Chapter 3 continued
(Draft of John's new book: Your comments are welcome)
Risk triggers emotions that fuel people determined to build and ride their startup bicycle.
Startup people respond in special ways to emotions. Giant corporate managers differently to the same emotions. Understanding the differences is central to life or death of a startup leader.
Serial entrepreneurs accept what happens during the wild ride on the startup bicycle. No, they are not fatalists. Rather, such people realistically accept that the outcome of the startup is unknown. That is part of the adventure, one aspect that makes the ride worth doing. Veterans respond constructively to surprises, good and bad. They do not panic about how to gently bring the bad news to the board of directors. They jump into action to accept that the forecast was off by a factor of three and start tactical changes immediately to get the best out of the surprise.
I am often struck by how calmly I listen to a CEO say “We decided that route was death for us, a dead end. But I have some good news. Our technical staff has come up with a way to deliver the product in a fraction of the time via the major social networks. We’ll get more people that way sooner, get their attention and then migrate them to be more eager to download our larger high performance platform.” And so another business model is trashed on the spot and the new one immediately pursued. There is no screaming about missing forecasts or not delivering on plan (as would happen in large public corporations). The board discusses the major shift, recalls others they have seen succeed with similar moves, and then agree on the new route. Calm deliberation prevails.
The first time a founder realizes his plan needs to be abandoned he will feel terrible. Emotions such as failure and doubt will jump in, often paralyzing making the big decision. That gives his more experienced competitors an advantage. It is dubbed “flexibility” by professors of entrepreneurship. Practical observers call it “chaos”. Such conditions trigger waves of intense emotions to the inexperienced.
The experienced startup manager also accepts calmly inevitable events. For instance the leader realizes he is not going to be able to prevent his key engineer from leaving. First timers feel a sense of panic. Veterans know they have worked hard to try to save the valued employee but they can do no more. They accept the unfortunate situation and swing into action to find a solution for the soon-to-be missing talent.
Acceptance is managed by getting in touch with reality as soon as possible. When you realize the investors want a new CEO you do not fight that stinging reality even though your first emotion says you should. Great personal losses trigger huge emotions. That energy can be translated to a constructive response and useful action. Wise founders stand up to help recruit a new CEO. Denying reality just delays the inevitable and adds risk of failure to the new enterprise.