What fails 70% of the time, yet people continue to do?
7/10 Do not last five years.
An Economy Built on Failing Forward
While we do not need 70% to fail, we do need the constant creation of start-ups who strive to be the next Amazon.
Businesses created to chase that exponentially small chance employ the majority of Americans.
We already have monoliths like Amazon, Microsoft, or Apple. We do not need a copycat but, the process that created them is essential to the American economy.
Windows for Microsoft, online retail for Amazon, and the Macintosh for Apple. One right decision began the path leading to now.
Based on the definition of start-ups being a company less than five years old, the majority of Americans work for a start-up business. Some likely work for the next multi-billion dollar company but do not realize it.
"In Business, to be a success, you only have to be right once."
- Mark Cuban
Some Will Hit it Big
Toss a dice enough; you will roll double 6's a dozen times in a row. In 2017, America saw an additional 150,000 people reported being self-employed by new start-ups. That is 150,000 new businesses in America every single year. Even taking the worst failure projection with 70% of those companies folding, that is still 45,000 companies sticking around.
With 45,000 new opportunities, the odds of the next Amazon or Apple being founded are quite likely better than your odds of winning the Powerball. Amazon crossed the 100 billion dollar value marker in 2011. We are inclined to believe that in the last six years, one of those 250,000 businesses created that will make it past their start-up phase and hit it big.
The Law of Probability states that if you play out a scenario enough times, even marginal outcomes are realized.
The start-up process boils down to:
Constant regrowth is vital. It is what fuels the constant cycle of:
Start-Up, Growth & Hiring, and Stabilization or Folding
Three out of ten businesses end up stabilizing and continuing the growth pattern. To this day, new companies have continued to rise to take the placed of folded ones. Those new start-ups replacing the previous generation are the key to a healthy economy.
We Need Businesses That Want to be Amazon
The success a start-up achieves compared to Amazon is not relevant to the reason we need them.
We need people to chase that dream. Entrepreneurs who want to be the next Jeff Bezos are fueling the American economic engine.
The process that creates the next Amazon is far more essential to the economy than the company itself. A rising ride raises all ships. We can live without Alexa. We cannot live without start-ups, they are the future.