Why Do So Few Companies Break Through?

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For the past five years I've been trying to figure out why it is so hard to keep a company growing. Despite all of the conventional wisdom about America's entrepreneurial culture, the fact is most companies start small and stay that way.

Don't believe me? The picture below is of Texas Stadium, home of my beloved Dallas Cowboys (I grew up in El Paso -- the part of the state that many Texans deny exists). If the population in Texas stadium (65,000 and change) were used to represent all American businesses, how many people in the stadium would represent American companies that achieve annual sales of $250 million or more (a relatively small-sized company, to be sure)?

See that red dot in the picture? That's a section of the stadium that all American companies with sales of more than about $250 million could fit in -- 65 people. Roughly one in a thousand U.S. companies achieve sales of $250 million.

Five years ago I set out to discover what enables that tiny fraction of companies to "break through" the entrepreneurial stage of development. I interviewed more than 1,500 people on four continents and analyzed the financial performance of more than 7,000 companies -- every company to make the Inc. 500 since Inc. started publishing the list in 1982. The experience ended up being the most important educational experience of my life -- more important than taking doctoral classes from Peter Drucker or running a business for Microsoft. I learned that much of what people had told me about growing a business is just plain wrong. In this blog, I hope to share much of what I've learned -- and what I continue to learn every day.