September 22, 2014

You Didn’t Build That, You Were Just Lucky

Just when it looked like President Obama’s now famous “if you’ve got a business, you didn’t build that” line was history, the President decided to clarify his remarks to a Norfolk, Virginia television station. He said, “Obviously, I have regrets for my syntax. But not for the point, because everyone who was there watching knows exactly what I was saying.”

american businessman

If we look at the context in which the President made his remarks, we can see that he meant that entrepreneurs don’t succeed by their efforts alone; others, including the government, made their successes possible by building the infrastructure that they drew upon to succeed. Back in July he said, “If you were successful, somebody along the line gave you some help …. Somebody helped to create this unbelievable American system that we have that allowed you to thrive.”

The Republicans have jumped on the opportunity to paint the President as anti-business with the repeated sound bite “you didn’t build that.” While it’s great for politicians when they can attack their opponents with line that fit on a tee shirt, the Republicans are oversimplifying their philosophical disagreement with the President. While it takes more space to highlight the Presidential candidates different philosophies about the source of small business success, those differences are stark, and it’s important to highlight them.

Anyone thinking seriously about why some small business owners are more successful than others realize that there is merit in President Obama’s July comment. He’s right when he says, “if you’ve been successful, you didn’t get there on your own. There was a great teacher somewhere in your life…. Somebody invested in roads and bridges…. Government research created the Internet so that all the companies could make money off the Internet.” Whether you are a trucking company founder who benefited from the country’s transportation infrastructure ; an Internet entrepreneur whose company drew upon the nation’s investment in the ARPA net; or a hardware store founder whose third grade math teach taught her the basic skills necessary to later manage cash flow, everyone who runs their own company somehow benefited from the actions of others.

But the nation’s infrastructure is available to all of us. It is there for people who didn’t start companies and people who started them but weren’t successful. So how do we explain why some Americans are more successful at starting businesses than others? One way is to say that some people are smarter and work harder than others.

President Obama doesn’t think it’s that. Back in July he said, “I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there.”

This view puzzles me. If so many people are smart and hardworking, like the President says, and we built this great infrastructure that contributes to the success of entrepreneurs, then why isn’t everyone an equally successful entrepreneur? It seems that the President believes the answer must be luck.

The Republicans disagree with this philosophy. They don’t deny that the system in which we operate helps entrepreneurs to succeed. In fact, they think that it’s very important to provide the right context – good legal system, effective capital market, and an absence of onerous and arbitrary regulation – for small business owners to make money. But they recognize that some people are smarter and work harder than others. And that intelligence and hard work allows them to get better outcomes than others who also had great teachers and who lived in a country where the government built roads and bridges and funded the Internet.

The difference here isn’t in the stark contrast of the sound bites, but in the subtlety of emphasis. It’s a question of what matters more to the success of certain American entrepreneurs: the “unbelievable American system that we have that allowed [them] to thrive,” as the President describes it, or their intelligence and hard work?

I think you know my answer. When it comes to explaining entrepreneurial success, I believe that differences between people matter more than the President thinks.

American Businessman Photo via Shutterstock

9 Comments ▼

Scott Shane


Scott Shane Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool's Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.

9 Reactions

  1. Good take on the, “syntax,” Scott.

    When I was in automobile franchising, the owner of the store once told me this, during a discussion of success:

    “Joel, I’d rather be lucky than smart.”

    All of us need a bit of both to succeed in this fast-changing world.

    The Franchise King®

  2. While I understand what you’re trying to say I think you chose an unfortunate back story to tell it. Maybe you should watch Jon Stewarts segment where he shows Romney at a speech saying almost the same thing?

    http://www.thedailyshow.com/watch/wed-july-25-2012/democalypse-2012—do-we-look-stupid–don-t-answer-that-edition—grammatical-gaffes

    It comes at the end.

  3. Hi Scott, I agree with the sentiment that small business owners are doing something unusual that can’t be repeated by most, and the President isn’t giving anywhere near enough credit. Thanks for that.

    However, for those who would suggest that the President’s comments were just taken out of context and that this wouldn’t be an issue but for Republicans — it does business owners a terrible disservice. Small business owners are angry and feel stung by the comments, and that feeling isn’t going away. Pieces like this give a different side of the story:

    Why Saying “You Didn’t Build That” Stings Start Up and Solo Lawyers.

    Many business owners that I talk with say it wasn’t that the comments were taken out of context. Rather, they believe the President made a telling Freudian slip. As the Editor of Slate notes, it’s not what you meant but what you conveyed that matters:

    “Obama’s words contain an undertone that business owners are selfish, that they are ungrateful toward those teachers who helped them along the way. And that is where Obama’s misunderstanding of small business, real or perceived, shines through.”

    Or as our editorial team noted here on Small Business Trends BEFORE the Republican convention, the President has a deeper problem with small business owners. Small Businesses Continue Saying: Yes, We Did Build It!

    Business owners are smart enough to understand contempt when they hear it, and they are smart enough not to be manipulated by those “mean nasty Republicans.” Come on, give us credit — we think for ourselves and don’t let ourselves manipulated by politics, and those who suggest it are adding fuel to small business resentment.

    – Anita

  4. In fact, smart and hardworking are as much pre-requisites for success as all the infrastructure and preparation. But of course luck plays a role. If you don’t know entrepreneurs who are hardworking and smart and who still have failed to find success in their efforts, you need to get out more.

    My observation is that most people who don’t believe there is some element of chance in success are successful themselves, and hang out with other successful people. Of course everyone wants to believe in themselves and there is no reason not to. But it’s not necessary to assume that people who haven’t met with as much success are less intelligent or more slothful.

  5. Good day:

    President Obama’s entire career has been built on the premise the government can solve all answers.

    As such, President Obama comes across as the government needs to be large enough so that it can solve more answers.

    That takes higher taxes; and it means wealth redistribution.

    Tax it from those that really did earn it, so that entitlements can be handed out left and right.

    If a business didnt’ build it, then that means someone else owns it.

    Thank you.

  6. Avoiding political perspective, I feel that successful businesses need healthy doses of intelligence, hard work AND good luck. However, remember that luck is a two-edged sword.

    Ask John Stockton and Karl Malone. They had a championship caliber team in Utah but were unlucky that Michael Jordan had a better team at the exact same time.

    Ask Ryan Lochte or other competitors in events that Michael Phelps swims. They’re often better than any previous swimmer in the world, but not better than Phelps.

  7. With out stating any political views, my view on business owners is it takes a different kind of person. One that is willing to go the extra mile and take the risks associated with building a business. The great thing about America is we currently all have that opportunity.

  8. The Presidents remarks went deeper than we thought. He has made it clear that he doesn’t totally respect the private sector, unless he is raising campaign money. I had good teachers along the way and I thought I paid for those roads, so I did earn it. To also say the government “allows” us to be successful flies in the face of our history. Government doesn’t allow me to do anything. We allow government to exist. The politicians work for us, not the other way around.

  9. Amen Kip! Like the somewhat incoherent Clint Eastwood said at the convention, “You own this country. These people work for you.” The entire philosophy that the government owns money, for instance, instead of being stewards with the people’s money, flies in the face of the country’s founding, yet 99% of all Washington bureaucrats believe it is the government’s money. That’s why it’s so easy to be charitable and generous with other people’s money. I’m liking Anita’s remarks about what the statement, regardless of context, says about the man in Obama and what he really believes.

    On the luck side, of course there is some, and Robert’s 2 sports examples are the EXACT ones I use with regard to being born under a bad sign and being the 2nd best when legends dominate the landscape. You can add any AFC East football team in the last 10 years during the Brady era. However, these examples are fewer and farther between for most of us, specifically because there is only one gold medal or Super Bowl, but there can be MANY stellar successes in sales, business, etc. and those people have the extra IT factor to get it done in their own universes.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>



Compare your business to the industry - Try our new tool