Why Start-ups Fail…Lack of Creativity?
According to Investopedia, in 2019 the failure rate for start-ups was significantly high at 90 percent. Wow! That is quite discouraging news for the aspiring entrepreneur, but wait, it gets worse. Approximately 75 percent of venture-backed start-ups fail and under 50 percent of businesses make it to their fifth year. Trust me, I have more disconcerting statistics to share, but I will leave it right there for now.
So what is my interest in this topic? Well…I am glad you asked.
As an economist, I am often criticized by members of the business community that our advice can sometimes seem duplicitous. We lobby for sustainable growth, yet we support initiatives that “stifle” small and medium enterprises (SMEs). From our ivory towers, we boldly criticize the business sector for its lack of innovation but, we ourselves are oblivious to the complexities in birthing an idea and transforming it into a thriving business.
I for one, can attest to this reality. Over the last couple of years, I tried my hand at developing a few Minimum Viable Products (MVPs) and honestly I can say, starting a business is no easy feat. The path is riddled with enough smoke and mirrors to make you think that you’re in a game of Dungeons and Dragons. Simply put, this kind of work is not for the faint of heart and hence, I can see why most people opt for the safe 9 to 5 at an established company, which, by the way, I have no problem with. There is no judgement on my end and to each his own.
Nevertheless, I would like to shed some light on this matter and propose a simple strategy that may improve the success rate and growth of start-ups.
Take Chances to boost your Creativity
Yeh…I get it, we need to be more innovative…we need to be more creative. I hear this all the time but do we even know what this means?
In the business world, there is no denying the cultural dynamic behind every economic policy. Deny all we want, but it is evident that our upbringing, education, successes, failures and other life experiences, are somehow driving our current thought-patterns and decisions, which in turn, propel our present socio-economic engine.
Just like the body of an Olympic gymnast was trained to tumble, contort and display ‘superhuman’ strength from the age of 6 years, so too, our “Creativity Muscles” are being developed from this tender age. If you observe children playing at a park, it is clear to see that they are quite adventurous and in some cases, downright reckless. However, something weird happens as we age. Our joints become stiff. We can no longer touch our toes and this dwindling pliability somehow spreads to our minds, as we become more risk-averse. All of sudden, taking chances is discouraged, as we submit ourselves to a life of routine. So why does this happen and what can be done to avoid this phenomenon?
While I am no psychologist, there is one glaring truth. Studies have shown that our minds can learn new thought patterns, even as we age. Neuroplasticity allows the neural networks in the brain to change through growth and reorganization, thus creating new pathways and connections. Without getting too technical, this just means that we all have the ability to change the way we think.
But how do we train our minds to be more innovative? There may be many methods but for starters, we can challenge ourselves to do something different every day. You might think that your job is boring but the onus is on you to take the mundane and bless it with your ingenuity. Take for example, a simple quarterly sales report. Ask yourself, how can I add more value for the reader? Can I provide new insightful metrics, or present it in a more palatable format?
Also, doing something that is challenging brings out the best in us. If you commit to learning something new every day, this can make a big difference in your life. Learning a new language, an instrument, salsa dancing, preparing a new dish, or taking that online course that you keep promising to do every new year. These types of activities break our routine and most importantly, it throws us out of our comfort zone. And this my friend, is the real meat of the matter. Doing something different or more challenging will make us more uncomfortable and…
“You need to be Uncomfortable to become Creative.”
So this is a great place to start but this is not all. Stay tuned for part two of this article, where I discuss another reason why start-ups fail and just to whet your appetite…it’s about our PERSPECTIVE.
