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Entrepreneurship has never been easy...
Every entrepreneur has to manage hundreds of variables from inner problems such as fear, vision, doubt, and passion to external problems such as the economy, markets, suppliers, employees, banks, customers and competition.
There is often a paralyzing amount of information every day that the modern entrepreneur needs to sift through just to compete and stay alive.
Succeeding at an endeavour like entrepreneurship can seem impossible when we consider the variables and look at the well-known published statistics:
90% of new businesses fail in the first 5 years of operation. Of the businesses that survive, 90% of the survivors fail in the second 5 years.
If we only look at the statistics, success in entrepreneurship looks absolutely bleak.
With such low chances of success, why would anyone want to become an entrepreneur?
"Lies, damned lies, and statistics" is a phrase popularized by Mark Twain.
Statistics can always "lie" and be manipulated to paint a skewed picture of the way things really are.
Although the statistics look bleak, Entrepreneurship is truthfully a simple numbers game. If we can follow a simple formula, then success if extremely likely and maybe even guaranteed.
If you look at the numbers for any business, industry or sales cycle, patterns can found in the numbers. Through the numbers, we can find the path to success.
For example when I was in sales, I knew that I had to make 50 calls to have 10 conversations. From these conversations, I would book 2 meetings. If I booked 10 meetings, I would close 4 customers and earn a predictable amount of profit.
If I wanted to earn a consistent income, I had to make 50 calls a day. My actions determined my results. There was no luck in this game.
Most people, when they enter "the sales world" think that "luck" is a factor. They think that there are "good days" and "bad days" when in fact, every day is the same. The question is, "did you execute your daily repeatable actions to create success over time?"
There is no luck in this world but the luck we make for ourselves.
A wise man once said "the harder I work, the luckier I get".
The same laws of "actions repeatable over time" apply to entrepreneurship as they do to music, sports, chess or any other real world activity.
THE POWER OF 10.
10 is a very powerful number in entrepreneurship.
Since 9/10 businesses fail, an entrepreneur must create 10 businesses to guarantee success. It's simple mathematics.
Business cycles run in 10 year increments. To see real profits in any business or buy-and-hold real estate, you must commit yourself to a period of a minimum 10 years.
Years ago, I used to study the world's most famous and successful rock bands. I was always intrigued by their start-up phase and how the bands became successful. For most bands, it takes at least 10 years of operations to become nationally recognized and reach commercial success.
However, most bands quit after 1-2 years of grinding in the bar circuit.
The most successful athletes are the ones who put 10 years of time into their sports before their competition can catch up. Think of Wayne Gretzky hitting the ice at age 3 or Michael Jordan shooting more free throws than anyone else.
10 years is a standard business cycle and there is no variation to this principal.
Israel Asper, a very successful entrepreneur had a rule. The rule was; if he wasn't successful in a venture at the 10 year mark, then he would re-evaluate his position. In his life, Israel was successful at Media, Politics, Law and many other endeavours. With each endeavour, he committed a minimum of 10 years to his path and he was successful every time.
Most people quit after 1-2 years of no success, but they are too early in the cycle to even dream of being successful.
You can only reap what you sow. If you plant a seed in the ground and expect to have delicious fruit in 2 years, you may have to wait. It takes much longer than 2 years for any endeavour to bear delicious fruit.
To go with the theme of 10 years until success, Malcolm Gladwell, a man who has studied success across many fields has a rule: The 10,000 hour rule.
To quote Malcolm, "it takes 10,000 hours to become a phenom. To be so freakishly awesome, to be such a standout among your peers, that sometimes your first name is enough to tell people who you are: Peyton. Tiger. Venus. Kobe. Oprah."
10,000 hours and 10 years seem to line up perfectly, because 10 years is the amount of time it takes for most people to put in 10,000 hours.
“To become a chess grandmaster also seems to take about ten years. (Only the legendary Bobby Fisher got to that elite level in less than that amount of time: it took him nine years.) And what’s ten years? Well, it’s roughly how long it takes to put in ten thousand hours of hard practice. Ten thousand hours is the magic number of greatness.”
In my own personal cycle, I have only been doing real estate for 3 years and have already achieved a measurable level of success. I know that if I want to achieve substantial or "phenomenal" success, I have at least 7 more years to commit to Real Estate.
However, as an entrepreneur, I have always had a side business running and when I measure the time and hours I have invested as an entrepreneur, I am likely further ahead of other "3 year real estate entrepreneurs" in my 10 year development cycle.
The combination of being 3 years into my Real Estate cycle and perhaps 5-6 in my entrepreneurship cycle may explain why my Real Estate success has come faster and easier than past endeavours.
I can speculate that my past knowledge has compounded and I have learned from my mistakes in my past businesses mainly in Music, T-shirts and debt-buying.
If we are to measure my success by the "power of 10", I am on my 4th year in my real estate business and have 7 more years to commit to my cycle before I have matured as a real estate entrepreneur.
When you get a chance, analyze your own business experience and try to find your position in the 10 year business cycle. Examine the "power of 10" rule and figure out where past experiences have fed your current experiences and how many more years you have before you reach the 10 year mark.
Measuring myself by these metrics has been extremely valuable for understanding where I am at today - and where I am going.
I can gain perspective on my position when I apply the "power of 10 rule", I can see how much longer it will take to achieve guaranteed success in entrepreneurship.
In my mind, there is no such thing as failure. Failure only happens when you give up.
Thanks for reading,
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