Starting a new company is always a complex undertaking. But in these uncertain times, the challenges – and opportunities – are greater than ever.
I shared my views on how to be a successful entrepreneur these days in a recent Forbes article:
Entrepreneurial activity soared in the first couple of years of the pandemic. Then a new reality bit. Hard.
Any entrepreneur will tell you the same thing: There’s never an ideal time to start a business, and if you wait, there is a good chance the opportunity will vanish—along with your nerve.
In the current economic climate, I’ve found this has never been more true. Nevertheless, in 2021, a record 5.4 million Americans shared the view that starting a business was a great idea. The question is whether or not all these infant companies can survive a volatile market like we’ve experienced this past year.
To recap, there are several reasons for that entrepreneurial spike. The extended lockdowns disrupted the normal course of business and overturned the entrenched symbiosis between employers and employees. In 2020, around a third of new businesses were started by people who had lost their jobs.
On top of that, interest rates were low in 2021, both stock and housing markets were booming and government support was in place. The shift to low-cost delivery of online goods and services was accelerated during the pandemic. Given what people had just been through, it’s safe to say the threshold for risk was higher as well, a mindset that certainly contributed to The Great Resignation.
Historically, a majority of business startups eventually fail. While about 20% fail in the first two years, it falls off sharply from there—especially as the “new normal” for entrepreneurs is characterized by volatile stock markets, weak housing markets, steadily increasing inflation and rising interest rates.
For those who are determined to power through the prevailing headwinds and either start a business or reinforce one they have already started, here are some thoughts from a serial entrepreneur who has been at it for almost 45 years.
Whatever your business is, it must be your greatest passion. If you are not truly passionate about your vision, you will not have the fortitude to keep going in the face of the inevitable setbacks. Starting a business just to make money is never going to provide enough grit to let the business succeed over the long term.
Courage Of Conviction
You cannot crowdsource your conviction: You must have a clear intent and a strong sense of purpose. Especially in the earliest stages, it is tempting to ask for feedback, opinions and reassurance from others. Ultimately, that noise is only going to clutter your thinking and dilute your resolve.
While it is essential to be passionate and to have the courage of your own convictions with a startup, be mindful of the relentless drive to control everyone and everything all the time.
Tight control of the business and financial plans is always important early on, but excessive rigidity should not preclude the ability to listen and remain agile, adaptable and innovative. If that discipline is not embraced early on, it can also inhibit the recruitment of talent and the overall growth of the venture. In other words, a little can go a long way.
A Matter Of Trust
Entrepreneurs need to understand that they cannot succeed entirely on their own. You must share the vision, and it is up to you to inspire and build trust with others who can meaningfully support the business over time. Yes, it is your baby. But yes, others can also contribute to its care and feeding.
Preparing For The Worst, Manifesting The Best
Mike Tyson famously said that “Everybody has a plan until they get punched in the mouth.” This is as true for entrepreneurs as it is for boxers.
You can never fully plan for the unexpected, but when you hit an air pocket, you cannot freeze—you must act and act fast. Remember that however bad things get, this too shall pass.