The Other 99 Percent: Entrepreneurs

1/27/12Follow @sramana

In my recent piece Reengineering Capitalism I highlighted a phenomenon that the global entrepreneurship ecosystem is paying very little attention to: Over 99 percent of entrepreneurs who seek funding get rejected. Yet, the entire world is focused on the 1 percent that is “fundable.”

The media, when pitched a startup story, is interested in who funded the venture. They seldom ask how much revenue the company has or if it  is profitable.

Incubators take pride in how exclusive they are and how many “deals” they “reject.”

Angels and VCs, of course, discard most of their “deal flow.”

And entrepreneurs? They seem to have confused the definition of entrepreneurship altogether. Entrepreneurship, they mistakenly believe, equals financing!

This is wrong.

There are numerous stories of successful businesses that have been built without a penny of outside financing. I want to share with you some wisdom from the heroes of the other 99 percent. They live in a world of entrepreneurs who enjoy their freedom and are not looking to sell their businesses or take them public. You could say these businesses are built-to-enjoy, as opposed to built-to-flip. Needless to say, outside financing, by definition, requires an “exit,” and for most businesses, that means a sale to a larger company.

But the entrepreneurs I will introduce you to today are not interested in selling their companies. They just want to continue doing what they are doing: building value.

Meet Girish Navani, CEO of eClinicalWorks, a super-successful healthcare IT company based in Boston. He has never taken any funding but has built a $100 million-plus business by delivering value to customers.

Girish says, “I don’t foresee leaving the company for at least 10 years. I would like to leave it a private company with no external investors and absolutely no thoughts whatsoever about Wall Street. I am having fun and take great pride in my freedom. There is no reason I would give that up. We are a cash flow positive company. We have recurring revenues and no debt. We have a large customer base that is growing exponentially.” (You can read Girish’s full story here.)

Meet Andrew Fox, CEO of ClubPlanet, a $30 million-plus nightclub ticketing services company that is also 100% founder-owned. Andrew loves nightlife and says, “The business is very successful and has a lot of room for growth. I think that we have a lot of suitors out there who mention really ridiculous numbers at times. This is such a great lifestyle business that I don’t know if I could ever sell it. All of my previous businesses I built to sell, but this time around you might find me right here in thirty years. I hope by then it is $300 million a year. Based on our growth trajectory, we are seeing really good signs of improvement. (You can read more of Andrew’s story here.)

Then there is the oft-cited Sridhar Vembu, who has turned all tables with Zoho, a $100 million-plus SaaS company that … Next Page »

Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs globally to reach $1 million in revenue and beyond. She is a Silicon Valley entrepreneur and strategy consultant, she writes the blog Sramana Mitra On Strategy, and is author of the Entrepreneur Journeys book series and Vision India 2020. From 2008 to 2010, Mitra was a columnist for Forbes. As an entrepreneur CEO, she ran three companies: DAIS, Intarka, and Uuma. Sramana has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Follow @sramana

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  • Wingnut

    Hi

    You DO see the pyramid scheme symbol on the back of the USA one dollar bill, right? You DO see the servitude infestation in capitalism, right? And do you see the “pay up or lose your wellbeing” Chicago mob-like felony extortion widespread within capitalism? Do you see the “join or starve” felony extortion done to the 18 year olds… by this ugly competer’s church called capitalism? See how forcing competer’s religions onto 18 year olds… kills membership in the cooperator’s church (Christianity/socialism)?? Do you understand that AmWay (American Way) (New World Order) got “the exclusive” (legal tender) on the TYPE of survival coupons (money) accepted in supply depots (stores) and leverages 18 years olds into the organization via that felony activity as well? (It puts AmWay-coupon slaving requirements called price tags… on all the survival goods). Do you understand how farmyard pyramids work… from your childhood? Remember? Upper 1/3 are “heads in the clouds” while the kids on the bottom ALWAYS GET HURT from the weight of the world’s knees in their backs? Still with me? Do you see anything illegal, immoral, or just plain sick… in any of this pyramid scheme’s activities?

    Us American Christian socialists are still patiently awaiting the natural fall of the pyramid-o-servitude, or the busting of the free marketeers felony… by the USA Dept of Justice. Us Christians are VERY CLOSE to issuing a cease and desist order until the servitude and inequality goes away… which means it turns into a commune. Commune is a word we LOVE when used in the word “community”… but its one the caps HATE when used in the term “commune-ism”. Go fig. PROGRAMMED!!

    Do a Google IMAGE SEARCH for ‘pyramid of capitalist’ to see a full color picture made way back in 1911, when capitalism was first discovered to be a con/sham instigated by the Free Masons/Illuminati. Folks sure bought into the thing… hook, line, and sinker just the same. The caps didn’t even check if a string was attached! Now THAT’S easy fishing, eh?

    Time to level the felony pyramid scheme called capitalism. We all must abolish economies and ownershipism worldwide, and right now. Economies just cause rat-racing, and rat-racing causes felony pyramiding. BUST IT, America! Look to the USA military supply/survival system… (and the USA public library system) for socialism and morals done right. Equal, owner-less, money-less, bill-less, timecard-less, and concerned with growth of value-criteria OTHER THAN money-value. Quit doing monetary discrimination immediately, and make it illegal. There are MANY measurement criteria of “value”… not just dollars. Try morals, efficiency, discrimination-levels, repairability, etc etc. Economies are cancerous tumors, and to cheer for their growth… is just insane. Profiting causes inflation, so if caps LIKE inflation, and if they LIKE a terrible time in afterlife when they meet the planet’s ORIGINAL OWNER before caps tried to squat it all with ownershipism, then keep it up with the felony pyramiding. I dare you. While us Christians are finally bulldozing that pyramid scheme back to level, lets make servitude and “join or starve” (get a job or die) illegal in the USA, and lets level the architecture seen in USA courtrooms, too. Right now, USA courtrooms are church simulators or “fear chambers”, by special design. Sick.

    Isn’t that back-of-the-dollar pyramid… a Columbian freemason symbol? And WHERE is the USA gov located? District of Columbia? (Not even part of the USA!). How much more blatant can ya get? The “Fed” runs a pyramid scheme called the free marketeers. If you’re using the “federal reserve note” certificates, or using no-other-living-thing-on-the-planet entitles of ownership, you’re bought into a servitude/slavery con/sham… called capitalism. Pyramiding 101.

    Larry “Wingnut” Wendlandt
    MaStars – Mothers Against Stuff That Ain’t Right
    (anti-capitalism-ists)
    Bessemer MI USA

  • Archie

    Thankyou! I’m glad somebody is giving us a view from a different perspective that makes sense.

  • Jared

    I wish the author and others would make a clear differentiation between Internet-based Entrepreneurs and the other 99% of Entrepreneurs (i.e. those willing to start companies that produce actual physical goods.)

    As a former Entrepreneur in the world of e-commerce and Web entertainment, I understand the buzz in the business sector and the allure to the media. But, most of these companies simply find better/more efficient ways to move money around. Very few of these companies actually produce physical products with per-unit costs. This is a lucky break inherent only to certain business models.

    It’s just not that tricky to start an internet services company from the ground up. Most spend years making money with very few staff and very little capital requirements. Having said that, think of Amazon.com. At no point in their founding were they a company that could start by “bootstrapping” itself anywhere without millions in outside investment. They had to buy a ton of stuff before selling anything.

    The rest of the 99% of business founders have real-world funding challenges beyond anything the Internet companies ever experience. They are not buying raw materials, building manufacturing space, hiring dozens of skilled tradesman, monitoring market pricing and expanding product lines on store shelves. This takes millions of dollars once a company passes a certain size threshold. The world of brick and mortar, production-based businesses fail if they don’t receive enough outside investments at critical moments of growth.

    This article should be a bit more specific and use special terms denoting -Internet- entrepreneurship.

    ~Jared Saverino

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