You don’t really learn until you’ve studied both success and failure. I’ve had the privilege of being around a lot of winners in my career. But I might have learned more from the failures – including a few of my own.
- Capitalism 101. This is rampant with the over-educated entrepreneur with a corporate background. Unless they receive other influences, they are taught that capitalism is just an economic model. Then they get a corporate job and the paychecks magically appear every two weeks. If/when they take the plunge in to the start-up pool, they often are surprised to find that capitalism is economic REALITY; that capitalism is the math used by markets, investors, etc. In short, there has to be a transaction. No transaction, no business model. So to prevent “Solyndra Syndrome”, you need a sustainable revenue model fueled by a market that wants to buy your product.
- Failing to Prepare for Failure. Mike Tyson once said “Everyone has a plan until they get punched in the face”. Those “punches” usually come from a funding source not coming through – or the market not responding the way you thought they would. Mature entrepreneurs prepare for failure by hiring people that can take a punch, building flexibility in to the business / revenue plan and by building scalable products that can quickly adjust to the market’s response.
- No Shared Risk. You’d be surprised how many so-called entrepreneurs don’t invest in their own ventures. Unless you have a few successful start-ups under your belt, being an entrepreneur is a game of all-in. When it’s your money (or house or 401k) at risk, you will behave differently. You will watch expenses, you will have a budget and you will be extra choosy about who you hire.
- Lack of Conviction. Do you believe? I don’t mean “are you delusional?”. I mean do you absolutely believe that the idea you are taking to market is viable? This conviction is what will keep you warm at night (hat tip to the movie “Red Dawn”). It prepares you to handle #2. It prepares you to hear “no”. It’s hard to do that if you have to keep re-reading your own business plan to remind yourself why you are doing this.
- Working Too Hard. Consider blocking sleds in football practice. Hitting the blocking sled is already hard work, but they are designed to be even harder if you use sloppy technique. Small business ownership, start-ups, etc are like hitting the blocking sleds – a lot of simply just grinding away and doing the dirty work necessary to make it all work. Don’t make it harder by getting lazy or sloppy – or by over-working yourself. If it seems extra hard, stop, take a break and check your technique.
A final thought …