Don't put your startup on the roulette wheel
Building a company is a bet with the world that you're right. Our advantage over a traditional casino, though, is that we can change the table... or the rules of the game.
Every company starts with a theory, an assumption of problems worth solving followed by potential outcomes. Along with forming a startup, the theory transforms into a bet. The more you put at stake, the more serious your bet is.
And the higher the bet, the more difficult the decision to pivot the company.
FUNDAMENTAL BELIEFS. Behind the bet is the theory, and behind that, there’s usually a deep, personal faith. It requires enormous energy to rebuild your fundamental beliefs and stay on track.
THE SUNK COST FALLACY. This psychological phenomenon plays a role in pulling us back from “changing the table or the game itself”. We think it’s better to stick to things we’ve already invested in just because it was a lot of effort and money. This is how people lose fortunes at the casino.
SOCIAL PRESSURE. We are social animals, so we feel external pressure to stick to our claims and assertions (especially made in public!). Is it easy to say I was wrong? It isn’t.
THE BIG PLAN. You’ve planned everything - every tiny detail of your company. It’s been months of thinking (→ sunk costs). You just know it’s gonna work (→ fundamental beliefs). But then, it doesn’t go smoothly. What now?
What I think
Pivots come from the trailblazing nature of startup building. It’s okay to turn around, but it doesn’t mean we should skip proper planning in the first place.
Don’t stick to your ingenious conquest plans. Instead, have a clear goal and a compass for direction. I can bet any money that your path will be different than you think today.
Changing your mind can save your startup from gambling.
What others think
From Mike Tyson:
Everyone has a plan until they get punched in the mouth.
It’s so true. Being prepared for the unexpected is so much more important than the best plan.
From Benjamin Franklin:
If you fail to plan, you are planning to fail.
Hard to disagree, but probably the most important plan is The Plan For Making The New Plan.
From one of my clients:
You started with drone photography, transformed into a software house, and today you are creating REDD, a data company. How do you know where you will be tomorrow?
Since 2010, my north star has been simple - to impact the commercial real estate market through innovation. The path changed dramatically, but the goal stayed the same.
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