I have a friend who was always trying to talk me into being part of his next business idea. Media, finance, health care—it didn’t matter which sector, he’d always say the same thing, “Jerry, it’s gonna be bigger than Microsoft .” I’d always nod and smile. Then I would change the subject back to the insurance firm that he already owned. How are your profits? Who’s your best producer? Are you controlling your costs? I knew that would end the conversation pretty quickly, because talking about the business that he already owned was boring to him. It shouldn’t have been; he’d built it from nothing and was beginning to break into the middle tier of his industry. He never made it, though; he’d siphon all his best people off to his whim of the month, left the running of his core business to one of his mediocre guys, and, in the end – bankruptcy. The problem, I think, was ingratitude.
I know a lot of guys like this: I have another friend who repeatedly tried to recruit a top manager who would be able to take over the business quickly so my friend could move on to other more exciting ventures. He’d hire some young hotshot and in a year or so, the hot shot would leave? “I don’t know why these guys keep leaving, Jerry.” He’d say to me. I told him it’s because he keeps trying to leave, leaving the available successors with the impression that this job wasn’t worth much. Then they’d jump ship. He finally figured out that he had a first class, highly successful company, and was thankful for it and got focused again. The company is doing great now, and he’s hiring far better performers than he’s ever had before.
Another guy I know founded a highly successful state-level news analysis television program, but that wasn’t enough for him. He wanted to start more of them. He imagined sticking pins in a map, until the map was filled with pins. The bone-head got overextended, ran out of money, and had to ask his wife and kids to help him turn the company around. In the end, he became grateful for what he had, and cared for it, and it grew. That last guy, by the way, is me.
Ingratitude, I’d say, is the most common reason for entrepreneurial failure. The studies say that businesses fail because they are undercapitalized, or because they don’t have enough cash flow to pay their debts. But behind those financial indicators, I see a character flaw: an undercapitalized business (if it’s a good business idea) is just a pre-capitalized business. Somebody was unwilling to wait, work and save or sell shares while in their current job for long enough to create the new job.