April 14, 2014 by Liberty
First of all, the title of this article brings up a important point. People define hero in a very funny way these days. It seems like virtually everyone employed by government is blessed with this label. Some people that just have bad jobs are heroes. Sure, under the guise of the government story, I can understand why people would be fooled into thinking cops are always heroes. In fact, many cops probably are. Same goes with firefighters but the definition has to stretch a bit with each new addition.
Today though, it goes even farther. Teachers are heroes. Mailmen are heroes. Utility line worked (non-government) are heroes. By the definition people use today, virtually anyone can be considered a hero. While that might seem peachy to the new heroes, I find it a bit insulting to the people actually risking themselves on a regular basis.
I wouldn’t go calling a teacher a hero in front of a cop that threw himself in front of a bullet going towards a bystander. It’s just insulting.
I’m going to be making a case that entrepreneurs risk themselves daily for the good of society. For that reason, they are legitimate heroes. No, they’re not teacher-level heroes. They actually fit with men and women pulling people out of burning homes. Certainly, the stresses they face are different but the dangers are very very real.
The stresses an entrepreneur faces add up to benefits for society as a whole, win or lose.
Without people willing to risk their own security as entrepreneurs the markets wouldn’t work. Prices would be higher. People would go without work. The world would be a noticeably worse place.
The Dangers Of Entrepreneurship
Starting a business is not a quick road to riches. It’s a painful and virtually hopeless pursuit for most entrepreneurs. Around 70% of businesses that open end up failing within the first decade. The loss of the business is usually not the biggest problem though. Most businesses require capital. That capital has to come from somewhere.
If the business owner invests his or her own money then they’re putting major amounts of their own money at serious risk. In fact, they’re probably even putting money they didn’t plan on investing at risk. (If your business needs more investment, it’s hard to let it collapse when you can just increase your investment.) If the business owner takes out loans for their business, they need to pay that money off somehow. The business can’t keep paying after it fails. Usually, small business owners end up on the hook.
Despite that, all the money in the world (expression not literally) doesn’t add up to the investment most entrepreneurs have to put into their business. Small business owners regularly spend 60+ hours a week on growing their business. They often don’t even make minimum wage for their efforts. They do it in hopes they can build a sustainable business model that might pay off later. 10 years later though, that time investment is usually wasted.
The amount of energy required to open a business (today in particular,) is ridiculous. In most cases, it’s much safer to just hold a job. These entrepreneurs are risking everything to create a system to provide a service to customers for years to come. In most cases, it doesn’t work out.
The Motives And Effect
The motives of most entrepreneurs are not blissfully pure (just like any other hero on the list.) Most people start businesses to make a better life for themselves. Some people want a better lifestyle. Some want more money. Others just want money while they sleep. Of course, many also want to provide something awesome and new to the world too.
When you ask a cop why he or she does what he or she does, they’re taught to project a selfless attitude. The cop will talk about how they like to risk themselves to help people. Despite that, they’re trained to put themselves first. (I’m going to avoid discussing my problems with cops believing this because it’s beyond my point but if you read me before, you probably know it.) With that on the table, would they still go to work every morning, if they didn’t get paid?
Some would. Assuming they’re doing good work, that would be commendable. That being said, why don’t all big cities run on volunteer police departments to save money? Of course, not that many people would do it without the money.
Just like any other industry, finances matter for entrepreneurs. The only difference is that society discourages them from talking about the benefits of business on society.
With the motives out of the picture, what is the real effect that entrepreneurs have on society?
Capitalism thrives on competition. Outside of regulatory messes like America today, small businesses are one of the most powerful kinds of businesses. While large corporations will probably survive, small businesses can change quickly, take risks, focus on providing better service, and force big business to get better.
Small businesses get to steal chunks of the big businesses bottom line through differentiation alone. Sure, you may be able to get the same quality for a cheaper price at a big box store but you can’t get the customer service that you can get from the small business. While the big box store is making pennies a sale (if they’re lucky,) the small business can pull in 50 to 100 times that amount by not getting all that business. Do the customers care? No. They want service more than the extra pennies. That forces big businesses not to treat their customers too bad or everyone would choose better service.
On top of that, small businesses don’t need to worry about pleasing thousands of investors. They just need to please the owners. That allows them to force big business into some very difficult business decisions.
Eventually, most of those small businesses will fail but a few of those businesses are able to compete on a larger scale and provide more and more service to the world. Eventually, they may become the big businesses that provide a major positive impact on society.
First of all, society doesn’t mind an entrepreneur. The only ones that people don’t like are the successful ones. As soon as they become successful business people they’re often categorized as heartless. So, as long as you’re bad at business and providing a service, society respects you.
Second, people stand by and watch as big businesses buy politicians into creating absurd regulations to attack these entrepreneurs. Regulations are fought for by big business for a reason. They have the money to follow the new regulations. Small businesses are forced into investing into these regulations for survival. That makes the already poorly paying risk of entrepreneurship an even worse investment.
Entrepreneurs are heroes in the free market. They put their own safety on the line to make the world a better place for everyone. Sure, they may not be facing bullets but they’re facing foodless nights and seemingly inevitable failure. They have an old cliché to thank your local (cop, firefighter, etc.) entrepreneur. While I don’t think you have to go that far with any of them, you should probably give them a little bit of respect when you get the chance.
Taking chances like that don’t only benefit the entrepreneur. They benefit everyone. We can’t find the great businesses without first finding out what doesn’t work. The thousands of failures out there help us define what really matters.
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