Statistical Biases Towards Entrepreneurship…
I saw a headline on Twitter a few days ago, saying ‘1,700 people in America are becoming millionaires everyday’. And it got me thinking…
Like most things I write on, it was a curious mix of annoyance and intrigue.
The word MILLIONAIRE rolls off the tongue so nicely. A word we’ve muttered in daydreams since childhood and, as evidenced above, still somewhat of an illustrious club. For many of us, it’s an illusive goal. Maybe even the ultimate career goal.
But truth be known, A MILLION AIN’T WHAT IT USED TO BE. And I’ve got a suggestion as to how you can increase your chances of getting there. It’s a two pronged strategy and involves using all the extra millions that are out there, to help yourself become part of ‘the millionaires club’.
A few facts I want you to think on, to preface this blog;
- Everyday, globally, we are printing more currency
- There is more currency in circulation today than there ever has been
- Tomorrow there will be even more
Money is more prevalent than ever before.
Where is the money going, you may ask. House prices seem more elusive than ever. Homelessness doesn’t seem to be improving. Nor does world hunger.
Unfortunately (and I mean that absolutely sincerely), these are social problems that there is no monetary policy in place to help solve. There are no regulations, mandates or even agendas for the extra monetary influx to be equitably dispersed. So therefore, what actually happens is that the money actually flows is towards the top end of town. Yes, the rich get richer.
But today is not for having a whinge about it. Today is focusing on a strategy to increase your chances of joining that top end of town. Joining the millionaires club. Or if money isn’t your agenda, then having the means to become a philanthropist and give back. Social entrepeneurislism is bigger than ever and is solving some of the biggest challenges on the planet. Or even just so you don’t have to trudge back into that place you call work, to that person that calls themselves your boss.
I commented earlier that ‘a million ain’t what it used to be’ and neither is a millionaire. Chances are that you walked past one already today. There might even be one living next door. Your plumber might be one. Even the unemployed guy down the road might have somehow stumbled on a million.
The following graph creates an interesting snapshot…
The mere fact that there is more money than ever begets more millionaires. Oh, and we now have billionaires and will probably pretty soon have trillionaires. I don’t even know what comes after that but I’ll ensure I Google it because there will probably be one of them soon too.
So you may, yourself, be asking SO WHAT at this point. You know that each countries Federal Reserve (or Mint) prints money. You probably know that they print money faster than prices increase (aka, inflation) and you can easily acknowledge that more money equals more millionaires. None of this is exactly secret and could hardly be called any kind of science.
How does that help me?
Well here’s where I really got thinking. There’s more millionaires than ever (1,700 new ones per day, apparently) and there’s more money than ever. How can you use these facts to improve your current situation, given that you can’t exactly go and pick this money off a tree?
You have to access the extra money and have it work to make you money.
As you likely know, there are two ways to access money.
The debt market has not changed. It is no easier to borrow money today than it was 100 years ago. So we will not focus on debt.
Equity though, has changed significantly. Particularly in the area of venture capital (aka, VC). There’s a million articles out there on VC, so I’ll cover this very quickly. Venture Capital is where a fund provides your business with liquidity in exchange for taking a percentage ownership. It’s an investment in your business but ultimately, an investment in you and it gives you a gigantic legup in not only bringing your product to market but scaling it internationally and meeting the right people to help you make it a raging success. Or even *drumroll* a unicorn.
Worth noting: The appetite for swapping capital for equity is aggressive and growing, in both the fiat and cryptocurrency fields. And with cryptocurrencies joining the party of more currency in the market (check out my article here for extra context — https://medium.com/@leightaylforth/cryptocurrency-flow-on-effects-cb6ecf6b7f77), I believe that now is a better time than ever to be pitching for VC cash (or coin), as a way of putting yourself (and your team) on the map.
Going back to the earlier point of there being more money in the system each day,Venture Capital is one of the main areas that all of this excess money is flowing. Wealthy individuals invest money into a venture capital fund, with the aim of receiving a very healthy return and the ambition that the VC fund they’ve chosen to invest in, finds the next Facebook, Uber, WeChat etc.
A few more facts to quickly touch on;
- Not only is there more fiat currency than ever in the system than ever before
- There is also a rising cryptocurrency market, whose investors/coin holders have an unprecendented risk appetite
- Disruption within markets is prevalent with VC’s always looking for the next big thing and willing to consider off the wall business concepts in a bid to ‘back a winner’
- Venture Capital has become an international game. Chinese funds invest in Australian businesses, French funds invest in US businesses and US funds invest in Israeli ventures and so on around the world. What was once domesticated, is no longer
- Venture Capital isn’t only a game for VC Funds. We are now seeing big corporates with healthy bank balances, enter the VC game, with examples being Intel, Google, Johnson & Johnson and Telstra, just to name a few
With this in mind, sitting in a ‘desk job’ or ‘career’ for your entire life has never been less attractive, statistically speaking. With more money printed every day, your ‘slice of the pie’ salary is eroded and your buying power is less than ever. I’m not sure how many millennials I need to see complaining about how the baby boomers had it easier, before somebody cracks and starts explaining economic principles to them.
But on the other hand. There is more money than ever sitting there waiting to invest in entrepreneurs. And not just standard entrepreneurs. Anything is fair game. I saw a team looking to reinvent the hamburger the other day and another team looking to create a luxury toilet. Some of the ideas coming out of Japan and Eastern Europe are absurdly off the wall brilliant.
But the person who doesn’t get ahead, who doesn’t join the million/billion/trillionaires club is the person who sits there and stalls. Complains. Procrastinates. Plays on their phone all day.
Hopefully this has acutely demonstrated that MONEY IS EXPONENTIALLY MORE PLENTIFUL THAN EVER BEFORE. And with increased competition between VC’s and Corporates to invest it, you are statistically hundreds of times more likely to invested in and thousands of times more likely to join the financially elite, if you’re willing to be creative and roll the dice. And if you fail, roll it again.
Fortune favours the brave but it also favours the smart and the bold.
Millionaires are a dime a dozen these days, go join the party!
Before finishing, I would like to explain my own way of analysing opportunities and this is an equation that can work in any market. I believe that opportunities are uncovered within any market when all inputs are held constant, aside from one. And if one major input condition is changed considerably, opportunities present.
This is how I currently see entrepreneurship.
The concept is not new and if successful, an entrepreneur has always been well financially rewarded. What I suppose above though, id due to one major input into the entrepreneurship equation changing, the game itself has changed and to some degree, can be arbitraged.
It’s no harder or easier to start a business today than it was one hundred years ago (you could actually quite easily argue that it is easier). There is no more or less access to skilled staff and machinery and I haven’t been able to find any valid evidence to suggest there is increased competitiveness in the area.
Those are the major inputs into starting your own business and bar the inflow of money, all other inputs have not considerably changed. But the inflow of money changes the game and statistically, changes your chances of funding, and therefore success.
A few facts I want you to think on, before running out to become the next #entrepeneunicorn
- It’s hard
- It’s really, really, really hard
- It’s time consuming
- You’ll see less of your family
- You’ll sleep less (probably A LOT less)
But that said, the rewards (not speaking financially here) are significant. And the odds are stacked more in your favour than ever.
Go do your thing and share that beautiful brain with the world.
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