When Money Is Cheap Idiots Become Entrepreneurs
As a business owner, you're thrown into the realm of the unknown, you don't know where your next meal is going to come from, you don't know if your idea is going to work, you don't know-how industries, and the world change will affect your business. You're constantly looking into the variables and trying to figure a way through the madness.
As you can imagine, dealing with so many variables and uncertainty, many look to others for advice, guidance and influence. We tend to look at those we feel are successful in the hope of replicating that success.
Price and profit signals are destroyed
In the business world where money is meant to signal that you're on the right path and satisfying peoples needs. If your product or service is superior, you should make money as a reward for your time, labour and effective output.
In a fiat money economy, the price signals are heavily distorted since a privileged class can access money easier and cheaper than others. This distortion, and misallocation of resources, I believe, encourages new entrepreneurs to seek validation for their business models in the wrong places.
They seek validation in
- How much money they can raise
- The company they keep
- Their reach on social media
- Their fame and clout
And profitability, satisfied staff and customers, which should be your key metrics, are ignored and, in turn, suffer. We are building a generation of companies that cost more to serve us less, which shows up in inflation of the price or shrink-flation of the product.
Dumb ideas getting funding
As we come to terms with the death of fiat money, we get increasingly desperate to keep it going. The bigger the promise of value and returns, the likely you'll get funding. So many investment companies and banks are sitting on cash they don't know what to do with and are desperate to find opportunities to fund to give them a greater return.
In that desperation, they turn to snake oil salespeople, scammers, friends, family and people who would never survive in a real capitalist economy. These people have no business sense but all the business connections and are willing to take money to try out a range of stupid ideas.
Have you ever seen the startup scene or the news and wonder who these dumb ideas get funding? Who are the morons backing these morons?
No, there's nothing with you; this is just the state of the business world today.
Breaking the spirit of entrepreneurs
I have a digital business, my cost to run is meagre, and I can scale it to more people and countries fairly easily as the capital comes in. I run a lean business, and I am fortunate that my skills allow me to operate in this market.
I'm not saying digital businesses in Africa is a walk in the park, we do have issues like poor access to electricity, high cost of data, slow internet, low penetration of eCommerce, and online payments, but this will improve with time. In the African markets, we're still very early.
But then I look at other business models, and I don't have to look far to find entrepreneurs who amaze me. I know people who make their own clothing, bake for a living, and do so with modest means and generate an income.
I see them having to jump through hoops such as minimum wage laws to employ people, I see them have no access to affordable banking, I see them hit with our countries high inflation, and they are often carrying the cost of those burdens it works.
Sound money makes for sound business
In a sound money system, their labour would not only be rewarded at a fair market rate, but they would continue to improve their services and products as things cost less to acquire, and they can set aside funds to grow their businesses to scale.
In a hard money world, smaller margin businesses tend to make sense, and it even unlocks more frequent and microtransactions as they become worthwhile for these businesses.
As long as money is cheap to manufacture and remain on a fiat system, this reality will be nothing but a dream.
Have your say
What do you good people of HIVE think?
So have at it, my Jessies! If you don't have something to comment, "I am a Jessie."
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