3 Reasons Businesses Fail and How to Fix Two of Them

Patrick McFadden • November 14, 2013

The U.S. Small Business Administration has seen lots of small businesses come and, unfortunately, go. According to the SBA, over 50% of small businesses fail in the first five years. Why? What goes wrong?

After a thorough review and much field research it was found that the failing businesses all had three things in common:

  1. Poor financial planning;
  2. Poor marketing; and,
  3. Poor selling skills.

And for most businesses marketing is indispensable, vital. If you don’t market the odds are your business will fail.

This Indispensable Marketing post will address two (marketing and selling) of these three reasons for business failure. So let’s take a look at them.

Marketing

“Marketing is everything. – Patrick McFadden”

Let me start by saying that marketing and advertising are not the same thing. They used to be, but they’re not the same thing anymore. Everything is marketing – the name of your business, products and services, how you comport yourself, determining whether you will be selling a product or service, how you run your business, the method of manufacture or servicing, how you bid on projects, the colors, size, and shape or your product, how you perform for clients and customers, the packaging, how you build relationships, the location of your business, the advertising, the PR, etc. You’re either judged on these things, or you’re being ignored.

Marketing is successful if it moves your product or service at a profit.  It’s a pretty big percentage of your success, much bigger than what most business owners think. Unfortunately, most entrepreneurs, business owners and leaders still think that if they can put together a wow ad they’ve got their marketing pretty much down. Not so. Advertising is only two percent of your marketing. Of course, it’s a very important, and fairly expensive, “two percent,” but it’s a small fraction of the other critical marketing tools and techniques.

By the way, many of the marketing tools and techniques will cost you nothing but time, energy and creativity. With the others, we’ll show you how to save loads of cash by being smart. For example, when choosing advertising as a marketing tool don’t ever be tricked by the myth of the ad rate card. Remember successful marketing moves your product or service at a profit, so never ever pay rate card rates. Advertising rates are negotiated – talked over. Now aren’t you glad you read this post?

Sales and Selling

Ultimately we are all paid because we are selling something.

“Sales” and “selling” are another indispensable part of your marketing. Again two percent of it. Selling refers to the face-to-face or telephone communication between you and/or your staff with prospects and customers. Sales or selling is not saying, “Hi, can I help you?” and, following the sale, “Have a nice day,” like so many small business owners think.

Selling in its purest form is simply communicating emotion and sharing enthusiasm.  If you see a great movie and tell 20 friends – you are selling.  If you go to a wonderful restaurant and then spread the word – you are selling.  We all get paid for sharing our enthusiasm.

What you need is to find something you are so passionate about that you want everyone else around you to experience the same benefits you are enjoying.

Unconventional marketing tactics will glitter the bottom lines of your small business. It’s less expensive and demonstrably more effective. It’s learning a bit more, it’s getting the edge , the x-factor. In today’s market, it’s winning by a photo finish. Nevertheless, Winning!

About the Author:  Patrick McFadden is a marketing consultant/coach for small businesses and midsize organizations. He’s also an  American Express OpenForum Advisor. He develops marketing plans and strategies for getting and keeping profitable clients using low-cost but effective marketing methods.

The Missing Layer in AI: Why Judgment, Not Just Data, Will Define the Next Era of Intelligence

By Patrick McFadden • May 2, 2025
Everyone is scaling outputs. Almost no one is scaling judgment.

Everyone Talks About AI Judgment. We Built It.

By Patrick McFadden • May 2, 2025
Ask anyone in tech where AI is headed, and they’ll tell you: “The next leap is reasoning.” “AI needs judgment.” “We need assistants that think, not just answer.” They’re right. But while everyone’s talking about it, almost no one is actually shipping it. So we did. We built Thinking OS™ —a system that doesn’t just help AI answer questions… It helps AI think like a strategist. It helps AI decide like an operator. It helps teams and platforms scale judgment, n ot just generate output. The Theory Isn’t New. The Implementation Is. The idea of layering strategic thinking and judgment into AI isn’t new in theory. The problem is, no one’s been able to implement it effectively at scale. Let’s look at the current landscape. 1. Big Tech Has the Muscle—But Not the Mind OpenAI / ChatGPT ✅ Strength: Best-in-class language generation ❌ Limitation: No built-in judgment or reasoning. You must provide the structure. Otherwise, it follows instructions, not strategy. Google DeepMind / Gemini ✅ Known for advanced decision-making (e.g., AlphaGo) ❌ But only in structured environments like games—not messy, real-world business scenarios. Anthropic (Claude), Meta (LLaMA), Microsoft Copilot ✅ Great at answering questions and following commands ❌ But they’re assistants, not advisors. They won’t reprioritize. They won’t challenge your assumptions. They don’t ask: “Is this the right move?” These tools are powerful—but they don’t think for outcomes the way a strategist or operator would. 2. Who’s Actually Building the Thinking Layer™? This is where it gets interesting—and thin. Startups and Indie Builders Some small teams are quietly: Creating custom GPTs that mimic how experts reason Layering in business context, priorities, and tradeoffs Embedding decision logic so AI can guide, not just execute But these efforts are: Highly manual Difficult to scale Fragmented and experimental Enterprise Experiments A few companies (Salesforce, HubSpot, and others) are exploring more “judgment-aware” AI copilots. These systems can: Flag inconsistencies Recommend next actions Occasionally surface priorities based on internal logic But most of it is still: In early R&D Custom-coded Unproven beyond narrow use cases That’s Why Thinking OS™ Is Different Instead of waiting for a lab to crack it, we built a modular thinking system that installs like infrastructure. Thinking OS™: Captures how real experts reason Embeds judgment into layers AI can use Deploys into tools like ChatGPT or enterprise systems Helps teams think together, consistently, at scale It’s not another assistant. It’s the missing layer that turns outputs into outcomes. So… Is This a New Innovation? Yes—in practice. Everyone says AI needs judgment. But judgment isn’t an idea. It’s a system. It requires: Persistent memory Contextual awareness Tradeoff evaluation Value-based decisions Strategy that evolves with goals Thinking OS™ delivers that. And unlike the R&D experiments in Big Tech, it’s built for: Operators Consultants Platform founders Growth-stage teams that need to scale decision quality, not just content creation If Someone Told You They’ve Built a Thinking + Judgment Layer™… They’ve built something only a handful of people in the world are even attempting. Because this isn’t just AI that speaks fluently. It’s AI that reasons, reflects , and chooses. And in a world that’s drowning in tools, judgment becomes the differentiator. That’s the OS We Built Thinking OS™ is not a prompt pack. It’s not a dashboard. It’s not a glorified chatbot. It’s a decision architecture you can license, embed, or deploy— To help your team, your platform, or your clients think better at scale. We’ve moved past content. We’re building cognition. Let’s talk.

We Found the Missing Layer AI Has Been Waiting For

By Patrick McFadden • May 2, 2025
In every era of innovation, there’s a silent bottleneck—something obvious in hindsight, but elusive until the moment it clicks. In today’s AI-driven world, that bottleneck is clear: AI has speed. It has scale. But it doesn’t have judgment . It doesn’t really think . What’s Actually Missing From AI? When experts talk about the “thinking and judgment layer” as the next leap for AI, they’re calling out a hard truth: Modern AI systems are powerful pattern machines. But they’re missing the human layer—the one that reasons, weighs tradeoffs, and makes strategic decisions in context. Let’s break that down: 1. The Thinking Layer = Reasoning with Purpose This layer doesn’t just process inputs— it structures logic. It’s the ability to: Ask the right questions before acting Break down complexity into solvable parts Adjust direction mid-course when reality changes Think beyond “what was asked” to uncover “what really matters” Today’s AI responds. But it rarely reflects. Unless told exactly what to do, it won’t work through problems the way a strategist or operator would. 2. The Judgment Layer = Decision-Making in the Gray Judgment is the ability to: Prioritize what matters most Choose between imperfect options Make decisions when there’s no clear answer Apply values, experience, and vision—not just data It’s why a founder might not pursue a lucrative deal. Why a marketer might ignore the click-through rate. Why a strategist knows when the timing isn’t right. AI doesn’t do this well. Not yet. Because judgment requires more than data—it requires discernment . Why This Is the Bottleneck Holding Back AI AI can write. It can summarize. It can automate. But it still can’t: Diagnose the real problem behind the question Evaluate tradeoffs like a founder or operator would Recommend a path based on context, constraints, and conviction AI today is still reactive. It follows instructions. But it doesn’t lead. It doesn’t guide. It doesn’t own the outcome. And for those building serious systems—whether you’re running a company, launching a platform, or leading a team—this is the wall you eventually hit. That’s Why We Built Thinking OS™ We stopped waiting for AI to learn judgment on its own. Instead, we created a system that embeds it—by design. Thinking OS™ is an installable decision layer that captures how top founders, strategists, and operators think… …and makes that thinking repeatable , scalable , and usable inside teams, tools, and platforms. It’s not a framework. It’s not a chatbot. It’s not another playbook. It’s the layer that knows how to: Think through complex decisions Apply judgment when rules don’t help Guide others —human or AI—toward strategic outcomes This Is the Missing Infrastructure Thinking OS™ isn’t just about better answers. It’s about better thinking—made operational. And that’s what’s been missing in AI, consulting, leadership development, and platform design. If you’re trying to scale expertise, install judgment, or move from tactical to strategic… You don’t need a faster AI. You need a thinking layer that knows what to do—and why. We built it. Let’s talk.
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