Thomas Ellsworth Walker - A 30 Years War

Copyright 2011 by Thomas Ellsworth Walker

Publish Green

212 3 Ave North, Suite 290

Minneapolis, MN 55401

612.455.2293

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the written prior permission of the author.

ISBN: 978-1-937003-88-3

This book has several goals, most notably to raise awareness of a deep decline, one that we cannot afford, one that is more than unfortunate, one that lack of appreciation will continue to feedthe decline of the entrepreneur.

You will soon come to understand that the uncertainty of a true entrepreneurs opinion is markedly superior in reducing risk, achieving financial objectives, and sustaining satisfaction than that which is managerially derived, supported by the common facts, method, and practices of an industry, and, the idea that taking risk is the greatest means of profit.

That said, there are endless pressures and antagonisms working to move the true entrepreneur away from his or her idea. These forces are caused by conformists, who feel that business done differently than usual is never a good idea. These forces contribute to the decline.

Ive sorted the forces of conformity into the typical phases of a business life cycle, since the forces change with the cycle. The pressures differ at Startup as from Growth, and Success as from Growth.

Throughout the writing, several words remained troublesome in relation to each othermanager, management, entrepreneur, innovation, economics, and economic theory. Entrepreneurs run their firms, which is to manage, and so they are management. There is a constant struggle between seeing management as a tool for the entrepreneur and seeing it as a constraint. You will see this in my writing, and perhaps, keep these troublesome terms in mind while reading; see if youre able to resolve the struggles as I attempted to throughout the writing of this book. Some struggles are irresolvable.

I wrote this book by keeping four specific people in mind. Each was a true entrepreneur. Each was in a different industry. And each faced one or more of the pressures and antagonisms the true entrepreneur must overcome if he is to remain true to his idea. Three of them by now have lost that battle, though not necessarily the financial success they gained by their courage and inventiveness. One of them remains a true entrepreneur. He is now in the Growth stage. He is also beginning to feel the pressures that come with Success.

These four people are representative of many, many others. We have become a nation of copiers. We copy the management practices of large companies. We copy the actions of others. These four did not. They are, as it is said, unreasonable. Lacking educational proof and the other easily comely aspects of the successful and the likely-to-be-successful, they held to what they believed. They were in the best traditions of freedom and progress. And they suffered for it. Not heroic, they did only what they saw according to who they were.

Today, everyone who owns a business is called an entrepreneur. If the word has any classic meaning it has to be invention or innovation from invention; but most are not, in fact, practitioners of invention or innovation. And that meaning may still be acceptable except that innovation is devoid of useful meaning.

Of perhaps the greatest difficulty in writing this book was resolving a question I had more or less avoided for decades: Accepting the capital, specialized skills, market reach, and power of large companies, are small companies just something left over from a pre-industrial age? I spent part of one chapter with an abbreviated view and comparison of small and large companies. Economic theory, which is really not theory but reasoning, also provides insight. The basis of existence for large companies is efficiency of costs; for small, limited to the true entrepreneur, is efficiency of innovation. It was this exploration of large companies and economic theory from which I concluded that small companies are not leftovers. They are the dominant place of innovation if not invention, and they are the place to develop, test, and prove so that large companies by acquisition can continue to achieve their efficiencies of cost.

I have long been told that small businesses are under-capitalized and poorly managed. Or, more precisely, that they fail for one of those reasons. It happens more often that the failure is for other reasons. Shockingly, one reason is the very adoption of management practices, which are at the expense of place. Accounting and accountants bear much responsibility, though I am sure this is the not the intention. Running a business by the numbers is en vogue; someday that fashion will pass. But management or accountings recent crisis reveals both are blind and blinding when it matters most. This is because many failures are failures of economic foresight, that is, bad timing. It is not enough to say bad timing is doing what everybody else does, but that is a fair place to start.

Finally, it would help if we begin to restore our respect for each other. The supposition that people start businesses because no one else will hire them is not helpful. Other kinds of things charged as failures of reasons, in practice are not. For example, startup is a mad, messy scramble to survive. Those things marked as failures and mistakes in this stage are merely sensations, if not manifestations of expert arrogance. All babies are born messy, screaming, and incoherentthe only question is whether they are alive. The rest will pass. To push it to pass too soon is a huge mistake.

Maybe, if we come to understand and appreciate all of this, then we can restore each other as individuals worthy of respect for the benefit of the doubt, if the not the humility of our own convictions. Then we can, indeed, remain an inspiration to the world for the real solutions to problems. After all, business is a made-up term from busy ness. So we get busy with what is much better.

Chapter one, Credibility, covers the role of accounting. The coin of the realm for the entrepreneur is credibility. Accounting does not establish it. It can destroy it. Its role is to track the movement of money and present reports the entrepreneur can speak to without help.

Chapter two, Raison detre, is a broad, shallow sweep of risk, entrepreneurialism, pessimism, societal obstacles, and generational differences. In it I examine the long-standing, widely accepted myth about small business failures. A reasonable summary is: all progress depends on being unreasonable in the sense that it lacks the imprimatur of experts. The Wright brothers were only experts after they flew, but merely unreasonable men before Kitty Hawk.

Chapter three, Crisis, is about what ends the startup phase. Arriving at profitability and positive cash flow, somebody wants out. It will take money or something else. This chapter is about the something else. There are three main risks for the entrepreneur in this crisis. Having survived so much already, most have the feeling they can handle anything. The cause of the crisis is misunderstood because of a time delay between the cause and the crisis. Lastly, crisis usually arrives from a breach of promise (the entrepreneurs idea). This breach occurs naturally due to the nature of survival. The risk is a failure to return to the founding idea. This chapter explores the four phases of crisis: intimidation, preparation, presentation, and negotiation.