Sunday, May 26, 2013

The Entrepreneurship Industry: Another annoying down side of US capitalism

There has been an explosion of entrepreneurship programs in the US.  It looks like everyone has some sort of "start-up" program, incubator or resource web-site. It's like everyone is trying to hit the lotto and a who industry has developed to sell people tickets and in some cases even "lucky" numbers.

Here are some examples:

Google has site focused on Entrepreneurship called Google Entrepreneur.
So does the City College of New York but on Facebook. Here is the link. 
There are also website that let you create business model like LeanLaunchLab.Com.

But you have to ask how much real, new value add are they creating and how much are they just stealing from one another. All this talk about entrepreneurship is great but it seems like a lot of "fake" PR with lots of smiling young people talking about "doing" good or "risking it all."

The truth is most businesses fail.

Another difficult truth is that the US economy is really a zero-sum game.  In order for you to get rich, someone else has be lose money or income. Despite what people are sold, money does not come from thin air.  It comes out of other peoples pockets.

And large businesses, especially retail, incredibly efficent at removing that money from other peoples pockets. Big box retailing has grown faster than the GDP for the past 30 years.  They have put department stores and mom and pop retailers out of business.  The competition is strong and vigorous   While average customer incomes are flat for the past 30 years.

So, lets be honest, in order for some business to succeed others must fail.

The real key in any business including small start-ups is a defensible niche; a natural or created monopoly that allows the owner to enjoy surplus profits. That can be the corner delicatessen  the local auto-repair business, a mid level medical instrument manufacturer or (Ed. Note: It was really hard coming up with a mid-level factory example, they all have been pretty much wiped out)

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