April 2020 Bank Secrecy Act / Anti-Money…
The Entrepreneurial Myth of Colonel Sanders
We're guessing that most of you know the story of Colonel Sanders. Finger Licking Good. Kentucky Fried Chicken. One of the most successful innovations of all time.
Also one of the most successful entrepreneurs of all time. By 1964, he had 600 franchises selling his chicken and had sold the company for $2 million. At the age of 88, he was a billionaire.
It is said that he was turned down 1009 times before he heard his first yes. He was 65 when he started his chicken business and went from door to door with almost no money to fund or support him. His lack of money was a product of a failed career, never quite achieving what he had dreamed of. Before the age of 65, Colonel Sander’s life was a pretty sad story. His father died when he was 5. He quit school at the age of 16. He lost four jobs by the age of 17. He joined and was kicked out of the army. He plotted to kidnap his own daughter. At various times he was a farmer, streetcar conductor, soldier, railroad fireman, lawyer, insurance salesman, steamboat operator, secretary, lighting manufacturer, hotel owner and restauranteur, but never managed to stick at any one for long, never being successful enough to amass wealth. At least until he was 65.
The lesson we are told is to never give up. Try, try and try again and one day you too can succeed. And translate that to today’s world of Shoreditch and Silicon Valley and the lesson can be extrapolated that success is born of failure. The process of failure builds learning and resilience, and to some extent, creates a winner. Right? No, absolutely wrong.
Our question is this: Why get to the age of 65 failing at every single thing you do? What is so great about that? Translate this entrepreneurial record into the boardroom of a FTSE100 or indeed any corporate. Imagine that you are being asked to invest in this person, who has failed each time they have tried a new venture. You might surmise there is a reason why they have not succeeded. Maybe they are not so smart, lack discipline, have a poor concept of business, no staying power, no backers, no customers, no luck. Would you back this person? Actually, in our experience, one failure is just about as much as you are allowed in a corporate setting. You rarely get a second chance.
A better theory is that success breeds success. We would all back a proven winner, and for good reason. And that is why ventures have to succeed the first time. Forget building a portfolio with a long tail of failed ideas; the aim of any corporate should be to ensure that most--if not all--ventures succeed.
The story of Colonel Sanders is a myth. Sounds great. Feels great. Very motivational. In truth, it legitimises a lot of poor-quality entrepreneurs chasing ill-thought through dreams with inadequate business plans.
At Sia Partners, we look for a hit rate on new business launches of 80% or higher. You should too!