When it comes to innovation or innovative markets, most people almost always reject radically new things or ideas at first. That’s why it takes extreme personalities to take the necessary risks and to persevere against all odds, criticism and rejection.
I should know. I’m such a personality.
I’m an entrepreneur and innovator in the arena of economics. If it hadn’t been that, it would have been some other kind of arena. It’s just in my blood.
I began my career as a high-level business-strategy consultant at Bain and Company, but I ended up developing my greatest breakthrough insights into economics when I started working with entrepreneurial companies in the early 1980s.
Entrepreneurs are the 0.1% to 1% who create all of the major innovations in the economy and markets, and among them I felt at home.
Everyone else simply follows behind them on an S-Curve, as the car chart below shows.
You see, entrepreneurs think differently. They’re like the random mutations that create changes in genetics, only they’re changing humanity… or, at the very least, society.
The thing is, most mutations and entrepreneurs fail! Even the most astute and well-funded venture capitalists only make it big on one out of 11 investments. That first part of the S-Curve, from 0.1% to 10% is a minefield filled with the rotting remains of failed innovations.
The innovations that survive to the tipping point, at 10% market penetration, are the killer apps that blaze into the mainstream.
But for every strength entrepreneur’s display, they have a weakness as well, as Peter Drucker, the greatest management guru of our time, points out.
Those who drive the innovation phase (0.1% to 10%) are rarely suited to manage the growth phase that follows (10% to 90%). They’re rule breakers, experimenters, perfectionists, all of which interfere with the process of infiltrating the mainstream.
Take Henry Ford, for example. He played a huge part in the creation of the first middle class in history through his innovations with the Model T and the assembly line. But he was also known as a tyrant and dictator. Those weaknesses allowed Alfred Sloan, the greatest organizational innovator of the 1920s forward, to trump Ford in the end at General Motors.
A more recent example is Steve Jobs. From the beginning, he had a similar vision to Ford, but instead of cars, he saw computers bringing power to everyday people. He was a tyrant and very stubborn, much like Ford. As a result, he was eventually kicked out of his own company when Microsoft beat Apple by becoming the standard operating system for all computers outside of Apple.
All of this is fresh in my mind since returning from Australia recently.
I was there in mid-July at GOKO Management Greg Owen’s request. After I spoke at the Secure the Future conference in February, he asked me to return to do a mastermind for a small group of highly successful entrepreneurs.
Let me tell you, there were some very inspiring businesses and visionaries there, including Rodney Adler, who I’d met in 2011 and who very quickly grasped what I was saying.
Rodney epitomizes the entrepreneur. He took over his father’s business and built it into an empire, along with other business ventures.
He became one of the top 10 richest people in Australia.
After selling his insurance company to another, the combined group became the second largest insurance company in Australia.
However, it soon became sadly evident that this new, combined company was financially stressed and it was eventually placed into provisional liquidation. As a result, even though Rodney Adler was no longer a non-executive director, he was jailed for two and a half years for his conduct related to the collapse.
As he describes it, it was “going from the penthouse to the shithouse.”
There are four traits you don’t want to have when heading into the slammer:
- You don’t want to be perceived as a rich.
- You don’t want to be seen as highly educated.
- You don’t want to be Jewish (because in Australia most of the jails are Lebanese controlled).
- You don’t want to be incapable of physically defending yourself.
Any one of these traits makes it difficult but having all four is a nightmare! Of course, Rodney had all four, but he immediately found a way to make peace and become friends with the toughest Lebanese guy there… is that creative or what?
Going to jail was a huge setback for him, but instead of letting the lemon turn him sour, he made lemonade. He is now highly successful again as a venture capitalist, a business consultant, and a bridge lender, with unbelievably high returns and no defaults thus far.
His time in jail only made him more human. He can now fully appreciate the simple joy of reading a bedtime story to his daughter, or just having a short black (espresso in Australia) with a friend.
The bottom line is: You can’t keep a good entrepreneur down!
This is what entrepreneurs do! We’re different. We’re highly creative. We advance precisely by breaking the rules… and accept that the failure rates are astronomical. (All of which is not to say that I advocate breaking the law! I do not.)
It’s thanks to such entrepreneurs that we enjoy an ever-increasing standard of living. And it’s thanks to them that there are always new and exciting investment opportunities that we can take advantage of.
That’s where Adam, Rodney Johnson and I come in. We strive to find those investments for you. We work to develop systems and tools that maximize your investment gains while minimizing your losses.
Sometimes we fail. Sometimes we succeed.
But always, you benefit. So keep reading.
|Follow me on Twitter @HarryDentjr|
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