Anyone can do it. The American Dream. The glory of Britain’s new meritocracy. Isn’t it all true? One of the perils of reading the financial press, or exposing your brain to any of the mainstream media, is that you begin to believe the hype (and the misery, as The Escape Artist points out this week in his blog). When it comes to business, the message is that you too could become the next Alan Sugar, Duncan Bannatyne, Michelle Mohan. You could build a business from scratch into a multi-million concern. They’ve done it, you could too. What’s stopping you?
The Barely Acceptable Face of Capitalism
I was recently flicking through the pages of Moneyweek when I saw a profile of “The Reluctant Barista Who Made a Million”, Sahar Hashemi, co founder of Coffee Republic. It wasn’t quite a “rags to riches” tale, signified by the fact that she attended City of London School for Girls, but I read on. Seemingly, she’d had the idea for her coffee shop on returning from a trip to New York (as you do) and was unable to source the skinny lattes she enjoyed so much in the Big Apple.
So she set up a coffee shop, and quickly opened more with the funding help of an “angel investor”. Seemingly the banks wouldn’t lend the money needed to fund the expansion. No wonder the banks passed on the opportunity. Coffee shops are notorious business quicksand for anyone trying to make a buck. Just take a quick look at any local businesses for sale in your area. The money you can make from even a relatively successful one isn’t good. The money you can make from fifteen, in London, in the right areas, well, that’s a different story.
So who was the “angel investor”, I wondered? I nipped onto Google to find out, largely because I was beginning to smell a rat. My friends run a coffee shop. It does okay, but it’s only borderline profitable and they work like demons to keep it going. Would an angel investor step in to help them with a £600,000 injection for expansion? My arse they would.
My quick Google search revealed nothing, so my suspicions heightened. Who did she know? An old school friend, perhaps? A friend of the family? A helpful business associate from mummy and daddy’s network? Where were the connections that brought about a 600k investment? In a coffee shop?
Sahar Hashemi is now an OBE and is held up as an example of British entrepreneurship. I don’t really want to knock what she has achieved because she’s clearly good at what she does. So are many of us though, but not all of us get the breaks. I hadn’t heard of her before I read this article, but I had heard of Alan Sugar, Duncan Bannatyne and Michelle Mohan, people who really did build businesses from nothing, with no connections other than to hard graft. Why have I heard of them and not Sahar Hashemi? Perhaps it’s because these are the aspirational role models the media like us to focus on, to show us that “Anyone can do it” in modern Britain. Yes, true, in the same way that anyone can win the lottery. Mind you, if you can buy six hundred thousand tickets, instead of one, you have a better chance.
The media don’t want the masses to focus on the real back story to a lot of business success. Networking. Connections. The right schools. Who you know, rather than what you know. Why? Because many of the owners, proprietors and directors are from that background themselves. They’re happy to let one or two “normals” slip through the net to keep up the pretence that we’re a meritocracy, as long as the majority of the ranks of highly well paid executives are peopled by their own.
If you’re interested in looking further into this, try reading “The Establishment” by Owen Jones. No, I can’t be bothered with his left-wing posturing either, but his book gives you a glimpse into how the real world often works in Britain today.
The other big factors influencing success is being surrounded by some great people, being in the right place at the right time and having some lucky breaks. There are very few entrepreneurs, however, willing to champion these factors as explanations for their success. Generally, it’s all down to them. Malcolm Gladwell wrote a book exposing the fallacy of individual entrepreneurial flair, “Outliers“, which is great if only because ego-mad entrepreneurs hate its conclusions (for example, read Peter Thiel’s book “Zero to One”. It’s clear that Thiel hates to think his success as a Silicon Valley Billionaire can be down to anything other than his own greatness, and he takes a few paragraphs to have a proper go at Gladwell’s book.)
The more we question and poke what the media tells us about “business success” the better and more realistic we will become. “Anyone can do it”, maybe, but the more information you have about the real world and how it really works, the better chance you’ll have.
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Hi,
I totally agree with your dissertation on this phenomenon of the media making out anyone not doing as well as they want is to blame because it’s such a meritocracy. I’ve actually read ‘Outliers’ & appreciated the honesty as you say. It rang true when I was reading it because i have known people in my life who worked hard & were smart, yet even so, some did well & others didn’t, so I knew there had to be more to it than the establishment preach.
I’m reading Status Anxiety at the moment & it’s fascinating to see the historical/cultural evolution of blaming people for their lack of success. Scratch the surface of any of these inheritpreneur’s success stories & you’ll find their paths were well lubricated with priviledge, the few genuine cases being the exceptions that prove the rule.
I worked for a corporation for over a decade & used to go & talk to the Business Development guy there who I got on well with, to sound out on any ideas I had for myself. [hoping to break free by turning self-employed one day] He advised me as a friend to never approach the established players in the field of interest with your idea because the system was completely against you, explaining that that’s how our company got it’s new ideas ……. just nick them off anyone who sounds you out for a collaboration. I asked about protections against that, like signing a confidentiality agreement before spelling out the proposal, but apparently everything has a work-around, in the case of the CA, the company just waits until the time limit of the agreement expires then takes it for free, or claims they’d already had that idea.
So I asked how anything new can ever happen in business or inventions if people are too afraid to share their ideas ….. & basically that’s exactly why the few times it happens is when wealthy, connected people deal with their own kind – if they’re evenly matched in financial strength, for the most part, nobody tries to cheat & they work it through to fruition.
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Interesting points, especially about status when it comes to negotiation. Somehow I think it rings true, you’d treat a perceived equal more “equally” in a negotiation than with someone perceived with higher or lower status than yourself. Haven’t thought about that aspect before!
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I think I saw a TV programme on the Coffee Republic chain? They had some affluent US friends happy to drop money into the venture. The story went up to the point were it went into administration!
The mantra “It’s not what you know but WHO you know” ring true here. It operates in business creation and just in the general job market. As someone who has tried to find jobs on my own merit, I have found that in recent times I have only been able to find jobs via friends or contacts – maybe why I can’t find any work at the moment 🙂
Also I know someone who had a small business selling craft products, she went to a crafts fair and buyers from large high-street companies came round and discussed designs and supply options with her. They then walked away saying that they could just copy her designs and sell them without her. One buyer even said to her that they attend the shows just to find new ideas and copy them!
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Having spent years working with the major UK retailers, I know how bad copying can be! Of course, the manufacturers were complicit too. It should be a major part of every business strategy, figuring out what to do when someone copies your idea, hook, line and sinker!
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Social mobility is something that is covered in a free OU Course I have been following. The course material includes a Ted Talk by Richard Wilkinson which examines the statistics and compares the situation in different countries and makes the point that in the less equal societies (which includes the UK and the USA) mobility is far less than in more equal ones such as those in Scandinavia.
Apparently “….if Americans want to live the American dream, they should go to Denmark.” 🙂
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@Cerridwen – Surely if a society is more equal in the first place, then social mobility wouldn’t even be an issue, or certainly would be less of one? Because the level of state intervention in everyday life puts more people on an equal basis? But these countries are not exactly known for entrepreneurship are they?!
Anyway, I wholeheartedly disagree with this post. I can tell you from experience, that there are plenty of people out there who came from nothing and have ‘risen through the ranks’ so to speak. I currently work with a startup accelerator, and we are nurturing over 50 teams who are building or have already built up wonderful businesses from nothing over the last 2 years and 9 months. I work with them every day. Some have privilege and connections, some have started with literally nothing at all, but we have built up our own network of mentors from different business worlds to whom these teams have access.
I do believe it is a meritocracy, and I could go on and on about when I used to work in one of the most deprived areas in the country – where I also saw people raise themselves up. But there are two things to note – they either have to want it for themselves already i.e. they dream of being something more, or they have to be shown that more is possible and within their grasp. I encountered more of the latter when I worked in the deprived area, but I’d say about 20% of the people I worked with already had that dream of something bigger. The other 80% – about a quarter of these were really needing to be *shown*, the rest had just subdued dreams for the future and once we’d been working with them for a few weeks, they really started to shine…
There is a whole world of opportunity out there and it is just sitting there waiting to be grasped. Saying that someone doesn’t have access to investment or privilege is a downright lie, there are people out there waiting to invest in good ideas or even just great teams that need to work a bit more on their idea… and I am saying that from my everyday experience! What people are actually lacking is encouragement. People need to be nurtured from age 3 upwards in the nursery and school systems – they need to be encouraged to think bigger and follow their dreams. Also they need to be encouraged to set realistic, SMART goals for themselves. Jim, you said yourself in a recent post about the power of setting goals and how they almost complete themselves once you have them written down… this is what people need. Everybody has potential within them and they just sometimes need a little help to unlock it.
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Hi TV. No, maybe social mobility does not matter as much in more equal societies but, as we are seeing a rise, not fall, in inequality in the UK, the points that Jim makes are being highlighted and the whole situation is likely to lead to more social division and less general overall well-being.
Another thing covered in the course is how a greater level of equality produces a “happier” society and one that works better for everyone. I suppose it’s a matter of what you value. The statistics, unfortunately, do not support your personal experience on this. Social mobility is certainly not even remotely in the hands of a lot of people.
You make a very good point about the need for equal access to education and positive life experiences from a very young age. This, as you say, is critical. Unfortunately in the UK education is also very much tied to wealth and the access to the “right” schools and early childcare. No-one is saying that you can’t “make good” from very little in the UK but the systems we have in place are making it less and less likely.
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Thanks for the comments M and Cerridwen. I’m all for encouraging people to succeed and challenging the system with alternative strategies, such as saving incredibly hard to retire early. The more debate on it, the better. But I really don’t see much serious discussion of the subject on the media, which makes me wonder why not?
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Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure.
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My comment vanished, whilst leaving the quote behind… spooky.
Essentially I was saying that:
a. home life is probably more important that the (sometimes dodgy) school system. A child can overcome a lot if their home life is loving and mind-broadening;
b. we were discussing this very issue last night at the FIRE Escape gathering. Huw quoted the above as a reason to why we don’t hear about things in the media or why people in general would not even think to consider “radical” alternative strategies.
I quite agreed with Huw and the quote, and certainly from my experience it really tied in with the home life situation of the people with whom I was working. About 98% of them were from single mum families – often with their mum not even looking after them properly so they would go to their Nan (who incidentally was often called ‘mum’ by them). It was not surprising to see that the 2% with fathers still at home or a significant male presence e.g. an uncle, were much more confident, broad-minded, had more outspoken dreams etc. These people were all still in school… well, I say school, but it was basically a sh1t-hole…
Anyway, the other point I was trying to make was that even when the media has articles on ‘alternative’ financial planning or life strategies, it’s badly written and full of errors… my recent ‘hot to retire early – not’ article is evidence. Sad.
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A whole narrative has emerged around entrepreneurship recently. It’s aspirational and positive, and gives you a bit more hope than the only option being a job in the local factory. This is surely positive.
Sorting out the fluff in the media about it, and the reality seems to be s big issue. Daniel Khanmsn’s thinking fast and slow mentions that most businesses fail and that these would be entrepreneurs are likely to see better returns from being bog standard employees than trying their own thing. I was kind of tied up in the entrepreneurship boom that has been going on, but this really opened my eyes to the risks.
People say that failure breeds success., that you need to be dogged, keep trying. Seems bloody difficult though.
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It’s interesting how many guys I meet who are running their own business and envy the corporate life I once led! Meanwhile I envy them their autonomy and ability to make decisions that matter. I’d love to set up on my own, I think, with the caveat that I’d better be bloody successful!
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I think the boys at Freakonomics had this covered in their discussion about drug dealers living with their moms. The dream is undreamed of financial reward and status for a few, the cost is very real blood, sweat and tears for all. The better bet is to back them all and put your hard earned in a tracker!
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