Invisible Capital
Book

Invisible Capital

How Unseen Forces Shape Entrepreneurial Opportunity

Chris Rabb
Berrett-Koehler, 2010

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Editorial Rating

7

Qualities

  • Innovative

Recommendation

How do you explain the high failure rate for new businesses in the US, land of opportunity and the American Dream? A great concept, hard work and seed money often are not enough to ensure success. So says consultant Chris Rabb, who explains that, in addition to economic capital, entrepreneurs need “invisible capital” to succeed. These unseen assets consist of the accumulated knowledge, experience, networks and personal strengths prospective business owners bring to their ventures. Presenting an original idea like invisible capital is a challenge, and Rabb succeeds at times in explaining it through examples, demographic data and academic studies. But his book suffers from his scatter-shot approach, which veers from sociological text to policy analysis to social critique. While alerting readers that this is not a how-to guide, getAbstract finds that the book provides good insights about the myths and realities of “micropreneurship,” along with thought-provoking information on why new businesses fail – and how to make yours succeed.

Summary

Prevailing Myths

Many people think entrepreneurs need only an exceptional idea, a solid work ethic and start-up capital to strike it rich, but the reality is much different. The Kauffman Survey found that the chances of a new business earning more than $25,000 annually, being able to afford staff and making it past the fourth year are slim: just 12.5%. In fact, 98% of American businesses are “microenterprises” run solely by their owners. Data also show that more than 50% of businesses are home-based and 70% are sole proprietorships. Many new small businesses never generate enough income for their owners, or “micropreneurs,” to quit their full-time jobs.

While small businesses can provide decent livings for their owners, the firms that will grow to create important job opportunities for the economy will require a new entrepreneurial mind-set. Management guru Peter Drucker noted that being a small-business owner is not synonymous with being an entrepreneur. Entrepreneurship is a strategy and a process that can run the whole gamut of risk-taking behavior. True entrepreneurs create value for society, the public and the market. They assess conditions to recognize opportunity...

About the Author

Chris Rabb is a writer, consultant and speaker on entrepreneurship. He worked as a US Senate aide on small business matters, and he founded and ran several enterprises.

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