The latest figures from the U.S. Bureau of Labor Statistics reveal that most businesses fail within a decade. Nearly half, or 49.4%, fail within five years of launch.
“That’s a much better survival rate than the frequently cited myth that half of businesses fail in their first year,” the Commerce Institute says. However, that’s cold comfort to the approximately one in five businesses that do close within a year.
Long-run business survival rates depend on factors like industry, business model, funding and much more. One of the most important of these is the founder or founders: their skills, expertise, network and perhaps most crucial of all, how much they care about what they’re building.
That might come as a surprise to passionate entrepreneurs. If you’re going to take the immense risk of launching your own business, shouldn’t it be a given that you’re all-in?
You should, but that’s not always how it works out. Some entrepreneurs see what they do as a gateway to financial independence, social status or some other non-business objective. They see what they’re building as a means to an end, rather than the end in and of itself.
Then again, many entrepreneurs take a “passion-first” approach. Here’s what worked for them as they built their dreams.
1. Find an Opportunity Few Others Know About Yet
The serial successes of entrepreneurs like Sky Dayton illuminate the possibilities of this approach.
In the early 1990s, Dayton was one of the very first entrepreneurs to understand the world-changing potential of the nascent Internet. At the time, the Internet was used predominantly by academic institutions and government agencies. It was incredibly difficult for the average person to “log on”; Dayton has said the idea for his first startup, EarthLink, came to him after dozens of frustrating hours trying to make a DIY dial-up connection work.
The rest is history, as they say. Incidentally, Dayton didn’t stop looking for opportunities others might miss: He’d go on to found a wireless hotspot provider in the late 1990s and a mobile phone platform in the heady pre-iPhone days.
2. Solve a Problem That Actually Bothers You
Passion is much easier to find when you’re solving for a pain point in your own life. Some of the world’s most successful entrepreneurs, including Dayton, have done well by doing just that.
If a quick survey of your personal pain points reveals nothing you think worthy of a high-growth startup, don’t despair. Instead, poll others around you to see what, if anything, you might be missing. Your willingness and ability to take on their challenges could win you a lot of fans and set the stage for the next phase of your career.
3. Surround Yourself With People Who Share Your Passion
Maybe you’ll hire the person who gave you the idea for your business — or maybe they won’t want to take a chance on you. Either way, it’s important to surround yourself with people who feel just as strongly (or more so) about the challenge you hope to solve. Passion, after all, is infectious.
4. Avoid Groupthink or Consensus for Its Own Sake
A prime example of the dangers of groupthink in business occurred in the fast-changing mobile phone industry of the mid-2000s, when the European Business Review notes then-dominant player Blackberry underrated the threat posed by upstart Apple.
“BlackBerry, a market leader in 2005 with sales topping $1 billion, failed to respond adequately to the launch of the iPhone by Apple in 2007,” they say. “The company was so confident in its product that it failed to spot emerging trends and technologies.”
Needless to say, BlackBerry is not a relevant player in the mobile phone market anymore. It’s barely even a meme. To avoid its fate — and avoid trashing your passion project — by staying on top of changes in the market.
5. Keep the Focus on the Customer
Finally, don’t lose sight of who you’re doing this all for: the customer. Every big decision you make should be taken with them in mind. That’s the way to inspire lasting loyalty and create a sustainable, scalable business out of a great idea.
Find Your Passion and Run With It
Passionate people do better work, and they have a better time doing it too.
That’s the verdict from Tim Cook, CEO of Apple.
“You will work harder than you ever thought possible, but the tools will feel light in your hands” if you’re passionate about what you do, Cook said a few years back.
The beauty of this idea is its universality. Everyone can find something they’re passionate about, no matter their skills or seniority level. It’s true for bushy-tailed college grads, C-level executives and entrepreneurs alike.
Maybe especially entrepreneurs, who work harder than anyone else to reach their goals.
