“Running a startup is like eating glass and staring into the abyss. Startups are really, really hard.” -Bill Lee
I founded my first startup company in the summer of 2006. I can still remember our excitement and anticipation when we secured a license on technologies from Clemson and started building our company from the ground up. We were blessed with early and sustained support from SC Launch, several grants from the National Science Foundation and investments from angel investors, many of whom were members of the newly formed Upstate Carolina Angel Network. The sun was shining, the birds were chirping and all seemed right in the world when we encountered our first looming chasm in the road ahead.
We were prepared to seek a venture capital investment round at the moment the U.S. economy entered the teeth of the recession. Late 2008 was bad but early 2009 was worse. The Dow just kept falling and most risk capital fled the markets. The stress of trying to save our business from starving for capital was immense. We narrowly escaped going out of business by attracting the attention of a British diagnostics firm, who acquired our business a few months later in a stock transaction. To make a long story short, the leap to this transaction allowed us to continue our journey and to realize a nice exit several years later.
Happy endings are what we all strive for, but running a startup—even outside the throes of a recession—is always very risky. Odds are, a startup launched today will fail. In fact, most venture-backed companies don’t return investors’ capital. The potential for failure looms large in the mind of the entrepreneur when faced with making decisions based on incomplete information. But an entrepreneur must make decisions while there is still a chance to seize opportunities. King Solomon spoke to this problem in Ecclesiastes 11:4 when he wrote “He who observes the wind will not sow, and he who regards the clouds will not reap.”
Sometimes the entrepreneur will be called on to make a “fork in the road” decision. The beauty of this decision is that it allows at least possibility of a pivot. A pivot is when the entrepreneur sees that a particular plan is not working as expected and acts in time to take a different route towards success. Eric Ries, the creator of the ‘Lean Startup’ methodology, says that pivoting requires keeping one foot firmly in place as you shiftthe other in a new direction.
On the other hand, on occasion the entrepreneur will face a “chasm” decision. One which is hard to unwind. While entrepreneurs are often thought to seek risk, successful serial entrepreneurs seek calculated risk – leaping a particular chasm when there is a good shot at landing safely on the other side. Regardless, when the status quo is not sustainable, the entrepreneur must find some way forward.
Dr. Martin Luther King, Jr. once said “If you can’t fly then run, if you can’t run then walk, if you can’t walk then crawl, but whatever you do you have to keep moving forward.” This type of determined tenacity is the most important characteristic of an entrepreneur.
Still, it is important to differentiate between tenacity and pigheadedness. The first helps you get up when you’ve been knocked down—repeatedly; when you are eating glass and staring into the abyss. The second is in view when you choose to ignore your team and mentors to push forward with a “damn the torpedoes” approach. The funny thing is that no one will know which term to use to describe your decision making until the smoke clears.