There is no accounting for taste.
AGE OLD MAXIM
This one is another item from the "ideas in storage" which are things I contemplated years ago and left unfinished. This is the most vexing of them all which I call "the entrepreneurship problem." De gustibus non est disputandum is a Latin phrase that says, "In matters of taste, there can be no disputes." The simpler version is that there is no accounting for taste. That is the kernel of the entrepreneurship problem. You will go broke trying to account for the taste of the public.
95% of all businesses go bust in the first five years of operation. I heard that stat decades ago, and I believe it to be true. There are some things an entrepreneur can do to push the odds in his favor such as not loading up on debt, but there is no way to make the public buy your widgets. And you will pull your hair out trying to guess what widgets they want to buy. This problem is why so many businesses fail and why so many people are unable to beat the stock market. Entrepreneurship is gambling. There is no other way to view it.
Playing blackjack has better odds than entrepreneurship. The simple fact is that capitalism destroys a lot of capital. If you have ever seen a dead shopping mall or a defunct Blockbuster, you know this to be true. Gambling your money on a business venture makes no sense. Yet, many create businesses to watch them fail in misery. You will go broke trying to guess and serve the fickle interests of the public.
As a blogger, I know this firsthand. I would love to have a high traffic blog. People recommend all sorts of self-promotion gimmicks and search engine optimization strategies, but they are no substitute for content. To get readers, you have to write things they want to read. I have no clue what the public wants to read. I only know what I want to read, and I write that content. At the end of the day, I write because it helps me think. This is why I will abandon this blog one day and just write in some notebooks. That day is not today.
One of the strategies that I have for dealing with the entrepreneurship problem is to invest in low cost index funds. I am agnostic when it comes to businesses, so I buy the basket of stocks instead of trying to pick the winners. I wish there was a similar strategy for blogging, but there isn't. The closest I have to a strategy is to write what you like and know and to be eclectic. I am always surprised by what gets traffic and what doesn't. It is never what I would have picked.
Another strategy I have is to lower costs. Thrift is always a winning strategy. Steve Jobs may have started Apple, but Tim Cook made it massively profitable by cutting costs with outsourcing production to China. Saving money is not as sexy as creating innovative products, but it is the most reliable way to make a profit. Thrift is the cornerstone of good management.
The problem with thrift is that you have to make money in order to save it. This is why Apple is more profitable than Dell. Without that customer demand, the best you can do is managed decline. This is what happened to Apple when they fired Steve Jobs, and this is why their decline was reversed when they brought him back. Talent matters even if you can't explain it.
Another strategy I have is consistency. I don't know what the public wants, but they don't want to be punked. When they buy a rock album, they don't want to hear a disco album on the turntable. Coke discovered this with New Coke.
Entrepreneurial success boils down to pure dumb luck. Content creators on the internet discover this when something they produce goes viral. They are rarely able to duplicate that success and end up becoming what we know as one hit wonders.
Is there something that the public wants and always wants without having to play the entrepreneurial guessing game? Yes! That something is money. People always want money. You don't even have to consider the color or the flavor. The problem with money comes down to supply. This is why the financial industry is the most reliable way to make money. The demand for money will always exceed the supply. As a wise man once put it, "If you want to make money, work in money." This is why the doctor's stockbroker drives a nicer car than the doctor.
I find financial services to be morally repulsive. I knew a girl once who made a hefty paycheck working in the payday lending industry. I can't do that sort of thing. People who work in these predatory financial industries justify it all by claiming they are helping their victims. They are merely exploiting their victim's desperation and stupidity.
There is something the entrepreneur wants, and that is labor. Somebody has to put the soda in the bottle and get it to the grocery store. This is why you can reliably earn a wage of some kind in our capitalist economy even if you are clueless when it comes to entrepreneurship. If you can work, people will pay you. This is why the mass of people work for the lucky few.
Eventually, the good luck of the entrepreneur runs out. This is why the exit strategy has become so popular over the last few decades. People start a business now in the hope of selling it to a larger corporation. Imagine Steve Jobs selling out to IBM. That is essentially what we have happening today.
The most reliable way to make money is with labor. You can sell your labor to an employer, or you can sell it directly to the public with a service type business. I am a big fan of service based businesses like lawn care, oil changing places, housecleaning businesses, and on and on. I am not a fan of serving the public taste like a convenience store or a restaurant. Offering products instead of services is how you gamble and go broke.
My formula for success is simple. Work for an employer. Start a service based business with your own labor. Be thrifty. Invest in index funds. This is grinding. You won't become a billionaire, but you will have a decent living. Don't fall for thinking you will be the next Jeff Bezos with a business selling books out of your garage. Bezos gambled and won. Everyone else lost. I recommend winning by not losing.
This blog is the only gambling that I do today. Each post I write and publish represents a pull on the lever of the internet slot machine. Once in a blue moon, I will write something that goes semi-viral. Otherwise, I might get 20 views for a post like this. I know that half of those come from bots trolling the ocean floor of the internet. The upside is that this blog reminds me again and again that entrepreneurship is gambling. The only reason I keep playing is that I am a writer who is compelled to put his thoughts into words. I will write for the rest of my days even if no one reads what I have written. Ultimately, I am writing for myself. If I was publishing for the world, I would repost memes and cat videos. Facebook has this covered.
In conclusion, the only antidote I have for the entrepreneurship problem is to not play the game. Focus on thrift, labor, index funds, and service based businesses. Don't open a restaurant or gamble on some app or widget you have developed. You can't make people like anything or pay money for it. And if you see some lucky entrepreneur that made it big, consider the unseen folks who gambled and lost. People always forget the losers, but the losers tell us the truth about things. Luck is not skill. In entrepreneurship, you want to be lucky.
