Lessons Learned As An Entrepreneur — Rule 1: Survive
The Ones Who Want To; The Ones Who Do It
I’ve been an entrepreneur for 15 years now. This stint anyway. I set up a business when I was 20 and way awful at the basics and wrapped things up after a while. I was different, a loner and very independent and wanted to do my own thing. But I didn’t have the skills or the support network. The taste of entrepreneurial life didn’t leave me, as I found out much later.
Then I went into a long corporate career and did well, I found I adapted to several diverse functions well over the years and I managed to be a combination of unconventional, driven and politically adept. A lot of leaders like disruptive people in their organisations because it either makes things happen or it makes them look like they are edgy and challenging leaders. Sometimes both. I was a change maker and found the right guy to use my skills.
My last company wanted to be innovative. But senior management couldn’t pull the trigger on innovation project after project. Big organisations are good at managing risk and scaling up a small handful of projects. They are not good at taking small ideas and scaling them up. They are not good at in-housing small businesses either, they almost always suffocate them.
It was time for me to stop complaining about the situation. In my mid-forties I turned my back on the salary and bonus and pension and car. I went for it, I didn’t get paid for a year and then a little the next year. I don’t believe I have ever made up the ground on salary. I have no complaints, I made my own choice.
It’s been a ride and it’s been nothing like some of the articles and books I read on others who have gone into business and succeeded or failed. Entrepreneurship is like anything else in human endeavour, we all exist on a bell curve with excellence at the left and massive failure on the right of the curve. In the huge centre section live most of us entrepreneurs. We toil away and some of us do well, a lot of us are average and some of us are barely competent. But we all exist.
It’s worth nothing that when you’re in the middle of that bell curve, you get told about the people on the left of the curve, the once in a generation success stories that occur in most sectors. The uninformed think that all entrepreneurs make it big and that it’s quite easy. That it’s about having a good idea. They don’t see that it’s about execution and hard grind. Ideas are common. But the ability to execute an idea well is a scarce resource.
I admire all entrepreneurs, except for the truly incompetent and the criminal. The latter are just criminals, not entrepreneurs. I think I even have a little admiration for some of the incompetent, at least they gave it a go and believed they could win. Near where I live an organic greengrocer opened and the area is mixed in terms of economic spread and I wondered if he would make it. He’s doing well, I really admire him. Next door a vegan café has opened its door and I think he is going to fail, he has completely misread his area and footfall. But kudos to them both.
One thing all entrepreneurs have in common is that they did it. I’ve lost count of the number of corporate people who have told me about their dream to set up a business. But they could never quite jump off the cliff and leave the salary package and bells and whistles behind. I’ve lost count of the number of times people have asked me if they can come along and join in my venture. Seriously. Once the years of uncertainty are behind to some extent, the days of not being paid are gone, they want to hitch to my wagon.
There Is No Straight Line
It’s a hard road and no number of blogs and listicles — “7 Sure Fire Ways To Win With Your Business” — are going to come close to the truth of what the journey is like. It’s tough and it’s tough for years and years. My favourite business book of all time is Phil Knight’s tale of him building Nike, “Shoe Dog”. It’s brilliant because it rips the veil away and shows a company that was on the verge of extinction for year after year. He wisely doesn’t write about the glory years of Nike; the bulk of the book is about the earlier years. If you’re thinking of setting up a business, read it. If you still want to start the business, good for you, welcome.
I made so many mistakes along the way. I don’t own anything close to as much of the business as I envisaged. Mistakes with first and second round investors hurt me early on, not just in terms of dilution, but because of the negative influence on the day to day of the business. A couple of my co-founders left early on too, they realised this life was unforgiving. Big corporations can be good hiding places for underperformers, a big business can absorb an underperformer and carry on untroubled. A small company shines the spotlight of reality on everyone, every day. The weak of spirit fail.
The original business wasn’t great. It was a good product and funnily enough proved to be three years ahead of its time — the sector exploded later. It was selling decently, but the breakthrough just wasn’t coming so I decided to exit while there was cash in the bank and some retained cash. I was pragmatic enough not to let ego cloud my judgement and knew when to fold on the original idea and use the residual asset to preserve some value for investors.
We decided to let another venture reverse into our business and use the corporate structure and cash. At this juncture my deal was to assist the new business for a period. Then I was going to move on and develop another venture. I went to the Board after a few months and said it was time for me to leave, I had delivered on my side of the bargain. The managing director then decided to panic and resign. Being a mix of stubborn and loyal, I stayed on at the request of the chairman.
The next years were a hard struggle, the business we had reversed into was new technology based and by definition it was always going to be tough to succeed. It proved to be that way. Commercial progress was difficult, we were always inches from the breakthrough but never quite there. Cash was a constant worry, we were very close to the lights going off more than once.
You could be thinking by now I was just a poor strategist, or bad at execution. Maybe I was. But the only thing on my mind was keeping moving forward. Stopping wasn’t an option, not for me, not for the stakeholders. I could have folded the tent and gone back to a decent job, because I wasn’t earning a lot and my equity wasn’t worth much at all.
I was learning an early lesson. When it comes to start-ups, there is very rarely a straight line from A to B. You have to adapt, you have to keep the lights on as long as you can. Even if you’re not winning in the way you laid it out to your investors, it’s your duty to keep the business operating. It’s not the business you envisaged, but you have to adapt.
The personal toll in these situations is high. This isn’t the world of glossy business magazines, with sharply dressed entrepreneurs hopping onto airplanes daily. This is “will we make it out of this week?” At some stages the stress was crushing. Awake at 3am wondering how to navigate a serious working capital issue. Sleepless and worrying how to replace a major customer. The loneliness of times such as that is profound.
Sensible investors were supportive, which was appreciated. Less professional investors invaded my life to an unreasonable extent. The stress is high and affects your whole life. It’s not a complaint, I willingly went into my less than optimal situation. It’s an observation. If you want to be an entrepreneur, develop a thick skin and be resilient.
You have to learn to keep going when rational people are telling you that it’s time to stop. You have to tell colleagues who you regard as friends that you can’t afford to keep them. You have to motivate a battle-weary team and tell them this is all worth it.
Some years later I was asked to speak to some business students about my experiences. The person who invited me had seen my challenges over the years. When he introduced me, he said “this is a great story from someone who never, ever, ever gives up.” It was a poignant moment for me and a very proud moment.
At some level I had always thought of myself as someone who couldn’t handle it when it was crunch time. He was right, at numerous points I could have stopped and didn’t. But I also wasn’t willing to allow myself to accept I was as resilient and determined as I had become.
Rule 1: Survive
It was during this period my ethos emerged. The obvious questions: why didn’t I fix the early mistakes by setting up and going again? I asked myself a thousand times why I didn’t just walk away at some stage and reload? It’s because a business evolves. Somewhere along the path I realised that rule number one is to survive. As are rules two to ten. Anything else is way down the list. It doesn’t matter if you are brilliantly set to deal with rule eleven, because you won’t be there to deliver on it.
You owe it to the venture to survive. It doesn’t matter if the business of the venture evolves along the way. Survive. You’re in the middle of the bell curve and that’s still a creditable place to be. In the end, you realise it’s not an option to walk away. You lean into it and make the most of the venture you have, the one with scores of staff, the ones with hundreds of thousands of customers, the one with many shareholders.
A breakthrough came and a new and viable business emerged. It didn’t happen overnight, it’s taken the last seven years to develop into a sector leading business. Once more, there was no silver bullet. Seven years of having a central strategy and refining it, being disciplined. Resisting the temptation to overreach. But still being bold. The very essence of being an entrepreneur — controlled risk, just on the edge. But not over the edge.
We humans get bored easier than we think. That leads to lack of discipline. It’s easy to fall into the trap of veering off path and convincing yourself a new avenue is more appealing, because frankly you’re tired of the grind at some subconscious level. But you have to be disciplined and stick with it. The resilience learned in the survival days is valuable here.
Even as success was in sight, there were still major events that went to the wire. There is some “Law of Entrepreneurial Deal Doing” which means everything goes to the last minute, no matter how diligent you have been. Even at the end, as your fingertips touch the finish line, a late change happens, the finish lane suddenly gets dragged off into the distance again.
At times like this, for some reason people feel compelled to voice “it wasn’t meant to be.” I never understand that, there is no higher power. You struggled for complex reasons usually involving humans changing their mind, or external events. Not because of karma. The last two times a deal I thought was closed fell over, I had a short night of sleep, got up and thought “let’s have one more go.” Both times it got done: ugly, late, but done. Survive.
Scarred And Proud
I look at the business now and am proud. After all these years I’m still excited, I think we are just getting going really. With a little scale now, there is some leverage to enter new areas and to squeeze a bit more share out of established markets. I look at all the staff now, compared to two of us sitting in a leased office. Look at the regard the business is held in by its customers and partners in markets internationally.
It’s a good business, it does what it does well. It’s a bit battered and scarred, because it’s had some challenges. The scars have been worth it, they’re a badge of honour. It isn’t exactly the business anticipated at the outset, because we have been adaptive and nimble in order to survive. It’s a sector leader and it has a very good investor base. It attracts great staff. It has a clear strategy and business ethos. The culture is high support and high challenge, there’s a clear meritocracy at work. People who don’t click with the culture are gone swiftly.
I look at the culture and realise that even though the business is relatively new, it has developed a very clear identity and character. I realise when I analyse it, the character is shaped by the survival years. Uncompromising. Urgent. Bold, yet analytical — “gut feel” can get you in a lot of trouble; it’s used for the last 5% of a decision-making process, the first 95% is from data. Ruthless with competitors, we want their share, before they come after ours.
It’s a business that is winning because the will to survive taught it how to win. At the moment it’s led by an entrepreneur who learnt that survival is rule number one. I think when I look at the top talent in the business, that same ethos is present. I believe the venture will continue to be a resilient and resourceful growth story, because of its tough journey.