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“Survivorship Bias” has a major problem. People who survive retrospectively attribute factors to their success that aren't actually true. Eric Reis' book “The Lean Startup” demonstrates this effectively and it's majorly worth a read. I am always surprised at how many startups just haven't read it.
I have ranted (sorry... blogged) about this before. You see, “Survivorship Bias” has a major problem. People who survive retrospectively attribute factors to their success that aren't actually true. Eric Reis' book “The Lean Startup” demonstrates this effectively and it's majorly worth a read. I am always surprised at how many startups just haven't read it.
So, the phrase “I just jumped off the cliff (or out of the plane) and built the parachute on the way down” seems to have stuck in the Startup Myths and Legends bible. But, the problem is - - so did every other startup. They all did. I go into well established businesses that have been around for years. They are still changing tack, ducking & diving and building parachutes. They ALL are. Without exception. Not one of them just took out a business loan, made a business plan and effortlessly executed it with no risk.
That's business. It's risky. And feels like you're on the seat of your pants 80% of the time. If it was easy, everyone would do it, right?
So, what do successful businesses really do? I recommend we listen to someone who has actually done it. Properly. And consistently. Listen to Richard Branson maybe? He takes more flight-related risks (literally) than anyone else. I don't think I have ever heard him say, “Yeah... I just jumped and built the thing on the way down. “. Someone correct me if I am wrong but I think what he tends to say is, “Minimise the downside”. So, let's turn that into something closer to our analogy:
Jump... but know exactly how you intend to land (have a plan!), put as much matting down as possible (finance), have an awesome team around you (HR) and put trampolines in as many places as possible. Before you even go up in the plane.
Folks. Successful businesses (and Eric Reis backs this up too) minimise the downside by getting old fashioned, uncool business structures in place – like good finance, good systems, good management and by concentrating on customers. Not recklessly flailing their arms in the air as they fall in to the dust.
Successful entrepreneurs are just business people who spot awesome opportunities and build sound business structures. But they are still business people – not really that much more “crazy maverick” than the thousands of other entrepreneurs who never made it.