His new article for Business Advice sees Small Business Charter chairman and ByBox CEO Stuart Miller delve into some of tough choices and frequent dilemmas entrepreneurs face.
Entrepreneurs face countless conundrums on the journey to building a worthwhile enterprise. Decisions that have such weight of argument on both sides that they torture you through sleepless nights.
Should you raise funds early, or bootstrap as long as your nerves can take it? Should you recruit upfront to prepare for growth or conserve cash instead? But one conundrum sticks out above all others. It is the mother of all dilemmas and you will face it again and again on your wonderfully precarious journey.
Should I pivot or persist?
Rule number one: real entrepreneurs never give up. Never, ever ever. That Churchillian refusal to down tools is at the very core of our DNA.
Of course, there are always a thousand seemingly good reasons to stop: running out of cash, being sued by a big company, your mum screaming at you every Sunday evening to get a proper job.
And you can always add to the list by convincing yourself of the same. “The market isn’t ready yet for my brain child”. “Like all other geniuses, I am just way ahead of my time”. “If only I could raise £10m then I’d grow a brilliant business”. “The collapse of the financial markets wasn’t my fault”. And so on. Yep – there are always plenty of reasons to stop. But don’t kid yourself – if you choose to give up, you have failed. And despite the current penchant for failure, that is not what real entrepreneurs do.
But the annuls of successful entrepreneurship are littered with glowing case studies of smart entrepreneurs who tweaked an idea before the money ran out. To use investor jargon – they “pivoted”.
Investors back people, not ideas
It’s funny how often you hear wantrepreneurs claim to be on the brink of launching their sector-crushing venture – all they are waiting for is the right idea. Of course, these people never end up on the starting blocks of startups because it is not about the idea – it is about the team. The old adage is true: investors back teams not ideas. A second rate team with a first rate idea will simply mess it up. But a great team with a poor idea will change the idea until it works.
This is all well and good, but if you’re in the eye of the entrepreneurial storm – how do you know whether to persist or pivot? How do you know whether you are about to make the major breakthrough and power on to real success, or whether you need a change of course to avoid destruction?
First of all, take a morning off and go somewhere like a park or a gallery or a garden. Somewhere out of your ordinary grind. Spend a couple of hours reflecting on the core principles of your business. Have you proved, unequivocally, that your idea is flawed? You absolutely must drop your ego and answer this honestly; there is simply too much at stake to do otherwise. Be brutally rational and drop all emotion. Have you demonstrated, empirically and for certain, that the fundamental economic model upon which your business is based is actually wrong? If not, then work out how to prove your idea is wrong and get cracking.
Up until now, you will have put all of your tremendous energy into proving that you are right, so trying to do the opposite will feel strange at first. But it can be a very effective catalyst to either unblock success or prove, once and for all, that the horse you are flogging is dead.
The realisation that your idea is fundamentally flawed will usually happen quickly. Write down the logic of why and, critically, how you proved this to be the case. Then email it to your chairman and talk it through with them. They will be just as interested as you in getting to the bottom of why the breakthrough is eluding you, so don’t be fearful of admitting to your chairman that you were wrong (if you are overly worried about that then you need to change your chairman, as well as your idea).
Then, set about the liberating process of pivoting, of which I will discuss more in my next article. Don’t confuse pivoting with failing – there is no shame in realising you were wrong and refining your business accordingly.
Finally, don’t think that the conundrum of whether to pivot or persist is a one-off – it isn’t. Successful entrepreneurs are curious beasts who are addicted to invention. Some ideas will work, others won’t – so it is important to establish a framework for evaluation.
Ultimately, there is no text book or guru capable of deciding it for you. The real answer will always come from your own entrepreneurial judgement and instinct. Trust it, because it is the most valuable asset you have.
Missed Stuart’s previous article on the six steps to perfect pitching? Catch up here.
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