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80 years. Billions of dollars. One wrong assumption.
Everyone agrees that small business is the backbone of the country.
We’ve been saying it for 80 years. The SBA launched in the 1950s. Programs. Lending initiatives. Tax incentives. Billions in investment.
And our business survival rates haven’t budged. 20% of businesses still die in the first year. 50% by year five. These numbers are older than most of us, and they’ve never moved.
The problem isn’t that we haven’t invested enough. It’s that we’ve been operating under a bad assumption.
Somewhere along the way, we started treating “funding raised” as a proxy for “success.” As if getting a loan or raising a round meant you had everything figured it out.
It doesn’t.
We’ve assumed funding readiness equals business health.
Here’s the uncomfortable truth: nearly everything we call “small business support” was designed to help businesses get loans or attract investors.
There are 30 million solopreneurs in the United States. Only about 6 million businesses have employees.
Venture capital almost never invests in solo founders. Most solopreneurs won’t qualify for loans—so they need to know if their model works before they burn through their savings.
Of the roughly 700k businesses in Arizona, only 2.3k received equity investment or an SBA loan in 2024. That’s only o.33% of all businesses in the state.
Yet we keep building programs, lending, and advice for this minority—and calling it support for everyone.
This highlights a deeper problem: when you don’t define success for yourself, other people define it for you. Investors define success as $100M+ in revenue—because that’s what their fund model needs. Vendors assume you want to “scale.” Accelerators assume you want to exit as fast as possible. Everyone optimizes for outcomes that may have nothing to do with what you actually want.
If you’ve ever felt like the advice you’re getting doesn’t fit, you’re not wrong. It was designed for a different kind of business with a different definition of success.
The real reason businesses fail
It is not because entrepreneurs do not work hard enough. It is not because they do not care enough. It is because teaching the real skills that help businesses survive is hard.
Businesses are run by humans, yet we ignore the unique (and very human) challenges that most entrepreneurs face.
Challenge One: Financial stress lowers intelligence
This isn’t a metaphor. When people are under financial pressure, their cognitive capacity literally drops—by the equivalent of 13 IQ points, according to research by Mani et al. at Princeton. You’re making worse decisions not because you’re bad at business, but because constant financial pressure creates conditions where your brain can’t operate at full capacity.
Challenge Two: Entrepreneurship requires an honest feedback loop
The skill of running a business demands a consistent cycle of learning:
- Here’s what I think will happen.
- I test it in the real world.
- Here’s what actually happened.
- Now I adjust.
For some people this is intuitive. But for most, no one has ever taught it to them how to make this practice a habit.*
Challenge Three: Most entrepreneurs think they have to navigate alone.
No peer group. No one they can be honest with. No one to whom they can say, “Here’s what’s really going on”—and get a useful answer instead of cheerleading.
The real missing skill: being your own best investor.
Here’s what actually gets me fired up.
The reason most small businesses fail isn’t that owners lack passion, work ethic, or good ideas. It’s that no one taught them how to be good investors of their own resources.
Let’s say I’m a solopreneur whose real goal is simple: I just want to replace my salary so I can work for myself. This is a great goal. There is absolutely nothing wrong with this goal.
But if I ask someone for advice, they might tell me to pour my money into social media advertising – because they assume I’m trying to build a venture-scale business. So I spend my hard-earned savings on the wrong strategy because I trusted an expert who never bothered to ask what I actually wanted.
Funding is a tool – not a destination, and certainly not a validation of your worth as an entrepreneur. (I wrote more about this here.)
We should stop doing this. We should teach people how to build the business they want – not a business that would attract investors or please bankers.
Why this matters beyond business.
The same principles that make a business work – revenues have to cover expenses, time is the most valuable resource, invest in what compounds – are the principles that make a life work.
Small business owners feel this more acutely than anyone. They’re literally investing their life savings into their work. Every dollar misspent is a dollar they can’t get back.
So there’s a much bigger advantage to changing our approach. When we train entrepreneurs to think like an investor in their business, they learn to think like an investor in their life. The skills transfer. The clarity compounds.
Even if the business pivots, even if it fails—they’ve learned something most people never do: how to identify where their resources actually drive results, and how to make decisions based on reality instead of hope.
That’s worth more than any funding round.
Where we go from here.
Reality is uncertain. Entrepreneurs know that better than anyone.
Instead of pretending we can eliminate uncertainty, we need to teach people how to navigate it – how to see what’s actually happening in their business, test their assumptions, and adjust before they’ve burned through their runway.
I’m committed to changing this, because entrepreneurs deserve support that helps them achieve their goals – regardless of what those goals are.
And honestly, it’s way past time.
*If you’d like support in building this for yourself, give Fric a try. We guide you through the process while letting you go at your own pace.
Planning only works when it reflects reality. Fric connects your assumptions, actions, and actual results in one place. Start a free two-week trial and see how much clearer running your business can feel.
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