Entrepreneurship is a calling that many aspire to. Almost half of the working population in the United States will try to become an entrepreneur during their working career. I am using the word entrepreneur in the classic sense of the word: someone who works to start a business as well as someone who leads a business they have started.3 Fewer than half the people who try to start a business get it to the point where they actually get a paying customer. Even after the entrepreneur has found a real customer, about half give up and shut down within five years. Fewer than one in four entrepreneurs who start out remain in business for more than five years.4
Almost all entrepreneurs with businesses that have lasted five years have succeeded in making enough profit to stay in business, but few of these entrepreneurs ever grow their firm to the point where it is self-sustaining. By self-sustaining, I mean that the enterprise meets two criteria:
- It can operate whether or not the founder is active in the firm.
- It is able to gain new customers with new innovations in its products or services; that is, customers lost through aging and shifts in the market can be replaced by other customers buying new products or services.
A self-sustaining firm is a valuable tangible asset. A firm that is not self-sustaining will go out of business. This is the unfortunate fate of the vast majority of all the profitable enterprises ever founded. It is estimated that less than 2 percent of all entrepreneurs get to the point where their enterprise has created tangible value and is self-sustaining.
Leading an enterprise all the way from conception to the point where it is producing value and is self-sustaining—which means you are succeeding as an EL—is much more challenging than starting a company. If you want to see your idea reach its full potential, if you want to enjoy the fulfillment that comes from having made a tangible difference in the world, if you want to achieve financial success, then you must aspire to be an entrepreneurial leader.
Adam was an excellent entrepreneur, but he was not an entrepreneurial leader. He didn’t have to lose both his job and the control over his idea and his company. But he just didn’t understand what he needed to know—that what he had done (and done very well) to establish his company as a viable enterprise in a potentially competitive field was not all that he needed to do to lead his enterprise successfully to self-sustainability. What had worked so well even weeks before now no longer worked. Adam’s business had moved into a different stage of maturity, with a different set of challenges and needs, requiring a different deployment of leadership skills.