One of my friends recently acquired a bankrupt medical distribution company using nothing but loans and credit. Less than a year later, the company reported its first positive turnover in years. The acquisition was not about sentiment or personal passion—it was a calculated move into a space with overlooked assets and high entry barriers. This is not the image of entrepreneurship most people hold, yet it fits the definition precisely.
According to the OECD, an entrepreneur is an individual who takes the initiative to start, manage, and assume the risks of a business or enterprise, whether creating something new or reorganizing existing structures for profit. The Global Entrepreneurship Monitor expands this by including those who acquire or inherit businesses and transform them into more competitive entities.
source: OECD, Global Entrepreneurship Monitor
In the United States alone, about 20 percent of businesses shut down within their first year. By year five, that figure rises to nearly 50 percent, and only around 34 percent survive a full decade. These numbers, published by the U.S. Bureau of Labor Statistics, paint a backdrop where persistence is not enough without strategy. Among the common causes for failure, lack of market need accounts for 42 percent, running out of cash 29 percent, team-related breakdowns 23 percent, and competition 19 percent.
source: U.S. Bureau of Labor Statistics, CB Insights, Revli, Embroker
Common Misconceptions About Entrepreneurship
Despite growing interest in entrepreneurship, several misconceptions persist that distort how people view entrepreneurs and their journeys. Five of the most common misunderstandings are:
• Entrepreneurship only means starting a business from scratch
• Entrepreneurs are born, not made
• Entrepreneurship is about big, disruptive innovations
• You need a unique, never-seen-before idea to succeed
• Entrepreneurs are innovators by default
These misconceptions limit understanding of what entrepreneurship truly entails:
Entrepreneurship only means starting a business from scratch
Many equate entrepreneurship solely with launching a new startup, but acquiring, turning around, or restructuring existing companies is equally entrepreneurial. My friend’s story illustrates this broader definition—reviving an undervalued business can be as innovative and risky as building a new one.
Entrepreneurs are born, not made
The belief that entrepreneurial talent is innate undermines the importance of education, experience, and deliberate practice. Data shows successful entrepreneurs often develop skills over time, through trial, learning, and mentorship.
Entrepreneurship is about big, disruptive innovations
While disruptive innovation gets headlines, much entrepreneurial success comes from incremental improvements, operational excellence, and market repositioning rather than radical invention.
You need a unique, never-seen-before idea to succeed
Many entrepreneurs succeed by refining existing business models, applying them in underserved markets, or optimizing distribution channels. Originality is not a prerequisite for profitability.
Entrepreneurs are innovators by default
Innovation is a powerful tool but not a requirement. Some entrepreneurs excel at resource management, strategic positioning, and execution, creating value without inventing new products or technologies.
This reality reframes my friend’s purchase. He did not simply buy a struggling company; he entered a space where the odds of survival were mathematically stacked against him. In markets with such failure rates, survival alone is notable. Turning a loss-making asset into a profitable business in less than twelve months invites a closer look at what makes certain entrepreneurs defy statistical gravity.
There are parallels in the corporate world. Consider Phoenix Labs in Ireland. Larry McGowan built the business by acquiring overlooked over-the-counter pharmaceutical brands, including Uniflu and Dioralyte, from large pharmaceutical companies. These were not new inventions but existing assets deemed non-core by their previous owners. Phoenix Labs’ approach was to focus on efficient distribution, brand stewardship, and targeted market penetration. In 2022, the company posted earnings before interest, tax, depreciation and amortization (EBITDA) of €22 million on sales of €39 million, after spending about €90 million on acquisitions in 23 countries. source: The Times UK
Such examples are far from the norm. Globally, only about 40 percent of startups are profitable, 30 percent break even, and 30 percent lose money. Even among those that successfully raise capital, approximately 75 percent never return the original investment to their backers. source: Zippia, DesignRush
The turnaround model is not unique to small or medium enterprises. In the mid-2000s, Apple acquired several struggling component suppliers not for their current output but for their patents and engineering talent. Those acquisitions played a role in the accelerated development of the iPhone supply chain. Similarly, in 2014, Facebook’s $2 billion purchase of Oculus VR was a bet on an underperforming but strategically positioned technology. While Oculus had yet to prove commercial viability, it gave Facebook a foothold in virtual reality ahead of competitors. source: Apple SEC filings, Facebook investor reports
These moves share a common thread with my friend’s case: success came not from creating something entirely new, but from recognizing the dormant potential within existing structures. This reframing is particularly important in markets where capital efficiency and speed to profitability are critical.
It is easy to talk about entrepreneurship as a mindset or a set of personal traits. The data suggests otherwise. If 42 percent of failures stem from lack of market need, then the most fundamental entrepreneurial act might be to select markets that already need the product or service, but are being served inefficiently. If 29 percent fail from lack of capital, then resource structuring is not just financial management; it is survival architecture.
This lens changes how one interprets business success stories. It also challenges the narrative that innovation must always be disruptive in the technological sense. Some of the most resilient businesses grow by finding stability where others abandoned the field. They operate in the space between statistical improbability and operational precision.
Final Note
Entrepreneurship is not exclusively about launching a startup from scratch. It is equally about identifying underused potential, acquiring it, and reorganizing it to meet existing demand more effectively. Many dismiss acquisitions of failing businesses as less impressive than creating a new brand, yet in markets where the majority fail within five years, orchestrating a revival may be the most advanced form of entrepreneurship. For executives, the challenge is to move beyond the narrow definition and recognize that the entrepreneurial mindset applies as much to renewal as to creation.
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Farhad
Hafez Nezami
Tech
& Sports Entrepreneur | Growth Strategist
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