The 4th of July is a traditional time to reflect upon and be grateful for the freedom and prosperity of American life, culture, and its economy. American capitalism - the greatest wealth-creating engine in the history of the world - remains despite stresses - the envy of the world in its ability to encourage and reward innovation and new business models. From the airline industry to biotechnology to the Internet, the great growth businesses of the 21st century are led and will continue to be led by American business.

According to Dealogic, the value of tech companies waiting to go public has quadrupled -- from $1.1 billion in January 2006 to $4.7 billion in 2007. This build-up is being driven by a number of factors -- the NASDAQ composite index being up over 16% since May 2006, the number of filings by private tech companies being up 31% in the first 3 months of 2007 over the comparable period in 2006, and perhaps most importantly, the fact that technology IPOs in 2006 returned an average of 37% over their offering prices (renaissance Capital).

A great article on SmartMoney.com outlines the path to wealth of the majority of the nation's pentamillionaires -- those with net worths of greater than $5 million.

I recently read an excellent blog entry called Failing Cheaper, which discussed, among other things, the flexibility required by new ventures and the decreased amount of capital it now takes to launch a venture.

The entry begins by pointing out that some prominent recent ventures started out doing very different things. For instance, PayPal started out as a service to beam money through Palm Pilots. Likewise YouTube was originally a video dating site.

I recently wrote a post entitled Smugness Equals Entrepreneurial Opportunity that suggested that a business that acts smugly or arrogantly should be sending a welcome message to entrepreneurs to steal their customers from them.

Several years ago I attended a lecture given by a former Procter & Gamble executive. In his speech, he mentioned that a significant portion of households pre-wash dishes before putting them in the dishwashers. (I just found a 2002 Arthur D. Little, Inc. report that said that 15% of households pre-wash their dishes.) The executive smugly commented about how this was great for P&G -- they made money both from the sale of dishwasher detergent and dishwashing soap.

My son wanted to stay home from school the other day. He wasn't really sick; just wanted to stay home.

I asked him what he was going to do if he stayed home. The list went on and on -- watch this DVD, watch this show on Tivo, play this video game, etc.

Great article in the Washington Post today by Shankar Vedantam entitled "The Pain is Never as Bad as We Fear." Basic premise is that studies have shown that human beings greatly over-estimate the pain they think they will feel regarding a prospective future loss. For example, when it comes to money, people are much more able to emotionally "connect" with the pain of a hypothetical loss of a sum of money than they are to to connect with the pleasure/joy associated with a hypothetical gain.

A great baseball player will get out 70% of the time.

A great venture capital firm will fund companies which fail 70% of the time.

So what does this mean? It means that failure IS an option. If we are not prepared to fail, then we will never take chances; we will never try new things; we will never launch new ventures.

While we shouldn't plan for failure, and we should constantly focus on success, we need not be afraid of failure. Conversely, we should embrace the lessons that failure offers us - why did we fail? what can we do differently next time?