Buying Your Way into Entrepreneurship

Buying Your Way into Entrepreneurship

Many aspiring leaders take conventional routes to the top in business: They get on a C-suite track at a large company, climb the ladder to partnership at a consulting or investment firm, or launch their own start-up. But there is another career path that has become increasingly popular in recent years: buying and running an existing operation—or what we call acquisition entrepreneurship. A record number of such transactions occurred in the United States during the first three quarters of 2016, according to BizBuySell, an online small-business marketplace.

Every year, we teach a course at Harvard Business School on this kind of entrepreneurship, which dozens of students—and others—pursue. Among them are Tony Bautista, who did stints in investment management and business development before taking the helm of Fail Safe Testing, a company that tests equipment for local fire departments; Greg Ambrosia, who served as a U.S. Army officer before acquiring and leading City Wide Building Services, a commercial property window-cleaning specialist in the Dallas/Fort Worth area; and Jennifer Braus, an engineer-turned-MBA who now owns and runs Systems Design West, which manages billing for ambulances and other emergency service providers near Seattle. (Full disclosure: We are investors in and directors of all three companies.) Other students of ours have gone into home health care, exotic travel, musical instrument rental, specialized software, and manufacturing.

Whether acquisition entrepreneurship is right for you depends on your preferences and temperament. But most of the individuals we’ve taught, advised, and tracked have found it to be personally, professionally, and financially rewarding.

Perhaps the biggest benefit is instant impact. Instead of navigating a corporate bureaucracy or toiling away on business plans and prototypes, you’re immediately in charge of a living, breathing organization and making decisions that have consequence. That was appealing to Braus. “I’m someone who craves responsibility,” she says, “so I didn’t really like being a worker bee. I saw where I wanted to go in terms of leadership, and now I’m there.”

Another plus is having a more flexible lifestyle than might be possible at a fledgling start-up or a large firm. When you’re running a stable operation, you rarely need to work nights and weekends, and as the boss, you set the rules: If you want to leave early for a family or community commitment, you can.

But small-business acquisition and management is not without its challenges. That’s why you need to make sure you’re suited to it and then approach your search, deal negotiation, and transition to leadership in a systematic way. Through our research on multiple companies and their buyers, we’ve developed a road map for tackling all of these steps.


To succeed at acquisition entrepreneurship, you of course need basic management skills: an understanding of finance, a knack for leading and managing others, and an aptitude for decision making. But you need other attributes, too.

Confidence and persuasive ability are key; the job requires you to reach out and project optimism to people you don’t know—business brokers, investors, sellers, and the employees and customers you inherit. City Wide’s Ambrosia says he felt instantly comfortable with that part of the role, thanks to his military experience, which involved leading different groups of soldiers (including many who were older than he was) on combat missions in Afghanistan.

Acquisition entrepreneurship means instant impact. You’re immediately in charge.

Persistence—what Bautista describes as “thick skin and grit”—is crucial, too. When seeking a business to buy, you might find a great prospect, reach agreement with the owner on price and terms, and work for months to close the deal—only to have it fall apart at the last minute. You need the fortitude to bounce back. And once you’re an owner, it will be up to you to drive the company forward and ensure that it recovers from setbacks.

Additionally, and perhaps most importantly, you should be an enthusiastic learner. Throughout your search, you’ll have to quickly get up to speed on unfamiliar industries, sectors, and companies. When you find an interesting target, you’ll need to become knowledgeable about the business. And as an owner and CEO, you must be able to develop expertise across functional areas, stay curious, and recognize that you can and should grow into the job. “Nothing can prepare you for owning a company other than owning a company,” Bautista comments. “No day is boring.”

It’s also important to reflect on the trade-offs that all entrepreneurs make in choosing to go out on their own: Do you value what you’ll gain more than what you’ll lose? For example, you’ll have professional independence and the ability to make unilateral decisions, but that comes with a great deal more pressure. You’ll be giving up the comfort of working in a larger, more structured organization where you have greater access to capital, a better-known brand in which to take pride, and the support of peers, bosses, and functional groups such as HR and R&D. Yes, your pay will be directly linked to your performance, with every positive move you and your employees make benefiting you and your investors. But there is a negative flip side: Inevitable mistakes and down cycles will hit you harder than they would if you were a cog in a corporate machine.


“You and the company become one, so you take both the good and the bad,” Bautista says. Ambrosia describes the job as “exhilarating” but also “stressful”—sometimes even more so than his time in the army. Leading troops, he alternated between periods of extreme challenge and rest, he explains. But in his role as CEO, that “feeling of responsibility to get it right”—for customers, employees, and investors—“doesn’t stop.”

So carefully consider what you’re in for. If, after all this thinking, you determine that you have the skills and the appetite to become a small-business owner, you’re ready to begin your search.


The Search

Although would-be entrepreneurs often worry about making mistakes once they take over a business, it’s actually much earlier that many falter. According to research by a team at Stanford University, about a quarter of acquisition searches end without a successful purchase. In other cases, people let emotion or a desire for expediency lead them into buying bad businesses (or the wrong ones for them) or overpaying. We’ve focused on avoiding these outcomes in our work advising former students and in making investments ourselves. Here’s what we suggest.

Whether you’re working alone or with a partner, you need to commit to searching full-time for six months to two years. This may sound extreme, but an extended period is necessary to raise funds from investors, identify potential acquisition prospects, thoroughly vet the best of them, negotiate with sellers, and, eventually, find one that agrees to sell at a reasonable price. Then it will take at least three more months to perform due diligence and complete the transaction.

Establishing a search fund is the most popular way to raise enough capital for out-of-pocket expenses and your cost of living during this time. The process involves approaching potential backers (wealthy individuals in your network or those in the small-business-acquisition community) and offering them a first look at investing in an eventual acquisition at favorable terms. Bautista, Ambrosia, and Braus all went about their searches this way. Their aim was to acquire not just money but also advisers who could help them through the deal process, since none of them had M&A experience.

An alternative is to self-finance. To make this realistic, you should try to keep expenses down—one of our students spent only $25,000 over his 14-month search, in part because he was able to live with his in-laws—and limit the number of prospects you consider. The advantage of this route is that you can strike a better deal with investors when you raise money at the acquisition stage.

The search begins by sourcing and filtering prospects. We recommend focusing on companies with annual revenues of $5 million to $15 million and annual cash flows of $750,000 to $3 million. In this range, there are high-quality small businesses available for prices low enough that you and your investors can earn an excellent return even if the business grows only slowly. Forget rapidly evolving start-ups and risky turnaround opportunities; you should look for steady (often unglamorous) enterprises that are profitable year after year and likely to remain so—what we call enduringly profitable. While these are strong businesses, you can still add a lot of value by applying best management practices that the current owners might not know about or have the energy to pursue.

In a typical search you’ll encounter acquisition prospects every day—through referrals from your network or brokers or through your own direct outreach to business owners. These prospects might total in the thousands over a year or two, so you will need to dismiss most of them very quickly. We recommend that you evaluate each using five criteria:

  • Is it profitable?
  • Is it an established business?
  • Are its revenues and cash flows in the desired range?
  • Do you have the skills to manage it?
  • Does it suit your lifestyle (location, hours, need for travel, and so on)?

If you can answer yes to all of the above, ask two additional questions that take a bit more time to investigate:

  • How enduringly profitable is the business?
  • Is the owner serious about selling it?

Markers of enduring profitability include a steady, loyal customer base; a strong reputation; deep integration with customers’ systems; large switching costs; and few or no competitors. Examine the financials carefully and look for strong margins and low customer churn. (For more details, see our HBR Guide to Buying a Small Business.)


Over a 12-month period, Ambrosia considered approximately 7,500 businesses, from a slaughterhouse to a confectionary company. He indicated interest in 26 and received favorable responses from two before he entered into exclusive negotiations with the seller from whom he eventually purchased his company. Bautista looked at hundreds of prospects (often pestering brokers for details on promising ones), created a short list of 15, and visited five or six before settling on his target. As for Braus, she acknowledges that she “came across a lot of garbage” before finding one candidate that “stood out.”

If a business owner has engaged a broker, it’s a good sign that he or she is ready to sell. But it’s not uncommon for people to back out at the last minute. To counter this risk, spend time with potential sellers as early as possible to investigate their motives. Are they retiring? Have they had a life change that requires them to give up the business? Are they just testing the waters? Consider their expectations: What price do they want? Are they just looking to turn a big profit—or perhaps get rid of a bad apple? And be sure that you’ve talked to all the owners; someone else with a share may be less interested in selling than the person with whom you’ve been dealing. Even as you dig more deeply into businesses that make it past your initial filters, you should continue to review new prospects in case your desired deal falls through.

Negotiating a Deal

You may have spent only a day or so on the prospect thus far, but if it’s still of interest, you should now devote substantially more time to preliminary due diligence: a focused period of rapid learning in preparation for making an offer. This is when you’ll test the seller’s initial claims and verify the information that has made the business appealing to you. You believe the company has many devoted customers because it reported a low churn rate—but are those customer businesses themselves healthy? You think cash flows are steady—but what did the books look like during the last recession? And how sound are the company’s current business practices (regarding quality control, billing, refunds, pay, and benefits)? You’re looking for any reason that you might not want to acquire this business.

Use the company’s historical financial data to project future earnings and your return on investment. These calculations will allow you to value the firm as accurately as possible—and thus to arrive at an offer price, typically between three and five times the current EBITDA. Visit banks and approach your investor network to raise money for the acquisition. You should be prepared to provide information about the business and its industry, details on the due diligence that you’ve done, your financial projections, and the deal terms that you are proposing.

Especially if you’re competing against other interested parties, this is also the time to persuade the seller that you are the right buyer. Bautista was up against private equity funds willing to spend more money on Fail Safe than he and his investors were, but he won out by emphasizing that he really cared about the business and would continue the owner’s legacy.

If your offer is accepted—or accepted after negotiations—you’ll enter a period of confirmatory due diligence in which the company’s records will be fully open to you. You will typically have around 90 days to work with your accountant and attorney to check for any inconsistencies and red flags. (It’s a good idea to wait until this stage before bringing in these outside professionals so that you don’t have to pay them should the deal fail, as is more likely earlier in the process.) This can be an extremely nerve-racking time for both the buyer and the seller, so it’s important to be patient and calm.

“I was always trying to communicate that progress was being made,” Ambrosia recalls. Braus’s seller threatened to back out when the company signed a big new client 10 days before their deal was scheduled to close, but she and her investors pulled the seller back by renegotiating some of the terms. “Living with the uncertainty during that period was a difficult thing to do,” she says, “but we weren’t willing to lose the business over it.”

Transitioning into Leadership

After closing the sale, you should focus on four tasks: introducing yourself to all your managers and employees, meeting with external stakeholders, communicating the transition plan to everyone, and taking control of your cash flow.

The most common trouble for small firms under new owners is running out of cash.

As you meet your new colleagues, reassure them that they won’t see any immediate changes. Instead, share your overarching goals for the company—for example, excellent customer service, commitment to quality, a satisfying work environment—and encourage people to stay focused on their work. Also give them an opportunity to ask you questions, but don’t feel as if you should have definitive answers for everything: “I want to learn more about that issue before I make a decision” is a fine response.

On the day Ambrosia announced his purchase of City Wide, he stood up in front of his 50 or so employees and delivered a three-part message: He’d bought the business because it was already a great one, everyone’s job was secure, and he looked forward to learning from them. He then met with his managers, laying out his expectations for them (mainly codifying existing responsibilities) and telling them what to expect from him. He also made sure to “lead from the front” in his first few weeks—rolling up his sleeves to clean windows with both day and night crews.

You’ll need to take the same proactive approach with customers, suppliers, and your new community. All these stakeholders will want to meet the new boss, and many will offer useful ideas about how to improve your offerings. Two other acquisition entrepreneurs we know made a point of visiting every major customer as soon as they could; they told us that all their new product and service ideas in the subsequent months came out of those early meetings.

If you have a management transition arrangement with the former owner, be clear with both employees and customers about how it will work. Explain how decisions are now going to be made and whom to approach with certain types of questions or requests.

Along with relationships, cash flow should be a top priority. The most common trouble for small firms under new owners is running out of cash; after all, they are likely to have acquisition debt to service. So set up a process whereby you approve all payments before they go out, and review your accounts-receivable balances at least weekly. You should also implement a 90-day rolling cash-flow forecast.

The weeks after closing will be exciting, busy, and filled with learning. You’ll be pulled in more directions than even an extended business day can accommodate. “It’s a shock to everyone,” Bautista explains. “You’re afraid all your employees are going to quit, and they’re all worried you’re going to fire them. And you’re responsible for everything right away. I remember thinking ‘I’m a 28-year-old now running a 50-person company.’”

Ambrosia and Braus also admit to unexpected early challenges. In the first few months of their tenures, both senior and junior employees left, voluntarily and not, in part because the new owners were bringing more discipline and accountability to their companies. Bautista says he had to drop a few longtime customers that were not actually profitable, and the company experienced a payroll snafu that upset both him and his staff.

But these types of growing pains are inevitable. If you have approached the acquisition process thoughtfully and begun to apply good management, things will soon settle down. And then you’ll be able to focus on growing your small business into a successful medium-sized—or even large—one.

A version of this article appeared in the January–February 2017 issue (pp.149–153) of Harvard Business Review.

Richard S. Ruback is a professor at Harvard Business School and a coauthor with Royce Yudkoff of the HBR Guide to Buying a Small Business (Harvard Business Review Press, 2017).

Royce Yudkoff is a professor at Harvard Business School and a coauthor with Richard S. Ruback of the HBR Guide to Buying a Small Business (Harvard Business Review Press, 2017).


What regulation crowdfunding in the JOBS Act means to entrepreneurs and startups

What regulation crowdfunding in the JOBS Act means to entrepreneurs and startups

The JOBS Act was signed into law by President Obama in 2012, allowing companies to acquire funding through online portals from non-accredited investors, which roughly accounts for 97 percent of the population in the United States. On May 16, 2016, Title III of the JOBS Act, also known as regulation crowdfunding, or equity crowdfunding, was the last section to be implemented by the SEC.

With such a large pool of potential investors looking to enter the market, it would seem that the crowdfunding and investment communities would be extremely welcoming of Title III — but it seems like the exact opposite is happening. This could be because not enough is understood about this type of crowdfunding. As a founder who has tried all types of crowdfunding, I’ve seen significant benefits to all platforms, including equity crowdfunding.

How is equity crowdfunding similar to or different from other crowdfunding?

Equity crowdfunding shares similarities with Kickstarter campaigns in terms of how a company must spread their message to potential investors about their products in order to successfully raise enough funding. However, the main difference between equity crowdfunding, rewards-based crowdfunding and donation-based crowdfunding is the investor’s end goal in rewards-based crowdfunding, such as Kickstarter and Indiegogo. Rewards-based fundraising is aimed at enticing investors based on the benefits they would receive in relation to the amount they contribute.

As a founder, I’ve used this type of crowdfunding, and have helped others do so with great results. It’s been ideal for taking a prototype to the next level because those investing are excited about the concept they see and are incentivized to invest because they will most likely be one of the first to receive the new product. I’ve experienced wildly successful rewards-based crowdfunding; it’s been the reason our company could move to the next level in our development.

Donation-based crowdfunding seeks funding that comes as goodwill from the community. This method is geared toward charitable contributions rather than capital acquisition, which is the aim of equity crowdfunding. When investing through equity crowdfunding, an investor receives shares in the company instead of a final product, which tends to yield a greater benefit for the investor long-term. The way the shares are structured allows the founders to retain control of their company even after selling a portion of their equity to multiple investors across the country.

Of benefit or concern?

While equity crowdfunding was developed with the intention of providing significant benefits, many have professed some major concerns related to how equity crowdfunding might change the funding landscape. The major concerns include the numerous intimidating filing requirements that entrepreneurs must fill out for the SEC, the need for constant reporting to the SEC, the requirement that company financials be made available to investors and the review or audit of financials by an accountant based on how much you have raised.

However, others believe these requirements are justified. Manny Fernandez, CEO and co-founder of Dreamfunded and the 2014 Equity Crowdfunding Leadership Award recipient, notes, “When a company is just starting, transparency in terms of financials is irrelevant because there is nothing to hide from potential investors. This is one of the various ways in which established investors are trying to maintain control of entrepreneurs and prevent them from finding alternate funding opportunities apart from the traditional methods. It makes good business sense to all involved.”

Do your research, understand what is involved in terms of benefits and risks and determine how you could use the funds wisely.

Another concern has been the liability companies might face when an investment venture, failing to generate any returns or growth, shuts down. A decision such as this made by founders may motivate some jilted investors to seek compensation for their lost investment. However, when an entrepreneur fills out a Form C, full disclosure is made to potential investors about the risks, which are associated with investing in the company.

It is highly unlikely that any disgruntled investor would be able to win any lawsuit seeking reparations as long as general risks involved in their investment are disclosed to potential investors. Also, investment limitations based on income level have been established by FINRA and the SEC to help investors not risk their entire pension or life savings by making one bad investment.

Another issue has been the fact that because there tend to be smaller investment amounts with equity crowdfunding, the cost of using this type of crowdfunding platform might outweigh the benefits of it, as smaller individual investment amounts may raise the amount of investors on the cap table. In addition, the fee charged by funding portals reduces the total amount raised. However, although the amount per investor is smaller, there is also a larger amount of people who are helping you watch the business grow.

For me, as an entrepreneur, I’ve spent a considerable amount of time and money looking for potential investors for my digital wallet startup who are not always readily available, in the local area or willing to invest in the idea that they are pitched. Instead, with equity crowdfunding, I pay a fee and then get access to more investors, which has saved me considerable time, money and effort, as well as enables me to get started on building out my company sooner.

One of the greatest benefits with equity crowdfunding is that I can set my own terms for the shares of the company, providing me with more autonomy and freedom. The shares sold through equity crowdfunding are limited to only one class of securities, so there are no voting rights. Instead, the investor is simply investing in the company’s profitability and success. This process has helped me maintain control and minimize any potential threat of investors commanding the direction of the company during the early stage of fundraising.

Some entrepreneurs have expressed their dislike of the fact that there is a fundraising limit of a million dollars over a 12-month period. However, it’s important to remember that this type of funding is typically only for the first round, and it can be used again for future stages of growth or other types of funding can be implemented at that point. Also, some of my companies started on much less funding and I was able to leverage more funding through equity crowdfunding at a later stage when I really needed a larger amount.

Proposed changes to Equity Crowdfunding Act

In March of this year, before Title III was implemented, the Fix Crowdfunding Act bill was introduced into Congress to address and improve upon some of the shortcomings of the current legislation. The first proposal is to increase the annual fundraising limit from $1 million to $5 million, which allows entrepreneurs who require larger amounts of capital in the seed round to use equity crowdfunding as a potential source of funding.
The second proposal is the “test the waters” provision, which allows entrepreneurs to gauge the interest of potential investors through an online portal before they take the time, effort and money to extend an initial offering. The third proposal is to allow for the use of SPVs (special purpose vehicles), which would help entrepreneurs keep their cap tables organized because the investors of low-dollar amounts are grouped together into one large fund that appears on the cap table as one large entity. These proposed fixes are now up to the Senate to decide, and it will take at least a year for it to be passed.

A guide to using equity crowdfunding

In the meantime, I highly recommend considering equity crowdfunding, as it has offered an additional avenue for funding without having to contend with investors who want to take over and run my business.

As an entrepreneur, I know that risk is just part of the game. If I always played it safe, I wouldn’t be here today, with a rapidly growing online invoicing and payments business. The risk involved with equity crowdfunding is minimal. What I always recommend before using any kind of funding vehicle is to do your research, understand what is involved in terms of benefits and risks and determine how you could use the funds wisely at a certain stage in your startup’s development.

Today’s equity crowdfunding marketplace also has credible platforms that are driving greater success for those using this funding source and connecting more entrepreneurs quickly to the investors they need to become successful.

What regulation crowdfunding in the JOBS Act means to entrepreneurs and startups

Investors Really Care About 3 Things, And They Aren’t What You Think

Investors Really Care About 3 Things, And They Aren't What You Think

Investors Really Care About 3 Things, And They Aren’t What You Think

There’s a common misconception among entrepreneurs that investors care about flashy technology, early growth, or fear of missing out. Each of those things plays a role in their decision-making process, of course, but they’re not the most important things investors look for. Knowing what really matters can be the difference between a successful entrepreneur/investor partnership and utter disaster.

The ability to balance strategy and execution

Entrepreneurs usually end up falling into one of two categories: big-picture “strategy people” or tactically-focused “execution people.” Successful CEOs, however, possess the ability to balance both skill sets. That’s why founders are so often replaced by seasoned leaders once their company takes off.

Good investors realize that strategy and execution must remain in balance for a company to succeed. As a result, they’re going to look for a clear path forward toward a state of balance.

There are two ways to accomplish this. First, they look for founders who possess enough self-awareness to know their own weaknesses. These founders are the ones who can either grow into the executive role or get out of the way. The second option is to seek out the rare founder who already possesses the ability to think big and still get things done.

A hungry team

In a startup, there’s no room for complacency. Every team member, from the founder all the way down to the newest intern has to show a hunger for success. Anyone who treats their role in young company as a typical nine to five job is destine to fail.

Investors look for this culture of ambition when deciding who to support with their time and money. Positive signals include team members who have a demonstrable passion for the business, consistently go above and beyond the call of duty, and always push themselves to their limit.

Every business will encounter roadblocks and challenges while navigating the market. If a team is aligned, motivated, and hungry, almost every one of these difficulties can be overcome. Hungry teams are productive teams, and investors know it.

Integrity above all else

There are few things more uncomfortable for entrepreneurs than the investor due diligence process. Before an investor jumps out of the proverbial airplane with an entrepreneur, they’re going to want to know that they have a working parachute. That’s what the due diligence process is all about. Investors dive into the weeds to understand the company’s past, present, and future performance before making a decision.

There can be a very strong temptation on behalf of entrepreneurs to try and sugarcoat the data that is provided to investors. After all, business is almost entirely personal for founders, and the company’s failures are perceived as personal failures. However, entrepreneurs must learn that investors care about integrity more than past results.

Every company has challenges, failures, and skeletons in the closet. However, these issues only become a problem when they’re not disclosed. Investors want entrepreneurs who demonstrate integrity and disclose issues early on in the due diligence process. It seems counter-intuitive, but proactively addressing your weaknesses can go a long way with investors.

Good investors are going to do their homework before investing. Entrepreneurs must recognize this and learn to demonstrate patience, integrity, and grace throughout the entire process. Because at the end of the day, investors care more about these fundamental traits than anything else.

Investors Really Care About 3 Things, And They Aren’t What You Think

Want to Be Successful? Be the Best at What You Do

Want to Be Successful? Be the Best at What You Do

Want to Be Successful? Be the Best at What You Do

The problem I see with many if not most aspiring entrepreneurs is they’re forcing themselves into a career they’re not cut out for. Why do they do it? They’re lured by all the hype into doing what they think they’re supposed to do. So they follow the crowd and march blindly into the abyss, like good little digital drones.

That’s why so many of you feel lost and uninspired. That’s why so many of you are constantly searching for answers, hungry for guidance, and fishing around for books and blogs to help motivate you to get up off your butts and get going. Simply put, you’re in the wrong line of work.

Let me tell you a story that I think will help you find the right line of work.

When I discovered the existence of high-tech startups, I instantly knew that was the life for me. It was as if I’d been lost for eons and finally found my way out of a vast jungle and into the light. Suddenly, the path ahead was clear. I knew what I had to do. And I did it right. I went back to school and got an advanced degree in engineering.

Related: The Only Good Reason to Start a Business in 2016

Even then, it would be many years – more than a decade, actually – before I achieved any kind of success in a high-tech startup. And while I spent the next decade as a senior executive in a number of successful companies, big and small, my only stint as a startup CEO ended in bankruptcy when the dot-com bubble burst.

But here’s the thing. I have no regrets, and I’ll tell you why. I was true to myself. And while I had the opportunity to run several startups before and since, I never did. Why? None of those situations was right for me. And had I attempted them, I would have failed, and not in a good way.

Instead of pushing myself to do something I was never meant to do, I climbed the corporate ladder and rode the coattails of some brilliant founders and CEOs who were cut out for that sort of thing. Honestly, I don’t get all the hype about being a founder or a CEO. Turns out, vice president’s a pretty sweet gig, too. And the payoff was incredible.

I loved my work, did quite well for many years, and now I run a boutique management consulting firm and write. It’s been a great ride and a good life, but only because I stayed true to myself and didn’t follow what others said I should do. Instead, I did what was right for me. I got the right education, did the work, got tons of experience, built a rolodex of who’s who in the tech industry, and the rest, as they say, is history.

Now let’s talk about you. I hear from people striving to become entrepreneurs every day. To be blunt, most of them haven’t a clue about what they’re doing. They’re going to waste years spinning their wheels and end up back where they started with nothing to show for it. All because they read some articles, blog posts, or books written by greedy opportunists, shysters, and content generators who also don’t have a clue.

Hard to believe, but that’s exactly what millions of people are doing. Right now. I’ve tried to help a handful over the years – the ones I thought actually had a chance – and you know what? Those who made it are those who had what it takes. Those who were cut out for it. Those who were passionate about their work. Those who were committed to achieving great things. The vast majority were not. And they all washed out.

Related: 10 Toxic Behaviors to Leave Behind in 2015

Most had an idea and thought that was more important than anything. Turns out that ideas are the least important thing. Everyone has ideas. Everyone. People who will never amount to anything have ideas. Every single one of them.

You want to know what the most important thing is? People who are cut out to be real entrepreneurs are doers. They don’t need to be motivated. They don’t need to be inspired. Once they find that one thing they love doing – that one thing they’re better at than anyone – they become unstoppable. They work like their hair is on fire. And they never stop working. Their work is their life.

And you know what? I had all those qualities. Still, I wasn’t cut out to run the show. There’s so much more to entrepreneurship than that. Don’t get me wrong. You can scrape by without those qualities. You can be a solopreneur with a bunch of gigs. You can maybe run a small business. But you’re not going to be the best at something like Gates, Jobs, or Zuckerberg.

Maybe it’s just me, but I always wanted to be the best at what I did. For me, that’s always been the litmus test. That, to me, is what matters most. And since I couldn’t be the best at being an entrepreneur, I chose not to do it. And wouldn’t you know it, that turned out to be the right path. That’s how I became successful.

If you think you can be the best at something, that’s what you should do. That’s what will make you successful. Once you find it, God speed.

Related: The 10 Worst Entrepreneurs of 2015

Want to Be Successful? Be the Best at What You Do

18 Movies Every Entrepreneur Should Watch

movies every entrepreneur should watch

18 Movies Every Entrepreneur Should Watch

Yes, Hollywood may dramatize the plight of the entrepreneur. But sometimes the best way to capture reality is through fiction. Wherever you are in your business venture, you can glean some insight from these 18 provocative and wildly entertaining films:

Subject: Entrepreneurship.

1. is a 2001 documentary film that examines the rise and fall of the real-life startup GovWorks that raised $60 million from Hearst Interactive Media, KKR, the New York Investment Fund, and Sapient. It’s good viewing to better understand the boom and bust of the dotcom period and serves as a cautionary tale on how friendships can easily be threatened by business partnerships.

Topics covered include finance for entrepreneurs, capital raising, growth management, entrepreneurship skills, team building and management skills.

2. Catch Me If You Can.

When you hear Catch Me if You Can, you picture the successful con artist Frank Abagnale (Leonardo DiCaprio) deceptively charming just about anyone with his skill mastery. Based on a true story, Catch me if You Can is a classic film that exemplifies the entrepreneurial journey. It touches upon important themes like creative problem solving, turning something good out of a bad situation, and the good ol’ hustle to reach success.

Topics covered include entrepreneurship skills, creativity and innovation, perseverance, business vision, personal sales techniques and entrepreneurial funding sources.

Lord of War

3. Lord of War.

If you like dark comedy with a good bit of action, Lord of War is a must-watch. This war-crime film chronicles the life of Yuri Orlov (Nicolas Cage), an immigrant from Ukraine who decides his route to success is through illegal gun trade. Morality aside, Yuri’s ambition, tenacity, and ability to tolerate risk demonstrate the very qualities entrepreneurs need to succeed. Plus, if you want to learn more about growth hacking, building customer loyalty, and negotiation techniques, this film delves deeply into these topics. You’ll probably find yourself incorporating some of the lessons in your own business venture.

Topics covered include entrepreneurship skills, emerging markets, creative problem solving, crisis management, negotiation techniques, building customer loyalty, competitive strategies and geopolitics.

Related: The 10 Traits That Define Entrepreneurial Success

Subject: Finance.

Wall Street

4. Wall Street.

Ever find yourself pushed to your limits in the pursuit of power and success? Wall Street unravels this theme through the eyes of Bud Fox (Charlie Sheen), an ambitious stockbroker who navigates the economic rollercoaster of Wall Street, adopting the “greed is good” mantra. This movie is a window into corporate finance, portfolio management, investment law principles and capital markets. More telling is the story of a young, susceptible mind, showing how easy it is to get carried away with the glamorous lifestyle that accompanies wealth. Plus, if you thought The Wolf of Wall Street was a bit too much, this movie is a tamer, more socially-critical version.

Topics covered include corporate finance, portfolio management, capital markets, investment law principles, mergers and acquisitions, company valuations and business ethics.

Rogue Trader

5. Rogue Trader.

This 1999 film is based on a true story of the employee who single handedly brought down the Barings Bank, the largest bank in England. The movie shows how money drives all sorts of maniacal behavior, and serves as a cautionary tale about people who falsely assume that power and money make them indispensable.

Topics covered include derivatives, corporate valuation, financial reporting, capital markets, emerging markets and business ethics.

Subject: Group dynamics and leadership.

12 Angry Men

6. Twelve Angry Men

Possibly my all-time favorite film, Twelve Angry Men is a brilliant courtroom drama that has several layers of insight on leadership, the psychology of group behavior, and conflicting value systems. This is a must watch, and will leave you thinking about the way you make important decisions.

Topics covered include negotiations techniques, persuasion methods, conflict resolution and consensus building.

7. Office Space

Umm…. Yeah…. This American comedy satirizes corporate culture of a 1990s software company, touching upon work relationships and office politics. It’s a good laugh and will definitely get you thinking about leadership, team-building techniques, and career development.

Topics covered include corporate culture, mentoring, career development, leadership, work-life balance, personnel retention, team-building techniques and management of information technology.

Subject: Strategy.

8. The Godfather trilogy.

The Godfather trilogy is possibly the all-time best cinema for entrepreneurs, highlighting why relationships and building networks matter, why helping people lends itself to good business, and why understanding competition is non-negotiable. The movies are intensely entertaining, packed with thrilling and thought provoking scenes that will leave you better prepared to handle your next business challenge.

Topics covered include competitive strategies, key personnel retention, corporate take-overs (friendly and hostile), alliances, mergers and acquisitions, corporate succession and long-term corporate diversification.

9. The Usual Suspects.

The Usual Suspects is a must-watch if you enjoy a good psychological thriller with an ambitious, twist ending. It tells the story of a group of professional criminals who find themselves in the same police line up and decide to team up and pull a lucrative heist. The movie explores themes like leadership consolidation, power and influence, and long-term business strategy, which serve as valuable insight for established and aspiring entrepreneurs.

Topics covered include leadership consolidation, power and influence, long-term business strategy, collaboration, risk-and-reward compensation, entrepreneurial skills, innovation and creativity, consolidation of branding, marketing and operations and logistics planning and execution.

10. Enron: The Smartest Guys in the Room.

This 2005 documentary film is based on the best-selling book of the same name by reporters Bethany McLean and Peter Elkind, which touches upon one of the largest business scandals in American history — the collapse of the Enron Corporation. This is a must watch for a history buff or anyone looking for a thought-provoking and shocking example of modern corporate corruption.

Topics covered include accounting reporting (basic, advanced and innovative), consolidation of reports, off-shore diversification, off-balance sheet accounting, agency problems and business ethics.

Related: The 10 Most Corrupt and Least Corrupt Countries in the World

Subject: Marketing and sales.

11. How To Get Ahead In Advertising.

Even if you’re not looking for advertising advice, How to Get Ahead in Advertisingwill teach you a thing or two about creative problem solving. The film was a flop when first released, but redeemed itself many years later and is touted as a brilliantly entertaining satire of the advertising industry. It will definitely make you think differently about business in the commercial world.

Topics covered include marketing strategy, advertising know-how, market segmentation and branding.

12. The Devil Wears Prada.

The Devil Wears Prada will motivate you to take the plunge and pursue your dream job. It’s a movie that shows how to handle uncomfortable situations, how to navigate worlds that seem unfamiliar, and how hard work pays off eventually.  It’s also an interesting window into the fashion industry and will teach you a thing or two on how to work your way up the corporate ladder.

Topics covered include branding, sales techniques, importance of media and career development.

13. Thank You For Smoking.

Thank You For Smoking is the perfect film for a marketing savvy entrepreneur or someone who wants to learn a few tricks on how to sell just about any product. The film tells the story of tobacco industry lobbyist Nick Naylor who creatively spins arguments to defend the cigarette industry in the most challenging of situations. This is a great watch for those wanting to learn a few things about crisis management, corporate communications, PR and negotiation tactics.

Topics covered include public relations, marketing and advertising campaigns, crisis management, corporate communications and effective negotiations skills.

14. Glengarry Glen Ross.

Glengarry Glen Ross is based on the award-winning play about four real estate salesmen whose jobs are on the line when the corporate office announces that in one week all except the top two men will be fired. This movie is an entertaining showcase of competition and manipulation. If you’re starting a new business, be forewarned: sometimes the road to success is far more sketchy than you think.

Topics covered include sales techniques, customer relationship management, negotiations and deal closings.

Subject: Law.

15. The Merchant of Venice.

The Merchant of Venice is based on Shakespeare’s play and is one of Al Pacino’s greatest films. The story is about Bassino, a young member of the aristocratic class, who turns to a Jewish moneylender Shylock (Al Pacino) for financial help. This is a pleasurable period piece with lessons on business partnerships, risk assessment and mercantile law that still hold value today.

Topics covered include contract negotiations, mercantile law, risk assessment and business law principles.

16. Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb.

Dr. Strangelove is a brilliant Cold War satire, one of those films that will keep you entertained from start to finish. It will get you thinking about leadership and loyalty, and you’re guaranteed to have a good laugh.

Topics covered include international relations, geopolitics, influence and leadership.

Related: Why Every Law School Should Teach Entrepreneurship

Subject: Corporate social responsibility and ethics.

17. Erin Brockovich.

This legal drama is based on the true story of a woman who, against all odds, helps win the largest settlement ever paid in a direct-action lawsuit. The film embodies female empowerment and underscores the importance of sticking to one’s scruples even in the face of obstacles. It touches upon themes like social responsibility, sustainable business models and gender biases in business.

Topics covered include corporate social responsibility and sustainable business models.

18. The Rainmaker.

The Rainmaker is the story of a broke law-school grad who takes on a corrupt insurance company in order to fight for the life of a boy with terminal leukemia. The film is a fantastic portrayal of the underdog, exemplifying the power of determination and social responsibility.

18 Movies Every Entrepreneur Should Watch

30 Clever Ways to Make Money Online

30 Clever Ways to Make Money Online

Who doesn’t want to earn more money? Whether it’s through part-time jobs or freelance work, adding more dollars to your cash flow every month is always nice. But unfortunately, not everyone has the time to pick up another job or do additional work on the side. If that’s the case for you, don’t give up. Instead, turn to the one thing you probably spend a majority of your time on: the internet.

There are dozens of ways to make money online, from selling unwanted items to promoting products on Instagram or Facebook. Click through to discover 30 unique and easy ways you can earn money on online.

1. Get Paid to Take Surveys

Do you enjoy taking surveys? Some companies will pay people to take surveys so that they can gather valuable consumer and user data. It might not be the most interesting way to make a buck, but you can find websites like that offer cash for your opinions.

2. Create a Winning Blog

Writing entertaining, interesting blog posts can generate cash for you through ads, affiliate links and other revenue options. Your blogging success will depend on your writing talent, whether your blog covers a popular subject and the popularity of the links you include (whether backlinks or pay-per-click links, like Google AdWords).

3. Sell Your Stuff on eBay or a Similar Outlet

The dramatic growth and success of eBay has spawned many competitors featuring auctions or online marketplaces for diverse items. Whether you want to clean out your closet and sell your designer clothing online, or develop a high-volume online store, you can make extra money or big dollars on sites such as, and more.

4. Sign Up for Amazon Mechanical Turk

You probably won’t get rich completing typical tasks for the “Turk,” but you can make extra income if you are willing to perform simple tasks for clients.

5. Sell Older Electronics

Do you have a compute, laptop or cellphone you no longer use? These and other tech items, although built with former generation features, often have value to others.

6. List Household Items on Craigslist

Free to join and devoid of listing or selling fees, Craigslist sales can be local or national. From kitchenware to baby furniture to jobs, you can list almost anything for sale on this site.

7. Self-Publish Kindle Digital Books

If you love to write and believe you can write an entertaining fiction or non-fiction book, consider authoring and publishing a digital book through Amazon’s Kindle Direct Publishing platform.

8. Create Niche Websites Featuring Google AdSense Ads

Creating popular niche sites can grab visitors looking for specialized information, and adding Google AdSense advertising links can be a great way to monetize the site.

9. Upload YouTube Videos and Get Paid for Ad Views

You don’t need to invest in expensive video equipment. Just learn how to use your smartphone’s video capability to upload entertaining or informative videos, and opt to have ads play before your videos to get a bit of cash for each video view. YouTube star PewDiePie earned a total of $7.4 million in revenue, according to multiple media reports.

10. Design Useful Apps for Mobile Devices

If you design a wildly popular app (which is harder than it sounds), you might be pleasantly surprised with the income they generate. Offering one or more apps at the iTunes or Android app store gives your creations wide exposure to prospects. And income can be generated by charging for the app, displaying in-app ads, or charging for in-app features and upgrades.

Read More: 9 Highest-Grossing Instagram Accounts

11. Sell Your Time and Talents

The website Fiverr promotes members’ talent in multiple disciplines and connects them to people looking to pay for those skills. For example, if you’re a digital photo editing guru, you might find freelance projects you can complete for compensation.

12. Sell the Use of Your Photos, Videos and Other Media

Some sites allow you to sell your prized photos, video b-roll, original music or illustrations while giving you the option of licensing resale rights for free. This will give you royalties for each use of your photos, videos or music, resulting in longer-term residual income.

13. Sell Your Original Instagram Photos

While you can share your social media photos on Instagram, you can also sell prints of your photos for a profit on and similar sites.

14. Share Your Knowledge

Do you have in-depth expertise about a specific hobby or any other subject? You could create a website that offers your expertise to others for a price, like offering a music lesson over Skype for a fee or charging for video lessons on gardening. You can make extra income or become wildly successful with this method of making money online.

15. Become an Amazon Associate

This program allows you to earn money by including affiliate links to different products offered by Amazon. When a visitor views your blogs or social media pages and clicks through the Amazon links on your site, you will earn commissions from Amazon on qualifying products bought during that session.

16. Become an Internet Life Coach

Because of the strong interest in quality of life and work-life balance issues, life coaches have become popular in recent years. Unlike the intellectual demands of becoming a technical or executive coach, life coaching can be successful if you possess common sense, a respect for family and a commitment to enjoy life to the max every day and helping others do the same.

17. Promote Organizations on Social Media

Many major retailers will pay you for promoting their businesses on your websites and social media pages. They might pay you in cash or gift cards. For example, some restaurants might give you a gift card if you check in on Facebook or Yelp.

18. Promote Businesses, Products and Services via Affiliate Programs

If you have a website or blog, you can make money through affiliations with other businesses and sites, which will pay a percentage of sales you generate for the affiliate company.

19. Sell Handmade Items and Crafts

For those who like to make handcrafted items, websites such as Etsy are ideal to make some money off of such hobbies. Dedicated handcrafters should check Etsy and similar sites to find the best fit for their products.

20. Become a Virtual Assistant

There are freelance sites, such as the popular oDesk, that often have jobs for virtual assistants. Just as with physical assistant positions, you will get paid for helping executives with a wide variety of tasks.

Read More: 20 Apps That Make You Money

21. Become a Freelance Writer

Do you have a passion for writing? If earning money by writing gets your blood moving, there are numerous websites offering assignments for aspiring and experienced writers alike.

22. Sell Customized T-shirts Online

Selling graphic T-shirts is big business. Customized T-shirts with clever sayings or graphics are ideal for online sales. Sites like Teespring allow you to sell customer shirts. Teespring’s unique model allows you to design the shirt and get buyers lined up to purchase it. This saves you from the initial investment in stock and the time on processing and shipping orders, though you’ll likely make a smaller profit on each shirt sold.

23. Become a Third-Party Seller on Amazon

If you’ve visited Amazon, you have seen products sold by third-parties with the comment “ships from Amazon.” These are sellers who send their products to Amazon fulfillment facilities, then Amazon lists the item and ships it when a buyer is found.

24. Buy Local and Resell Online

Another great way to make money is to find things in your area that are free or cheap, and then sell them online. Many people hunt through local thrift stores for rare collectibles, vintage styles or cheap-as-dirt books or media to mark up and resell online.

25. Design Websites for a Fee

If you have an interest or skill in web development, there is a big demand for designers to build winning sites for businesses or organizations. Sites like are a good place to start to find clients and build your portfolio.

26. Promote Products on Your Website

Sites like SocialSpark offer bloggers cash for authoring and posting original copy about products or services to their sites. Just make sure to pay attention to FCC disclosure requirements when you’re getting paid to promote.

27. Buy Domain Names for Resale

Some people have made big dollars by owning desired domains and selling them to hungry buyers. For a minimum investment of buying domain names you feel will be popular (typically $10 to $20), you might make a big profit selling it down the line.

28. Rent Out Your Driveway or Reserved Parking Spot

Parking is at a premium in most thriving cities. Renting an unused space in your driveway or vacant deeded parking space can generate additional income. Advertising availability on Craigslist exposes this opportunity to local people, and up-and-coming apps like JustPark also allow you to easily rent out your parking space when it’s not in use.

29. Provide Online Tutoring

Sites like and will connect you with people looking for help learning a subject, and you might be in particularly high demand if you’re good with math, science or a foreign language. You have to go through an application process, and once you’re approved you can start getting paid.

30. Teach an Online Course

Sites like Udemy connect experts with people willing to pay to learn from them. According to its website, about 10 million students use this service, and the average instructor earnings is $8,000.

30 Clever Ways to Make Money Online

How to Start a Business With Absolutely No Money

How to Start a Business With Absolutely No Money

A large number of would-be entrepreneurs possess the desire, the motivation and the leadership to start a business, but are held back by their lack of money (and their perception of its importance). For them, the path to greatness stops there. But it doesn’t have to.

An entire online course has been built around the counter-intuitive statement that “you don’t need the money, you need a better strategy.”’s course, “How To Start a Business With No Money, Borrowing or Credit,” makes this statement repeatedly and actually analyzes real business case studies that prove it.

The course authors, Peter Sage and Jimmy Naraine, have started several businesses with no money, and share their learning experiences with their students. Sage is a celebrity entrepreneur who personally started over 20 companies — of which some failed (and he took away lessons!), and others have become large global success stories. Naraine’s path to greatness includes working for companies such as Goldman Sachs, running his own businesses and sharing his inspiration with more than 41,000 students.

For anyone wanting to learn success strategies for how to shortcut the need for money when starting a business, Sage and Naraine cover: dealing with haters and naysayers on your entrepreneurial journey, essential keys for designing a strategy for your business, an exercise to boost your confidence in your business abilities and navigating the tricky path to selecting partners.

You should expect to walk out of the course with an understanding of these key tools:

  • Five ways to make money
  • The difference between an emotional vs. a financial bank account
  • The mechanics of making money
  • Ways to create money
  • Several case studies to back up these strategies

Udemy is now offering a special discount to jump-start your venture. From now through the end of July, take advantage of the Promo Code: ENTREPRENEUR30 for an additional 30 percent off this course.

There’s plenty more to learn about money, motivation and entrepreneurship. Browse’s thousands of courses to build a better life, starting now.

How to Start a Business With Absolutely No Money

The Promise of a Truly Entrepreneurial Society

The Promise of a Truly Entrepreneurial Society

For the last 200 years, entrepreneurial prowess enabled by financial capital has powered a long surge of economic growth. Over the major innovation cycles, the capitalist system has been resilient enough to absorb the effects of the crashes caused by pure speculation and turn them to its advantage. Production capital took the lead over financial capital and real value over paper value, as Carlota Perez has so well demonstrated in her book Technological Revolutions and Financial Capital.Fast forward to today, and the picture is not so happy. Financial capital is in the driving seat. Eight years on, the world is tentatively emerging from a financial crisis that almost broke the global economy. Even though we are back to a semblance of stability, a range of unresolved issues – sky-high government debt, a still-fragile financial system, stagnant productivity, increasing levels of inequality, latent currency crises, slowing growth in emerging markets, high volatility in stock and commodity markets and geo-political instability and extremism – preclude any easy return to sustained economic growth.
There are certainly many causes for concern. A striking feature of today’s fragile world situation is the inability to channel an abundance of cheap financial capital into productive use by companies, economies and states. Some prominent economists predict a new period of secular stagnation as the last great phase of innovation-fueled growth (as they see it) dries up. With attention fixed on the obsessive search for the next high-tech “unicorn,” vital investment is lacking in “Main Street” companies that could fuel precious growth and employment.
Most large companies seem to have lost the taste for entrepreneurship, their CEOs preferring to focus on using technology to maximize profit from existing businesses, as Clayton Christensen and others have shown, or not to invest at all. They are too often governed by the interests of shareholders who regard corporations as speculative investment opportunities rather than human communities for which true owners would feel ties of responsibility and commitment. And while capital markets celebrate short-term results over long-term corporate development, governments seem to have only one response to the urgent new challenges of our time: overregulation, resulting in crippling micromanagement and microregulation of domains that are evolving at breakneck speed, frequently aggravating the problems the regulations attempted to resolve. It is questionable, for example, whether many thousands of pages of regulations have enhanced the banks’ ability to carry out their core mission of funding the real economy of goods and services for real human beings.

The entrepreneurial society

Between discredited financial capitalism on one side and ever more burdensome state bureaucracies on the other, can we revive a lost but deeply rooted human capability – the capability to take passionate ownership of the problems we face, and to accept responsibility for creating our own solutions – that is, create the basis for a properly entrepreneurial society?
Peter Drucker called this a turning point in human history. What we need, he said, is not just an entrepreneurial economy but an “entrepreneurial society in which innovation and entrepreneurship are normal, steady, and continuous.” He saw innovation and entrepreneurship as life-sustaining activities that should pervade organizations, the economy, and society.
In terms of management, the advent of the entrepreneurial society means above all replacing the rigidities of industrial-age mind-sets, with their command-and-control, top-down orientation. There are indications that this is happening.

Agile methods and Scrum are creating space for individuals to self-organize and work in iterative processes. By bringing customer development closer to the marketplace and enabling rapid learning from failure, the lean start-up movement has great potential to increase the success rate of new ventures. New business models and value propositions are being developed by global teams using web-based tools and communication methods. Design thinking is entering the mainstream as large organizations learn to proceed by prototyping and iteration. Start-up factories, incubation hubs, living laboratories, and hotspots for innovation are springing up in cities around the world.
Large corporations are devoting serious attention to becoming “ambidextrous,” combining robust exploitation capabilities for existing businesses with new exploration-driven business engines inside and outside their organization. And above all, young people are legitimizing entrepreneurship with enthusiasm, passion, and drive.

Managing the transition

Yet start-ups and large corporations can only be part of the story of entrepreneurial reinvention. Making the shift from small to medium-sized business and generating more fast-growing “gazelles” remain major entrepreneurial challenges. Germany has shown the way, its “Mittelstand” encompassing numbers of world leaders or “hidden champions” in highly specialized fields, as Hermann Simon has described in his book of the same name. This entrepreneurial success story has not happened overnight. Many family-owned Mittlestand businesses are exemplars of stewardship in its truest sense, demonstrating long-term commitment to a business and to the employees who are its heart and brain. There are lessons here for giant corporations and the stock markets they trade on.

While digital technology creates extraordinary opportunities, it also disrupts existing economic, social, and physical infrastructures in ways and in time-spans that make the social consequences hard to absorb. Drucker observed long ago that each social problem is a business opportunity in disguise. Social entrepreneurship, social innovation, and public-private partnerships must play their part here. What we need is a “sharing economy” for acts of citizenship and mutual support and exchange that becomes a “caring economy” and that, together with state agencies, might knit together a flexible social web to provide security for the most needy.
Less encumbered by corporate baggage, the emerging world is more receptive to the idea that entreneurship can lay the foundations for decent lives and a good society – important, because the challenges are daunting. 

According to the 2015 Global Entrepreneurship Index, by 2050 low-income economies will need to integrate more than two billion young adults into the world economy. Job and sustainable growth are the real challenges of the world, beside which many of the issues that politicians, trade unions and advocacy groups tussle over in the West are luxury problems.
This enormous a transition is painful and frightening. But it can be shaped by society’s responsible groups — among which entrepreneurial managers, as Drucker always reminded us, must lead.

The Promise of a Truly Entrepreneurial Society

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