I made a New Year’s resolution this year. To be fair, this is the kind of resolution that President Obama should be making, not a mere mortal like me. But I did, anyway.
Through the Entrepreneur Journeys project, I have come to conclude that the most vulnerable phase in an entrepreneur’s life is the pre-$1 million revenue stage. This is where numerous ventures fail. Once the $1 million revenue milestone is crossed, it’s easier for entrepreneurs to find additional customers, manage working capital and access funding, whether it is credit or equity.
In my online strategy roundtables, the vast majority of entrepreneurs I work with are in this rather vulnerable pre-$1 million revenue stage.
Thus, I have come to the conclusion that if I could help a million entrepreneurs globally reach $1 million in revenue (and beyond), that would be the foundation of a robust, well-distributed and sustainable-economic-value creation that would add up to a trillion dollars in global GDP. It would also result in the creation of at least 10 million jobs around the world.
By using bootstrapping, crisp positioning, and laser-sharp focus, entrepreneurs can, in their individual domains, build small businesses with solid foundations.
Beyond that, depending on how large the market opportunity is, they can scale to their potential, with or without external investment. Some will scale up to $10 million a year, some will scale to $50 million. And a small percentage of these ventures may even scale to a billion dollars.
Through my efforts–blog, books, columns, roundtables–I am trying to develop a scalable entrepreneurship education system that entrepreneurs from every corner of the world can access.
As I made my resolution, I also asked the readers on my blog for help. Many stepped up, and very quickly, a core group of “1M/1M Ambassadors” came together. We used some of the roundtables to brainstorm about strategy, and we decided that we would use social media channels and entrepreneurship-development organizations to further our mission.
Our goal is to teach Silicon Valley’s best practices to a global community of entrepreneurs so they avoid common mistakes and significantly improve their chances of success. Normally, only one in 10 or 20 entrepreneurs succeed. The rest fail. Imagine how powerful an economic impact it would be if we could alter the mortality rate and make 10 out of 10 ventures succeed? That’s where I am going with this.
Together, we have also started analyzing the key reasons ventures fail. Based on my roundtables, I now have a reasonable sample of entrepreneurs for me to do some trend analysis and draw a few conclusions:
A good 25% of the entrepreneurs don’t bother validating their ideas. They build products without talking to prospective customers first, and hence, more often than not, they build the wrong product. If we can simply plug this basic gap, we can improve their chances of success dramatically.
Another 25% are immediately interested in raising money. Again, raising money without validating the business is pretty much impossible. These entrepreneurs go bumping from door-to-door, getting refused repeatedly, their emotional energy draining each month, their resilience eroding slowly but surely. This is a pattern I am seeing constantly. If we can address it, we have a chance at significantly impacting infant entrepreneur mortality.
So how do we check this excessive infant entrepreneur mortality? Such immense entrepreneurial energy, instead of being squandered through these failed ventures, needs to be harnessed and put to GDP-building and job-creating work.
The answer: education.
We get them to adopt the best practices and help them avoid common mistakes. Mistakes in financing strategy, mistakes in positioning, mistakes in go-to-market strategy. People often think being an entrepreneur is about raising money ASAP. Wrong. Being a successful entrepreneur is about crafting a business that can have customers, revenues, and profits. Our goal is to teach them the mechanics of this “crafting.”
Take the example of Greg Gianforte, CEO of RightNow, whose story I have told in my book, Bootstrapping, Weapon Of Mass Reconstruction. Greg did not write a line of code until he called a hundred potential customers and asked whether they found his concept compelling. Not until he had a clear sense of what the customer pain point was did he start building a product. This is an example of the kind of things savvy bootstrappers do. Naive entrepreneurs build an entire product before speaking with a single customer or prospect.
And this kind of early validation leads to your positioning. You figure out the value proposition of your product and then gradually build out a full positioning and go-to-market strategy based on methodology–I have discussed this in my book, Positioning: How To Test Validate and Bring Your Idea To Market.
Readers might wonder what it would cost to accomplish this ambitious mission. After all, we are in an era of big government and bailouts. Why not ask the government for a few billion dollars?
I don’t think so. If I am not mistaken, this goal can be accomplished online, and with a similar grassroots movement that catapulted President Obama to the White House. Yes, it needs many more volunteers to take the movement forward, and if the President were to give us a hand, sure, that would help. But make no mistake–an entrepreneurship movement is ultimately going to be taken forward by entrepreneurs.
In America we have 30 million people out of jobs. They need a turnaround strategy, and mine is entrepreneurship. Around the world entrepreneurial energy is bubbling, as great nations like India, China, Brazil, and Indonesia are starting to find their stride. This decade will be a very special time for development economics.
President Obama, you are always on television asking for good ideas. Well, here is one.
Are you listening?
If you are interested in working on the 1M/1M project, please check the next steps and join the LinkedIn group 1M / 1M Ambassadors. You can find our current list of 1M/1M Ambassadors and more information here.
More information about the entrepreneurial development organizations (EDOs) that are partnering with us on this mission can be found here.
Note: 1M/1M is NOT a non-profit organization and future service / revenue generation plans will be rolled out as those plans are finalized.
* Strategy Roundtables for Entrepreneurs: Cornerstone of the 1M/1M program
* The EJ Methodology
* How To Check Infant Entrepreneur Mortality (IEM)
* 1M/1M Ambassadors: Next Steps
* 1M/1M Strategy Discussion At the Jan 21 Roundtable
* TechCrunch/Vivek Wadhwa’s “Is Entrepreneurship Just About The Exit?”
* Mediabistro’s mbStartups’ “Before You Pitch An Investor, Pitch Here”
* Los Altos Town Crier “Local e-business joins global effort to boost economy”
* BloombergBusinessweek “Stop Making These Startup Mistakes”
* Rieva Lesonsky’s “1 Million Entrepreneurs, $1 Million Strong? A Worthy Goal”
* Sramana explains the 1M/1M strategy during this Jan. 21 roundtable recording.
* Blog Business World interview.
* News On Women article.
* Irina Patterson’s blog – She’s an 1M/1M Ambassador.