We live in a time of an excess global supply of cash.
If you are a new entrepreneur, this could mean one of these three things to you:
1. It might be easier than ever to raise seed money for your business.
2. You might see a huge increase in the number of new businesses started in your community in the near future. And that might make you feel discouraged from starting your own business. Heck, you might even feel like you’re too late because everything is already ‘invented.’
Nothing could be further from truth. To show you what we mean, let us give you a real life example.
Imagine what the world market for nonalcoholic beverages prior to the arrival of pop drinks looked like. If they had pie charts back then, the whole market would have shown three segments: coffee, tea, and milk.
As far as new entrepreneurs at the time were concerned, the whole market for nonalcoholic beverages was cornered. If you weren’t in coffee, tea, or milk, you could be persuaded that there would be no point in trying to bring any other nonalcoholic beverages to market, right?
Happily for you and us, the folks at Coca-Cola did not get that memo. What’s more, in the process, Coca-Cola proved that the whole pie is usually so much bigger than we tend to think.
3. You might be discouraged from starting your own business because you might start seeing an increase in the number of failing businesses in your community in the near future.
Businesses fail for many reasons. But one of the reasons why you may see a sudden increase in businesses failures in your community in the near future is likely due to the existence of so-called ‘zombie businesses.’
“Wait, what are zombie businesses?” 💬
While they are often perfectly legal, and while this is never publicly stated, zombie businesses tend to be started in order to support aims typical businesses don’t.
As you know, your typical businesses aim to serve a market need, to commercialize an important innovation, to make profit for its shareholders, etc.
The aims of zombie businesses, on the other hand, from what little we know about them (and it is little), could be as humble as being pet projects for the friends/family of those who suddenly come into large sums of cash (again, we’re only thinking about those who make their money legally).
Or it could be practical, as in investing for the sake of securing citizenship (e.g. 60 Minutes’ Steve Kroft reported recently on such cases, as did CBC, see: http://bit.ly/cbcstory23).
Investing for the sake of securing citizenship can manifest itself in many ways. Here are just a few: massive condo buildings that are built uber fast and which then sit unsold on the market for years; homes in which no one lives; restaurants and gyms that are always empty but somehow keep the doors open, etc.
The common thread for zombie businesses is that they don’t tend to be run as typical businesses, and they don’t have the desire or competencies to compete with the same.
If you are a business owner, the existence of zombie businesses may make your life harder in the short term, but in the long term they are hardly ever a competitive threat to you.
Takeaways:
a. We live in time of an excess global supply of cash. Because of that, it might be easier than ever to raise seed money for your business.
b. Don’t be discouraged from starting your own business just because you might be seeing a huge increase in the number of new businesses started in your community.
Just remember how the arrival of Coca-Cola in the previously ‘crowded’ market of nonalcoholic beverages consisting of coffee, tea, and milk proved that the whole pie is usually so much bigger than we tend to think.
c. Don’t be discouraged by the existence and/or fail rate of zombie ventures, because they only resemble real businesses and usually don’t have the desire or competencies to compete with the same.
“Wait, why did you share this?” you might be thinking right now.
To inspire and empower new entrepreneurs. Being a real entrepreneur is hard. You have all kinds of real things to worry about, and the last thing you need is to be discouraged by shtuff that’s not even real, right?