Are you gambling when starting a business? How much luck do you need?

Are you gambling when starting a business?

Yes, especially if it’s the first time when you’re starting that type of business. There’s a simple truth, put out in genial form by Donald Rumsfeld, ex US politician (for example secretary of defense) and businessman:

There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.

The unknown unknowns, the things we don’t even know that we don’t know, are what’s killing a lot of businesses. According to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months. A whopping 80% crash and burn. A big part in achieving success is getting lucky by not having those unknown unknowns hurt us too much along the way.

 

How much luck do you need?

The more you are a novice in the type of business that you’ve chosen, the more luck you will need. The reverse is also true. When you’re extremely familiar with a certain type of business, you’ll probably be able to have a successful entrepreneurships within that field without caring to much about luck. You’ll end up successful because you knew exactly what you were doing and you didn’t leave much to chance. That means that if, for example, you’re starting a business making donuts and you go bankrupt, the next best business idea for you might be… making donuts… again. But this time better. If you’re starting an online store and it fails… just go ahead and start a second one, using what you’ve learned as an advantage. Here’s what you should do before and after starting a business as a novice: find other entrepreneurs that have done the same thing and simply… talk to them. Buy them a pizza, a beer… and just talk to them. As much as possible. You’ll be amazed of  how much you can find out. This has been essential advice for me and other business people that I know. For example a few months ago I decided to start a business where Amazon would handle the delivery of my product. I found this comprehensive post about how to sell on Amazon and most of the people would have said: “I have enough. Let’s do this!”. The post seemed indeed to have everything. What I did though after reading was to contact the author and simply talk to him. We talked about him, about me, about his businesses, about my businesses, then we’ve went more and more into my Amazon business plans and ideas. In the end, I actually dropped the plans because we found a better channel for my product. How much time has this saved me? Months of walking on the dread road to failure.

 

In closing, I’d like to give a bit more unrelated advice that reduces luck:

  • be an optimist;
  • be open to possibilities;
  • shoot for the moon with your success projections.

“Shoot for the moon. Even if you miss, you’ll land among the stars.”

– Norman Vincent Peale

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