Starting a Business? Sorry, but Half of All Businesses Failed in 2021
Do this instead: Sell shovels instead of gold
The pandemic hit my startup like a ton of bricks.
We were one of 200,000 businesses taken out by the world health crisis. Some survived the initial shockwave of pandemonium, but many of them crawled the end of their road in 2021.
“The percentage of businesses that fail increases to 31.2 percent in the second year and 38.8 percent in the third year. By the fifth year in 2021, the new business failure rate reaches 49.7 percent.” — Oberlo
Almost half of businesses established in 2016 have gone under by now. It makes you think.
Naturally, I ask myself whether I want to start another business, but I remember the odds are stacked against me. We’ve heard the numbers: new businesses have a 90% fail rate. Ideas are shattered year after year.
You can change the odds.
Instead of building a brand and relying on other people to get work done for me, such as the plight of an entrepreneur, here are some alternative ideas.
Become a teacher
Teaching is an undervalued skill.
I come from a long line of teachers, and I’ve even spent some time in the classroom myself. But, I’m not telling you to get your credential and waste your life away managing crazy kids.
Some teachers are quitting their jobs because they have unique skills. They make more money selling lesson plans than actually teaching.
Two things make this work: teaching and entrepreneurship.
Teachers can be accidental entrepreneurs, just like entrepreneurs trip into the realm of education.
Take a look at prominent content creators, and you’ll see what I mean. Tim Denning, for example, has multiple courses focusing on social platforms.
There’s value in knowing how to teach people what you already know.
Sell shovels, not gold
Me telling you to make an eCourse is a vague idea.
What makes a good course?
How much should it cost?
How do I go about marketing it?
These are all great questions, and there are resources scattered across the internet to guide you if you want to know the answers.
Pro tip: there are no “right” answers in the online game.
But let me answer the “where you should start” question with an example from my childhood.
In the fourth grade, I read “By the Great Horn Spoon.” It’s about a kid and his family butler who sails from the east coast of the United States to California during the gold rush. You might remember this one.
They pan for gold and seize a sizeable pile to take home. Then, out of nowhere, they lose it all. Distraught, the pair is about to give up and head home, but at the last moment, lightbulbs flash.
Spoiler alert: they start a barber business for gold panners. There are hundreds of men who haven’t shaved in months and have accumulated microscopic bits of gold dust in their beards.
The two heroes save the hair they cut and filter the gold, and in the end, amass an even grander fortune. They didn’t exactly sell shovels, but they did provide a special service at the right time and reaped the rewards.
In today’s world, there's still a market for everything. There’s money in your niche, but it takes time, effort, and a little struggle to find the right fit.
Toss ideas into a slot machine
Vegas is built on bets.
Finding your “pocket of awesomeness,” as Tim Denning would say, is a lot like gambling, except there’s no risk of losing your house.
Testing ideas with little risk is the best way to go about it. What I mean is, instead of investing a chunk of your net worth into a high starting capital business, write a blog post about it.
See if you learn anything:
How much time it takes to write the article
What people have to say in the comment section
How many people read the story
Whether or not it’s a good idea once you’ve written it out
Writing is low risk, high reward. It’s also such a low-effort task that you don’t even have to go outside or recruit help from freelancers who work for money.
It just takes a little time and mental effort.
Testing is your best bet against failure
Tests will result in losses more often than not, but that’s how you know what you're doing is working.
When you get a hit, that’s when you take a step back and truly learn why the idea worked. But you’re not ready to go to market yet.
Look at the data, refine your idea, take a different angle if you’re daring. Then hit publish again and look for similarities in your data.
A testable hypothesis is a strong indicator of success.
Wrap up
Businesses in 2022 are digital.
I’m all about the advancement of technology. I’m nothing without the internet. I’d still be teaching in an elementary classroom without it.
The company I work for is entirely remote. The creator economy is booming. eProducts are lower risk, with higher rewards than physical items.
Consider a slower approach before you take an idea and head to the races. Think about whether your concept provides any value, not to you but to potential customers.
Take some time to become a teacher, and educate yourself on the importance of content—solid, actionable content fuels businesses. Sell your ability to teach.
Teaching is a skill that can be hand wrapped into a product with a bow on top. Test it out.