The purpose of this book is to dramatically improve your odds of en-trepreneurial success and enjoyment whether you aim to build athousand-person venture or a solo consulting practice. It springs frommy quest to understand what differentiates successful ventures fromthe large percentage of startups that disappoint.
In 2007, I set aside my work with large corporate clients to undertake a study of entrepreneurial success factors and work exclu-sively with early-stage companies, in which I took an ownership stake.I had solid experience to draw upon, having launched a successfulconsulting business, helped a favorite client turn a blank sheet of paperinto a $100 million company, and worked to improve the performanceof scores of management teams and a thousand executives over twodecades.
As I closely studied the entrepreneurial process, I came to under-stand that the “secrets” of startup success are not so secret, and notdifficult to grasp. The fundamentals that distinguish healthy ven-tures—principles such as understand your market, know your num-bers, get adequate funding, stay flexible, and manage by fact ratherthan assumption—are well understood by shopkeepers all over theworld. But for some reason, many entrepreneurs overlook one or moreof these fundamentals, severely undercutting their odds of success.
So I turned to a deeper set of questions: Why do so many entre-preneurs fail to take care of the basics? Why do extremely smart peo-ple rush to risk everything on untested business ideas? Why do somany founders underestimate their money needs, adopt pie-in-the-sky sales projections, or miss early signs that things are off track?
Most ventures are driven by passion and belief. Most fail.
Taken together, these statements are hard to reconcile, until weconsider the possibility that entrepreneurial passion and startup fail-ure are somehow tightly linked. Could the legendary commitmentthat drives and energizes so many entrepreneurs be the very thingthat leads many of them astray? The more closely I observed the earlychallenges and choices of would-be business owners, the more clearlyI understood how passion plays a powerful and central role in venturesuccess and failure.
Drive, determination, fire, belief, optimism, courage, confidence, commit-ment, certainty, and faith—these are the forces that animate a new busi-ness and fuel and sustain entrepreneurs through the ups and downsof the new venture pathway. Each of these qualities, however, whenmagnified or misdirected, can lead to unhealthy business behaviors—to rose-colored forecasts, to unwise commitments, to inflexibility inthe face of new data, or to a catastrophically bad fit between afounder’s skill set and the needs of the new business.
It doesn’t have to be this way. The good news is that you, as afounder, do not have to choose between passion and reason. You cando what you love and put the full force of your commitment behindyour idea, while successfully navigating well-known startup chal-lenges and minimizing inherent risks. This book is designed to helpyou do just that.
Who Should Read This Book
This book is for:
- Aspiring entrepreneurs who are passionate about a business ideaand want to dramatically improve their likelihood of success.
- Existing business owners or founding teams who want to improvethe performance of their venture and their happiness in lead-ing it.
- Investors looking for better ways to distinguish winningfounders and ventures from the rest of the pack or who wantto educate startup teams on the dangers and opportunitiesassociated with entrepreneurial passion.
- Entrepreneurship educators and service providers who want a toolto help their students and clients understand the upside anddownside of entrepreneurial passion.
- Anyone who wants to understand what happens when a personfalls in love with an idea and how to best bring the idea tolife in a healthy, profitable way.
What Is in This Book and How to Use It
- Part I of this book presents and explores its underlying premise: En-trepreneurial passion is a double-edged sword, bringing value as wellas danger.
- Chapter One explains what happens within and around aperson who commits to the entrepreneurial leap. Why is thestartup path so compelling to so many? What causes newfounders to become emotionally attached to their ideas, toliterally fall in love with their businesses?
- Chapter Two introduces a central concept that every enthu-siastic entrepreneur should understand: The passion trap, apattern in which new founders become blinded and con-strained by their emotional attachment to a business idea.You will learn the most common negative impacts of the pas-sion trap, and how it sneaks up on unsuspecting founders. Iwill map the core pattern of the passion trap, a reinforcingloop of ideas, actions, feedback, and interpretation. You willdiscover how common cognitive biases can sabotage entre-preneurial effectiveness and why some personality types aremore susceptible than others. You will also find a list of earlywarning signs, helping you to flag symptoms of the passiontrap when there is still time to counteract its effects.
- Part II outlines and explores six principles to help you squeezethe most out of your passion, while not being trapped by it. Whenapplied together, and with the right level of skill, these principles willdramatically improve your odds of new venture success.
1. Ready yourself as a founder.
The premise of Chapter Threeis that the most fundamental driver of your startup’s earlysuccess or failure is you. I will show you how to take an honestlook at yourself as a founder; how to align your skills andyour role with your venture goals; and how to purify yourpassion, taking it to a higher, healthier, more productive level.
2. Attach to the market, not to your idea.
Passion is an inner phe-nomenon, but all healthy businesses are rooted outside thefounder, in the marketplace. Chapter Four emphasizes theimportance of a market orientation, and explains how market-oriented entrepreneurs do three things to ensure that theirpassion connects with ample opportunity: They obsessivelyemphasize the market; they strive to know their markets andcore customers; and they execute on their market opportunity.
3. Ensure that your passion adds up.
Most passionate entrepre-neurs develop rose-colored plans, over-estimating early salesand underestimating costs. Chapter Five explains the valueof developing a clear, compelling math story. You will learnhow to clearly articulate your business model and plan; howto think about profitability and returns; and how to ensureample funding so that your venture has room to thrive.
4. Execute with focused flexibility.
No amount of startup plan-ning can accurately predict the unexpected twists and turnsimposed by reality. Chapter Six focuses on the importanceof iteration and agility, allowing your venture to be shapedby market forces over time. You will learn the importance oftesting and adapting your concept as early as possible, iter-ating rapidly, and continually improving the fit between yourbig idea and the marketplace.
5. Cultivate integrity of communication.
Passionate commitmentto an idea can breed reality distortion. Too often, aspiringfounders see what they want to see, dismissing uncomfortablefacts and avoiding tough conversations. You can avoid thesedangers by improving the quality of early-stage conversa-tions and setting a tone for truth-telling and healthy debatethroughout your venture. Chapter Seven stresses skills es-sential for high-integrity communication, outlining four per-sonal attributes that will help you avoid living in a “feel-goodbubble”: curiosity, humility, candor, and scrutiny.
6. Build stamina and staying power.
In an immediate sense, moststartups fail because they run out of money or time. Chapter Eight offers strategies for strengthening and lengtheningyour new venture runway and for summoning the personalresilience and perseverance that will give your big ideaplenty of time to thrive.
In the back of this book, two appendixes provide additional toolsand resources to help you launch a successful venture:
- Appendix A features a Startup Readiness Tool based on a setof assessment questions I use in my consulting work withnew ventures. The questions will help you evaluate your ven-ture’s strengths and weaknesses. Are you on solid footing?Where will focused support and attention elevate your oddsof success?
- Appendix Bincludes a resource list of books, websites, blogs,articles, tools, and thought leaders, organized by chapter sothat you can delve more deeply into areas where your venture most needs shoring up.
- I want to offer one final note on the founders and the storylinesthat I introduce on the first page of this book. I have included the secases because I know them well—having done advisory work withthree of them and getting to know the fourth through an interviewprocess—and also because they illustrate how passion can both ele-vate a venture’s performance and also limit or sabotage success. Myintent is to present these stories in a way that is fair, accurate, andunvarnished, so that they represent both successes and failures ratherthan a romanticized or idealized portrait of the mythical perfect ven-ture. In fact, the further I progressed in the writing of this book, themore clearly I understood that it serves as a sermon to myself, re-minding me of my own blunders and my continuing vulnerability tomake them again.
In this spirit, I encourage you to harvest the lessons from this bookthat are most relevant and applicable to your own goals and circum-stances. As I think about the teachers and books that have had thegreatest positive effect on me, personally and professionally, I canpoint to lessons from each that have been indispensable, and also, for each, I can point to aspects of their teachings that were not fully ap-plicable or useful to me. I urge you, as a founder, to be a student ofyourself and your venture and to use this book as one of many toolsin your learning process, creating an approach to entrepreneurshipthat works for you.