Tex Cobb and Entrepreneurial Math
By Joe Leininger
Have you ever thought about the absurd success/failure ratios we deal with each day as entrepreneurs? Speaking on a personal basis, I would guess that nine out of ten calls I take on a given day will generally involve a problem that needs fixing, a challenge to overcome, or just plain old bad news about some aspect of our business. “The offer was rejected. The buyer flaked out. The partner is upset. The crop came in light.” And so on and so on, until I get home and my wife asks me about my day: “Oh pretty good, I guess. And yours?”
Motivational speakers talk about the best hitters in baseball only succeeding three out of ten times but .300 is a much higher success rate than I have experienced since starting Resource Land Holdings (RLH) sixteen years ago. So what gives? Are we doing something wrong or there some really bad mathematical probabilities associated with being an entrepreneur.
Well of course we are doing some things wrong. An entrepreneur learns the games while he plays it, which partially explains the dismal ratios. The other explanation ties to how hard it is to do the things an entrepreneur actually does. We are trying to find something that no one else can find, create something that otherwise wouldn’t exist, and implement something that perhaps hasn’t yet been tried. In light of that, maybe 10% success rate is really quite logical.
Logical?—perhaps. Easy?—never. Some of you sports fans may remember the heavyweight boxer, Tex Cobb who was known in his time for having a “strong chin,” i.e., the ability to block punches with his face. His 15-round loss to Larry Holmes was so bloody that Howard Cosell vowed to never announce another fight again, which Cobb claimed was his ultimate gift to the sport. But Tex Cobb was tough and persistent and I am glad that I seem to have a little bit of Tex in me.
Sometimes it seems that my primary gift to the business world is an ability to take a punch and pull myself up to fight again, while encouraging my team to do likewise. With 90% of outcomes being difficult in nature, I suppose there are worse gifts to have in business than that.
It always amazed me to read that when Jesus healed ten lepers, only one came back to say thank you. Besides being a commentary on a general lack of gratitude amongst humanity, I think Jesus was trying to prepare us for the numbers of life. If you aspire to do something great, expect to fail a lot more than you succeed. If you help ten people, don’t be surprised if only one says thank you. Life is a challenge and you need to be tough to make it. Even more so if you are an entrepreneur, or someone who is trying to create something from nothing.
This is a tough market in which to find a well-priced deal and frustration is high among dealmakers. Investors seem to be mispricing risk and are buying assets for absurdly low rates of return which only raises sellers’ expectations and makes it harder for the rest us to find great opportunities. It is normal to be discouraged in times like this and wonder if you are up to the task. RLH wants to be supportive of our fellow entrepreneurs in this cycle with the goal being to persevere, get up off the mat and fight the next round. As Tex proved, it’s almost impossible to knock someone out with a strong chin.
Joe Leininger is the Founder of Resource Land Holdings which he started in 1998. Resource Land Holdings invests in agricultural, timber and mining properties in the U.S.