The world is experiencing “startup time” where a month seems like a year. So, what advice can a serial entrepreneur give in this uncertain season of life?
People joke that March, April, and May 2020 were “long years.” It seemed like every day there was some milestone event that changed life on a macro and micro scale. Everyone has been impacted in one way or another, and it will take a long time for things to get back to normal.
As a serial entrepreneur who has worked in startups for my entire career, I know a thing or two about uncertainty and the speed of startup time. Today, the entire world is on this accelerated schedule, and for most of us, it’s unsettling. People tend to avoid change and are risk adverse. Yet entrepreneurs behave different. We live in a world where time speeds up. Where leverage and a vision for a new, better, and different world motivate us to take risks at warp speed.
Here are four ways that entrepreneurs adapt to this abnormal way of life (and, how you can, too).
Be an Adventurer
Entrepreneurs are not afraid of the journey into the unknown. We search for business models that create customer value. We build new things. We break things we just made and build again. Those in a startup know that every day has the potential for change. The next unexpected failure might cause us to pivot to a new business model overnight. We look for unexpected successes then do more of that (and less of everything else).
Working at a startup can be unsettling, for the direction can change without notice. As adventurers we know it is okay to be surprised (even if it means that all of the plans you had for the year have just dramatically changed). Working under such circumstances requires adaptation and letting go of the past. It is an adventure to create something new. It is also an adventure, although not nearly quite as fun, when the startup you’ve invested your time and energy in evaporates overnight.
Know That Failure Is the Most Likely Outcome
According to Shikhar Ghosh, a senior lecturer at Harvard Business School, 90 to 95 percent of startups fall short after declaring a projection.[1] Fear drives creativity. Startup founders know that time is of the essence. We have to succeed or fail quickly.
Until a startup becomes profitable, everyone involved constantly monitors a key performance indicator called the “Burn Rate.” For those of you not familiar with startups, the burn rate basically is a formula that takes into consideration the amount of money a startup has on-hand divided by their monthly expenses. Burn Rate is a morbid metric because if the startup runs out of time before raising additional capital or becoming profitable, then it will go bankrupt. Every hard decision made in a startup – from hiring to layoffs, marketing spend, product R&D – all are impacted by the amount of time available to succeed (or fail). As a result, most startups have the mentality to fail fast, so they have time to pivot while they still have enough resources to try again.
Founders are stubborn. We continue to start companies even though they are extremely likely to fail. Grit and determination are what help us to bridge the gap from where we started to where we need to go.
Control Your Growth
Most startups want growth. However, uncontrolled growth is a cancer that can destroy a healthy startup. Entrepreneurs mitigate these risks by focusing on the most important feature, product or service and ignore everything else. As taught by Michael Porter, Harvard Business academic, economist, and author, “the essence of strategy is choosing what NOT to do.” We can’t do everything, so we focus on what is most important for us.
Today we have new limits placed on us. We can let these constraints make us mad or we can appreciate them for helping us to narrow the possibilities. It might feel like someone else is in control when decisions are made for us. However, if you act like an entrepreneur, you get to choose what to do next. You’re in control of how you spend your day. You might not be in control of the resources you have, or the places you are allowed to go, but you are in control of so many things. Smart entrepreneurs study logistics. We know that while our tactics may change, based on the circumstances of the day, our growth is something that we control.
Trust Your Gut
Founders, and other leaders in startups, are frequently asked to make uncomfortable decisions with incomplete information on extremely short time horizons. We don’t have the time to schedule a series of meetings with various committees, debate endlessly, route through multiple approval gates, and eventually come up with a safe solution. We have to trust our guts.
When deciding on the “the most important feature,” entrepreneurs are driven by customer pain points. Most founders have great instincts about the most important features (that’s why they get ahead with limited resources and very little research) but if they can get them validated by customers, the risk goes down dramatically. That said, leaders in a startup have to decide quickly what features are critical, those that are essential, and what is classified as non-essential.
So much of life is how you approach it. Entrepreneurs, like me, tend to enjoy our busy days because we have the permission, and the resources needed, to build something new. It’s an exciting life, and when you are on a real adventure, time is less important.
If you learn these skills, you, too, can adapt to the uncertainty of today (and tomorrow). Welcome to startup time. Welcome to the adventure!
Paul Mobley (@paulmobley) is a serial entrepreneur, a builder and a fixer. Paul leads revenue and legal operations at Ephesoft, a tech startup in Irvine, CA.
[1] Nobel, Carmen: Why Companies Fail—and How Their Founders Can Bounce Back. Harvard Business Review. 07 March 2011.
Startup stock photo by Rawpixel.com/Shutterstock
