I have had similar thoughts. If you do teach the class, try to get an online version – I’d take it. 🙂 Love your blog, by the way!

    My joyfully jobless journey (say that 3x fast) is only beginning. But I am determined to be free of the cubicle by Christmas. It will be my gift to myself.

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