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The Affair

Here's why it's good for a company's founder to face tests early in a start-up.
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If a founder's commitment to a business isn't tested during start-up, it might not be strong enough to sustain a growing company

Do not fear doubts. in the courtship stage of the corporate life cycle, it's normal to have doubts about whether or not your business idea will become a reality. Anyone who's ever passed through this stage before the company actually exists--when the emphasis is on ideas and possibilities--has had doubts. But how do you know which doubts are normal when starting a business? You can find out by doing some serious reality testing, which you can begin by answering these questions: 1) What exactly are we going to do? 2) How is it going to be done? 3) Who is going to do it and why?

If a business isn't tested during the courtship stage, the founder's commitment remains untried and might not be strong enough to sustain a growing company. At the first sign of trouble, the entrepreneur's commitment could evaporate. The business could have pathological problems that go unnoticed because no hard-nosed questions are asked. The entrepreneur's plans could be based on his or her fantasies of how things should be, not on what is. If that is the case, the idea will remain at the fantasy level and won't grow to an operational level. The courtship will end up being nothing but a passing affair.

During the courtship, pathological problems don't look like problems at all because everything is rosy. That's precisely why an untested courtship is so dangerous. It can give birth to an infant organization that won't be ready to deal with reality and might collapse. After a painless conception, the founder and company experience a lot of pain. And there has been no gauge of how much pain both can tolerate or what the founder's level of commitment is.

The same principles for testing commitment to a marriage can be applied to starting a business. With both, you need to take a hard look at some serious issues before you jump in. Some people write premarital contracts and, in doing so, decide not to get married. The same thing happens in business negotiations. You become excited about an idea and start negotiations to form a partnership, but when the details are worked out and written down, it doesn't look as exciting anymore.

Are there signs of health you can look for during a business's courtship stage? Well, yes, there are. If there's excitement after the business concept is reality tested, you could have a healthy business. The product orientation should reflect a commitment to a product that adds value, not simply makes a profit. And the founder should be committed enough to the business to take risks.

There are also telltale signs that the courtship may be nothing more than an affair. The warning signs: the founder is unrealistically fanatical and won't reality test the business; the business is going to be driven exclusively by a return on investment and a profit orientation; the founder's commitment isn't commensurate with the risks; and the founder's control is vulnerable.

After the courtship and the testing, what finally sparks the birth of the company? It's not when the articles of incorporation are signed. It's when the founder makes some tangible expression of commitment or undertakes a risk. The risk can have different manifestations--someone quits his or her old job, pays the rent for the new office, or promises to deliver a product on a certain date. When substantial risk is incurred and undertaken, it's clear that the courtship has been more than an affair.

Once risk has been taken, the nature of the business changes dramatically. The risk must be covered; the bills have to be paid. The founder's focus shifts from ideas and possibilities to producing results--the satisfaction of needs for which the company was established. In a business, that's expressed in terms of sales, sales, and more sales. Now that there is risk, the business doesn't need more ideas, it needs sales. "Don't tell me about more new product ideas, tell me how much of our current products you have sold," the founder says.

You can tell that your business is more than an affair by your level of clarity and commitment to the business idea. An affair is but a fleeting moment of self-indulgence along the corporate life cycle. Giving birth to a company promises a long-term reward--if there is a long-term commitment.

Last updated: Nov 1, 1996




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