So, we are trying to explain this, elusive, phenomenon which is business success, and we said that we don't believe there's, 100%, effective formula that we can, or equation that we can write out. But we do believe there are some factors that seem to be important. Let me, let me tackle a few in kind of a systematic way. One factor that's often mentioned as being important to a business's success is leadership. Another is human resources, the people that work in the company. Another is marketing, having a good marketing plan. Another one is having access to financial capital. Those are just a few. I'm sure we could mention a lot of other, factors. And as you go through this, you, you should be considering others that we don't have the time to discuss. Many of the books that you might pick up, for example the book that I mentioned previously, Good to Great, start with leadership. And they say they look at some companies, Good to Great I believe looks at 11companies, in the past, and says these are companies that, that really had, some amazing success over a specific period of time. And it looks like after analyzing all 11 of these companies that all 11 of them have some very significant leadership ability at the top. They had executives who played a very significant role in shaping and molding the company who had specific visions and, and strategic plans and, and missions statements for the businesses. And so that's one approach to, to finally understand success in business. If you're starting your own business, I certainly would not try to persuade you that you should not have good leadership. It does seem to be an important factor. The problem with nailing down or identifying one factor like leadership or financial capital is the following. If you go back to a book like Good To Great which identified, I believe, 11 as I said, U.S. headquartered firms or companies. Guess what happened to a lot of those companies in the subsequent years. I believe Good to Great was written in 2001. Many of those companies ended up actually, there's no other word for it, but failing. They no longer exist. One of them is Circuit City was a major chain of that sold electronic gadgets and devices based here in the United States. It was considered to be one of these excellent companies that was successful that we should try to follow their example and follow their example of excellent leadership and in the years following, it went bankrupt. The brand is no longer a powerful one, the stores closed down. So it can't be the case that leadership is a sufficient guarantee of success. If, if a company puts its Circuit City, and I don't mean to criticize Circuit City, because it is very difficult to achieve sustained success in business. If a, if a company like that can have sustained success for a period and then, and then abruptly, or rather abruptly, fail what does it say for any of us that, that are going to start our own businesses? It probably should tell us that we can't undertake a study and assume that those are guaranteed factors for forever success. Leadership is not a sufficient requirement. It might be necessary. You probably will have a hard time finding many successful businesses that have absolutely zero horrible negative leadership. Now maybe some of you have worked for people that you don't exactly consider great leaders and so there probably are some counter examples. But I, I would be willing to submit that, that having good leadership does seem to be a factor that you would want to include in your ingredient list for starting a successful profitable business, but it's not going to guarantee you success. The same could be said for financial capital. Its often stated in, in books and classes about entrepreneurship that many small businesses that start up fail. And one of the most often sited reasons is lack of financial capital or not having money, resources to grow the business. Or to sustain losses over a period of time as the business begins to grow. And that is certainly true. What is also true is that there are lots of businesses with financial capital that don't end up succeeding. So that's not a guarantor of success either. And that's what I mean by we can't give you a hundred percent predictable formula that will guide you. Yes you should have access to financial capital if you want to succeed. Also I would say that there are some businesses that really start out with very limited resources that end up growing and succeeding. So it's not always the case that that all businesses that have had sustained success have access to that capital. So I can't tell you that what you need to do is go get a set of locations that will guarantee you success. I can't tell you that you need to have an amazing operations plan and that will be it. That would be your your guaranteed model for success. I can't even tell you that if you treat your employees well, that you will for sure succeed. There are lots of businesses that had very satisfied employees who have failed. There are even businesses with satisfied customers that fail. And so, there's just not one formula. In fact, there is this unexplained part of the, the equation that doesn't exist called luck that's out there. There are a lot of businesses that are in the right place at the right time with the right person who is able to take advantage of an opportunity which we might call luck. Some of you may disagree with that label or term, and that appears to be a major factor in explaining their success. Let me give you an example. Some people have explained the Japanese company, Honda, and another Japanese company, Toyota, and their success in the United States automobile market of being at least partially attributed to luck. What do we mean by that. Well in the 1960's Honda for example, was a, a very small brand in the United States and they did not make cars yet. They were a company that had it's toes in the smaller engine market. They made things like motorcycles and lawn mowers, if I'm not mistaken. But by the 1970's, they sought to expand their position in the US automobile market. And I don't think that Japanese executives in the headquarters of Toyota or Honda as brilliant as they probably were, predicted that there would be an oil worldwide petroleum oil crisis that would raise the, the, the price of oil. And put severe restrictions on the importation of oil and therefore make larger cars less demanded and smaller cars more demanded. There was a, a very significant shift in demand in the 1970's from large cars to small cars and you probably could say that those companies took advantage of an opportunity. But it's not that they predicted, they sat down and made a strategic plan in 1970 and said we are going to overtake and we know that there will be this shift and we know that oil prices would change. There are factors of luck that occur in in any market at any time. Which is why we can not give you 100% predictable successful formul, formula for operating your business, or starting your business. And the next part will give you a little bit more insight into this and finish up module one
