Have you ever fantasized about creating something? Maybe it was a vintage car restoration, re-creating a beautiful sunset in watercolors or even cooking a delicious feast. More often than not, the final product doesn’t do the fantasy justice. What defines us as individuals is how we react to the creation. Do we discard the creation due to disappointment? Do we risk work burnout and try to push the widget even though it’s apparent that it will never meet our expectations? Or do we accept the sub-par creation with the perspective that it was a learning experience that taught us what we can do better next time?
Every entrepreneur is eventually faced with this dilemma. You’ve heard it before but I’ll say it again, 9 out of 10 startups fail. You have those who effectively give up because nothing worked out as they envisioned. Then there are those who become obsessive in essentially trying to fit a square peg into a round hole. They refuse to give up on their vision despite encountering objective data that explicitly says their business plan won’t work. Finally, there are those who recognize and accept the flaw(s) in their original plans and attempt to pivot their strategy based on what they have learned.
What differentiates the third group from the first two besides better odds of success? The third group never fell in love with their product. While this concept might seem counter-intuitive to most, it is actually the biggest key to success one can possess. All too often the product you attempted to built your company on is not the product that becomes your golden goose. That’s not to say that your first product won’t be profitable. Short-term profits are great but where there are profits there is bound to be competition. When there’s competition, margins get squeezed and growth, effectively represented by perpetual profits, requires outside the box thinking. Don’t interpret outside the box thinking to mean you have to jump ship and find a completely new and different product. The best form of this in business is making inferences from data obtained and using it to devise a pivot strategy that is still within your wheelhouse of execution.
Obsessive or Delusional
This topic reminds me of the book Bad Blood by John Carreyrou which chronicles the rise and fall of Elizabeth Holmes, founder of the startup Theranos. She was a prime example of the second group, mentioned earlier. She had her mind dead-set on inventing a machine, roughly the size of a desktop computer, that could run all sorts of tests on a couple drops of blood collected from a mere finger prick. It was such an easy idea to sell because, if you ignored the feasibility of the technology involved, everyone could see how this invention would revolutionize the world. Treatments could be optimized by allowing patients to test their blood in real-time from the comforts of their own home. This hype, coupled with Holmes’ charisma, gave her the ability to raise hundreds of millions of dollars in funding. Theranos at its peak employed over 500 people. The problem was the technology didn’t exist and no one, except funds involved in the healthcare device, did adequate due diligence.
Scores of engineers told Holmes from the start that the device could not be built. Instead of taking their expert opinions into account, she fired anyone and everyone that disagreed with her. She became delusional that she could make this impossible feat a reality. So much so that she actually permitted over one million patients to use her faulty device to base medical decisions on. There were plenty of opportunities along the way for her to make modifications to the design that could have brought its accuracy to within industry standards. Unfortunately, she was whiskey bent on keeping the device small, which ultimately lead to her demise.
All in all, you should now have a better understanding of how management and one’s love affair with their startup product must have an evolutionary element to it. The first group fizzles out because they are ill-equipped to persevere through failure. Those who refuse to accept failure eventually go one of two routes, they ‘fake it until they make it’ or they succeed by adapting to what they’ve learned through effective leadership.
Article written by Vaughn Pourchot