Hard work, success, wealth, investments, fast cars, country and estates houses, private jets, yatchs and pretty wives.

Debt, mounting worries, fear, court proceedings, death threats, bankruptcy, prison, suicide, solitary confinement.

It’s a very thin line. 

To succeed in business, entrepreneurs require courage, take risks, vision and they must have complete confidence in themselves. To fail in business, that courage becomes foolhardiness, the risks become disproportionate, the vision loses focus and the confidence becomes arrogance. And there is not a lot between the two.

More often than not when we discuss entrepreneurship, we always refer to the bright side of the career, we always talk about the successes, the accomplishments, we always refer to those who succeed and we always ask them how they did it. It’s important to learn from such successes, because it gives us the recipe of how to succeed in business. There are no end of books on entrepreneurship successes and a myriad of self-help books: how the entrepreneur made his product/service offering became the world’s best seller, how that entrepreneur made his career defining decisions which generated billions of rands in revenue. Of course people want to know how other people have done it and if the success can be replicated. 

In her presentation “The Good, The Bad and The Ugly of Entrepreneurship” Lebo Pule cautions that most of the time we tend to talk about the Good of Entrepreneurship, we seldom talk about the Bad of Entrepreneurship, and we hardly talk about the Ugly side of entrepreneurship. How often do you hear entrepreneurs respond to the question of “how are you doing?” by saying “I’m struggling”, or “I’m getting bankrupt”. Being optimists by nature, entrepreneurs seldom respond to such questions by being honest, they would rather paint a positive picture, create an impression that their ship is sailing in the right direction, even when the truth is that their Titanic has hit an iceberg.

The purpose of the article is to highlight the mistakes that once successful entrepreneurs have made which led them to failure. It is about how entrepreneurs went from hero to zero – and how they managed to blow it in the most spectacular manner possible. The foundation of this article is that the best way to learn is from mistakes and it has been said that the definition of intelligence lies not in making mistakes, poor decision or bad judgements – it lies in not repeating them. Warren Buffet says “In the business world, the rear-view mirror is always clearer than the windshield” 

Just how do entrepreneurs manage to blow it:

1. Lack of focus and growing into unknown business territories

Successful entrepreneurs have the vision to build great and sustainable businesses. When they start their businesses, they are focused. The difference between those who continue to be successful remain focused on what they are good at. Those who lose it are those who lose focus and venture into industries they know nothing about. Bill Gates once said “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.” Entrepreneurs more often will build successful brand based on their skills and expertise and they then believe that they if they have succeeded in one business area, they can replicate the process in another business areas with equal success. They then venture into an industry they know nothing about where they lack experience and/or expertise. In their grandiose dreams to leave an ever-lasting legacy, entrepreneurs end up purchasing disparate, unconnected assets and businesses. They move from deal to another at such rapid speed that they don’t focus on integrating their acquisitions into the bigger company and building a corporate culture that ensure that synergies are realised throughout the acquisition spree.

Multi-millionaire IT recruitment entrepreneur Mark Goldberg fulfilled his childhood dream of buying a London based Crystal Palace Football Club. His dream was for his club to compete in the top flight European League, alongside the likes of Arsenal and Manchester United. Mark was passionate about soccer, he played at a young age but never made professional level. He then focused on building his IT recruiting company. As a fast learner he was able to build his IT recruitment company to multi-million dollar empire. As his wealth grew, he invested some of it in his favourite football club, Crystal Palace. By December 1997 he had 3 million pounds worth of shares, a seat on the board, and was an “active, enthusiastic director” of the club. He also believed that he could use his business acumen to make Palace, as it is known to its supporters, one of the most successful football clubs in the land. It was a classic error of judgement: applying sound principles from one business or sector to a completely different industry. Ultimately due to bad football decisions the club was relegated from the Premier League, finishing bottom of the table. Goldberg was spending is hard money on the team like water, and it could not and would not continue, the relegation proved to be expensive for the club, loss of television rights, sponsorships, radio revenue, gate takings plummeted, it was financial Armageddon loomed.

Many entrepreneurs fall into a trap of believing that because they are successful in one field they could easily transfer those skills – and business acumen – to any other area of business. But while this approach may have worked for the likes of Virgin founder Richard Branson, and no doubt makes for an interesting term of study on any MBA program, there are only few Bransons – and business theory and business practicality seldom mix.

The miracle of wealth creation often lies in its mundaneness. Stick to running what you know and keep doing what works.

2. Being in denial and unrealistic about the business challenges

In many ways, the characteristics required to become an entrepreneur can end up pushing people over the edge. In the beginning, entrepreneurship can be a very lonely journey and in such instances entrepreneurs have to take themselves very seriously and give themselves an air of credibility. They become very good actors. It is a fine line between bluff and deceit, between confidence and arrogance, between entrepreneur and con man. Entrepreneurs undoubtedly start to believe their own publicity and believe their own hype. 

Once the business grows, most entrepreneurs get bored by the business, by the details and prefer the upmarket lifestyle, they fall into a trap that a lot of successful entrepreneurs falls into. They enter into dubious business transactions and in the process get mixed up with shady people who deflect their attention from what got them where they were in the first place.

As the businesses grows, the entrepreneur’s reputation grows and his financial credibility get established. With the ability to raise funding, the entrepreneur would borrow R30 million, buy a business and sell it three years later for R100 million, and everyone is happy. Debt used astutely, judiciously and with insight is not a bad thing. Entrepreneurs have been able to build their empires using debt. When one business succeeds, they move to acquire another business in the process being oblivious to looming economic and financial recession. Their growth and prosperity makes them feel that they are invisible. The amount of leverage in the business is too much, the business plans are ill-conceived. The mistakes are about an entrepreneur having little bit too much self-belief and far too much debt. Money has a way making people feel that they can solve any problem they encounter. Its in this instance that when they are unable to repay the bank, or when they have not being paying their taxes that when SARS issues them with huge tax bill, in retrospect, the warning signs were always there, they were flashing red, 80 storey high and flashing “danger” but entrepreneurs feel they can use their millionaires to buy their problems away, buy the tax man or buy the politician to make their tax problems go away. Some even feel they can tell off the banker just to buy time for the loan repayment until their businesses turn around and start repaying the loan. 

3. Mixing business and politics

In other countries, it becomes a thin line between business and politics. Entrepreneurs will often build their business by acquisition of strategic state assets (usually due to privatisation) through political affiliations. This is what happened in Russia when the oil once under the control of the government was privatised and resulted in a number of oligarch (millionaire’s from owning oil companies). The nature of politics is that political leaders tend to change once every four or five years due to elections. Reliance by entrepreneurs to politicians is based purely on power relations, influence and favours. Should the political leader(s) be changed due to the elections, that relationship between entrepreneur and the political leader changes. More often the incumbent political leader will come with his own favourite business people to “empower”. The sustainability of the business transaction is dependent on the positive relations that the entrepreneur has with the politician and more often such relationships are not sustainable. Worse case scenario there are cases of bribery and corruption that always lurks such relationships which will result in criminal cases and jail-time.

In Russia, Mikhail Khodorkovsky the owner of Yukos and once a multi-millionaire oil mogul is serving a jail sentence mainly due him falling out of favour with the incumbent president Vladimir Putin. Khodorskovsky had a good relationship with the then Russian president Boris Yeltsin and used his connection during the privatisation of Russian oil to acquire oil mines. When Yeltsin’s presidency ended abruptly, Putin took over. Putin had made it abundantly clear to this new breed of oligarchs: do business or do politics, but whatever you do, do not do both. Those who did not heed Putin’s advice, including Khodorkovsky did not finish well. Some fled the country and others in jail. 

As an entrepreneur, your success should not create an impression that you can mix business and politics and get away with it when trouble brews. As an entrepreneur there is a fine line between self-belief and delusion, and keeping on the right side of that line is what all great entrepreneurs managed to do. The successful ones convince themselves (and others) that they are better, smarter, more cunning, more visionary or most astute to have, but it also puts them on a collision cause with self-destruction. Without a brake on that self-belief – or a rational mind to balance the bravado – entrepreneurs are doomed.

4. All that glitters is not gold

The rise and fall of many entrepreneurs is all too common a story we have heard and seen repeatedly. Too many instant entrepreneurs get to be the limelight. They hog newspaper headlines, they are seen in the A-List of top parties and events. The drive expensive cars, wear expensive designer clothes, go to expensive holiday destinations occasionally, they are the envy of society. Being from an ethnic group and being wealthy can rapidly take you to the very heart of the celebrated people and result in reams of positive press coverage. The fall will show how fickle a mistress the media can be, and that ultimately all the glitz, glamour and perceived opulence in the world is not replacement for sound business planning and hard work.

Many celebrity entrepreneurs enjoy the limelight. It is part of the personality of entrepreneurs to want to show the world what they are made of. Psychologists might argue that this self-justification, or self-glorification, is part of an inner insecurity and inferiority complex. Others would say it is simply part of having a very big ego.

The media are a double-edged sword. They are looking for stories, head-lines and angles. If someone new comes along, someone young, successful, wealthy, it is little wonder the press trip over themselves to put that face on their covers. But it comes at a cost. As soon as business people court the media, they need to watch out. And if they are up to no good, they should not court it at all.

5. King Kong Ego

Entrepreneurs start their business from nothing, from humble beginnings they work extended hours, sacrificing their family time, personal time. They build their businesses to become this big conglomerate. It is the sort of widely acclaimed track record of success that makes people believe they can do no wrong. The more it continues, the more unquestioning people become of the leader, whose position become impregnable. This is the moment where the entrepreneur develops a King Kong ego.

Entrepreneurs certainly talk a good game. Many are quoted in business magazines talking sense and being successful. Why would anyone want to question them, after-all these are successful entrepreneurs who worked to be where they are. Entrepreneurs in such positions tend to ignore advice from their colleagues and team members, they tend to think that the business is to where it is because of their own bravado and no one else, so they tend to believe they are the smartest person in the room. They ignore advice from anyone else. 

Entrepreneurs are always full of advice they dish out in their media interviews, they dish out advice to their staff members and anybody who cares to listen, it is therefore important that they take their own advice. 

6. The Art of Money

More often when entrepreneurs succeed, they tend to develop expensive habits which they never had before they were successful. Suddenly they have a penchant for expensive art collection, collection of expensive cars, collectors items, play expensive sport like polo and hunting. More often it is not the hobby or the expensive nature of the hobby that is the problem, more often it is the exorbitant amount of money and time that is invested such hobbies that destructs the entrepreneur from his business.

Mostly the reason for such expensive hobbies is because entrepreneurs tend to compare themselves with others, possibly wealthier, or more successful, people in their peer group. It is a defect that, while driving growth, almost predestines people to ultimate failure.

Successful entrepreneurs are not superhuman, they are ordinary people who have certain traits that makes them successful. 

One thing most of entrepreneurs have in common is something of a chip on their shoulder about who they are, and where they came from. Yet while proving themselves can be motivational force that pushes them to succeed, at one point someone needs to put an arm around their shoulder and say, ‘It’s over, you’ve won. Stop fighting to prove yourself.’


The lessons to learn from all this is that no one is immune from financial ruin, no one is spared from the tsunami of bankruptcies that have spread from coast to coast, across national boundaries and permeated event the most hallowed, revered bastions of capitalism. It proves the thesis of capitalism: it respects no one and does not discriminate in favour of or against race, colout, ethnicity, gender or religion – or the previous size of a bank balance. If you fly too close to the sun, just like Icarus, you will fall into the sea and perish.

Take heed – and try not to blow it.





Jamie Oliver and Tony Goodwin (2010) – How They Blew It, Kogan Page, London 

Lebo Pule (2010) – The Good, The Bad and The Ugly of Entrepreneurship presentation

BBC, (16 June 2004, 27 July 2004, 31 May 2005, 1 June 2005, 20 October 2005)

http://www.slate.com, 29 October 2003

The Economist, 11 December 2008

HM Treasury, http://www.hm-treasury.gov.uk/press_210_99.htm, 9 December 1999

Auletta, K (1987) Greed and Glory on Wall Street: The Fall of the House of Lehman, Penguin, London

British Friends of the Art Museums of Israel, http://www.bfami.org


Trouble for MTN in Iran and Nigeria: http://www.bdlive.co.za/articles/2012/01/09/trouble-for-mtn-in-iran-and-nigeria

Sanyati to be liquidated: http://www.fin24.com/Companies/Industrial/Sanyati-to-be-liquidated-20120711

The Wrath of Putin: http://m.vanityfair.com/politics/2012/04/vladimir-putin-mikhail-khodorkovsky-russia

Bill Gates quotes – Brainy Quote

Warren Buffet quotes – Brainy Quote


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