The tale of Icarus parallels a story I have watched unfold again and again among passionate entrepreneurs. You take a risky leap. You experience the elation of new-found freedom. You boldly fly higher with single-minded conviction, ignoring the naysayers who shout warnings from below. Then you find yourself in some irreversible crisis with no way to overcome gravity’s downward pull.
The culprit in this story is something I call the passion trap, an all-too-real phenomenon that undermines many a new venture.
The passion trap has roots in a basic truth: Your intense devotion to your business concept can bring danger along with its obvious benefits.
Passion provides courage, energy and optimism to propel you on your flight forward, but it also can blind and deafen you to helpful data and ideas. And it can lead you to believe that you’re somehow immune to typical startup risks that wise founders have learned to respect and manage.
The most common negative consequences fall into six major categories.
New entrepreneurs often struggle to find the best fit between what they personally bring to the table (strengths, weaknesses, needs and hopes) and what the new business requires. The more passionate the founder, the more likely he or she will drift toward one of two extremes.
At one end are founders who focus only on what they love to do, thereby neglecting other important areas of the business. In this scenario, the entrepreneur’s passion becomes an end in itself, rather than something that fuels a higher business purpose. He or she confuses positive emotion with progress, and feeling good becomes the moment by moment measure of success.
At the other extreme are founders who try to do it all, taking on roles that don’t play to their strengths, spreading themselves too thin and refusing to let others take up the slack. In this case, new business owners become overextended and overwhelmed while the startup challenge grows in complexity urgency and scope.
You must take an honest look at yourself and what you bring to the table as a founder; how to align your skills and your role to achieve your startup goals; and how to purify your passion, taking it to a higher, healthier more productive level by understanding it, connecting it, strengthening it and directing it.
Missing the market
Most startups suffer from anemic early sales, far below projections. In too many cases, the uncomfortable truth is that expected market demand for a new product or service, demand that is critical to the startup’s viability, simply doesn’t exist.
A classic misjudgment on the part of the founding team is usually to blame: We believe passionately in this product, so everyone else will, too. It’s a build-it-and-they-will-come mentality, where the entrepreneur knows better than the customers what will make them happy. Too often, this attitude gives ride to inspired products that never find more than a few customers, or brilliantly conceived solutions in search of problems to solve.
Even when a robust market opportunity does exist, over-confident founding teams rarely invest enough time, energy and resources into marketing and selling their offering. They assume that the world will beat a path to their doorway. And they routinely underestimate or dismiss altogether the strength of competitive forces that will impact success.
Attach to the customer, not your idea. This principle addresses the primary paradox facing entrepreneurs: Passion is an inner phenomenon, but all healthy businesses are rooted outside the founder, in the marketplace. Have a market orientation and it will bring your venture an edge over product-centric startups.
Rose-coloured planning (or none at all)
Passion-trapped entrepreneurs are unrealistically optimistic. Secure in their belief that they’ve discovered a can’t-miss idea, they view the startup journey through rose-coloured glasses. Best-case assumptions drive plans and projections. Projected revenues and expenses are based on what’s possible, rather than on what is practical or likely. As a result, founders caught in the passion trap are blissfully unaware of how long it will take, in realistic terms, to reach their financial break-even point and what it will cost to get there.
Ensure your passion adds up. Your business can be reduced to a simple, clear and compelling math story. Learn the power of clearly articulating your business model and plan, how to think about profitability and returns, and a few principles for funding your venture so that your passion has room to thrive.
An unforgiving strategy
There has never been, nor will there ever be, a shortage of new business ideas or aspiring founders willing to commit time, sweat and tears to bring them to life. Unfortunately, many of these ideas, perhaps the vast majority, don’t represent achievable business opportunities.
Because early ideas are so frequently off the mark, surviving and thriving as an entrepreneur means treating the startup journey as an exercise in uncertainty. No matter how thoroughly you research your target market, or how rigorously you plan your startup launch, your first strategy will mostly likely be wrong. So, too, will your second.
Unfortunately, passionate and overconfident founders sometimes put the lion’s share of their available resources into a singular, high-cost strategy, leaving no cushion or wiggle room for things to go wrong, or to go differently, as they inevitably will.
You need agility. No amount of planning can accurately predict the unexpected twists and turns imposed by reality. It is important to find ways to test and adapt your concept as early as possible, iterating rapidly and continually improving the fit between your big idea and the marketplace.
The reality distortion field
Every founding team creates its own reality distortion field somewhere along the startup path. After building overly rosy plans, founders are swayed by psychological pressure to seek out data that validate their vision and to avoid or deny bad news. Unspoken group norms promote disdain, even hostility, toward people who raise concerns or point out contradictory data. These pressures combine to create a kind of psychological cocoon around the startup team and its founding premise.
Agility enables success only if your decisions and discussions are grounded in reality. Integrity of communication places a premium on the quality of early-stage conversations and sets a tone for truth-telling and healthy debate. Cultivate high-integrity communication and four personal attributes that help founders burst the “feel-good” bubble: curiosity, humility, candour and scrutiny.
An evaporating runway
Until the new business concept has proven itself and is generating a sustainable level of revenue, startup founders must deal with a pile of ever-dwindling resources. The first five negative impacts all increase the likelihood that a new entrepreneur will run out of cash, time, support or personal will before he or she can find an adequate revenue stream. Everything will take longer and cost more money than you think.
Build stamina and staying power. To strengthen and lengthen your new venture runway, aim to launch close to the customer -- ideally with paying customers already in hand -- and raise more money than you think you’ll need. Focus on building personal staying power. Healthy entrepreneurial stamina is not just about the refusal to quit but is grounded in ongoing learning and improvement.
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