Rebel Entrepreneurs Avoid Conventional Wisdom
This is a guest post by Jonathan Moules author of The Rebel Entrepreneur. Moules shares lessons learned from hundreds of companies that point to a rebellious entrepreneurial approach. He describes lessons like don’t rely on others to fund your idea, imitate creatively, keep value higher than price, pivot often, and why they typically don’t get loans from big banks.
There is a dirty little secret that most famous entrepreneurs and those that back the start-up culture prefer not to tell you—success in business is a minority sport.
In most developed countries, the overwhelming majority of all privately held enterprises are small – about 95 per cent, according to the OECD, the economic body that measures such things. The vast majority of these are sole traders. There is also an incredibly high failure fate among new ventures. About 8 out of every 10 of the companies started each year do not make it to their fifth birthday. Only a small percentage of those businesses that manage to struggle on beyond infancy then go on to create the real growth drivers of an economy.
However, it is these companies that are so important to the success of economies, providing new products and services as well as improvements in productivity that raise the standards of living of a society, and, perhaps most importantly, the lion’s share of new private sector jobs. Just 7 per cent of businesses are responsible for more than half the new employment created in the UK economy, the British think tank Nesta recently calculated. This figure is about the same across developed nations, according to the OECD. Nesta went further than this in its analysis, however, concluding that the job creation is actually only happening among very young fast-growing companies. Successful entrepreneurship, it seems, is a very exclusive club indeed.
What is it that sets these companies apart? One way to define them and their leadership is as rule breakers. That is what my book, The Rebel Entrepreneur, is all about. I am not saying that founders can only succeed by engaging in illegal behaviour. Sadly, there have been too many examples of this in recent years, but these people are criminals not wealth creators. No, the true rebel entrepreneur knows that the best way to get ahead is to avoid being sucked in by conventional wisdom.
Take pricing strategies, for instance. In hard times, conventional wisdom may say cut your prices to preserve customer numbers and therefore sales. However, as many successful companies have shown, the best policy is often to raise your prices. Look at Apple, the world’s most successful technology business, which insists on raising the prices of its products even as the western world struggles to recover from recession. Does this put off the customers? Not a bit of it. In fact, the high price appears to act as a guarantee of quality. More than this, by maintaining the high price, Apple is able to continue to increase revenue and profit even if sales dip.
Rebel entrepreneurship can be found in most areas of business building if you are prepared to look. Just be prepared to resist following the crowd.
Enterprise Editor for The Financial Times, where he has profiled hundreds of companies and their owners. He has written extensively on successful entrepreneurs. Moules spent 5 years in the FT's New York office, where he held numerous positions, including technology, media and telecoms news editor. He wrote specifically about the US mobile phone industry and new media businesses, and he covered the dotcom bubble and its aftermath.
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