Why the Best Entrepreneurs Are Closet Pessimists
Optimism can kill your business. There, I said it. Let the comments and rants begin (and if they are anything like those written in response to my Why "Be Passionate" Is Awful Advice post, I'm sure another great debate is on the horizon). But before you say that I'm clueless, out-of-touch with Gen Y, or a detriment to entrepreneurs, allow me to explain my position.
When I started my first business in 2003 - one that ended up being a colossal failure that almost bankrupted me (which I now refer to as "the company that shalt not be named") - I was optimistic about everything. Every "creative" marketing idea was touted as if it was destined to be a "guaranteed winner" capable of generating tons of high quality leads right out of the gate. My partners came out of every sales meeting as if we had been victorious (we even foolishly spent money on mini-celebrations at the local pub after most presentations). Our business plan's seven figure financial forecasts seemed like certainties to us (we even made them "more reasonable" and scaled them back from our original eight figure forecasts). However, there was only one thing true about each of these scenarios.
They were all false, utterly unrealistic, and ended up playing a large role in the company going belly up.
In truth, our marketing campaign results were beyond subpar. Rarely did "the company that shalt not be named" convert sales - even after "great" meetings. And the fact that the company went bankrupt, well, that just shows you how credible our projections were.
The company folded in a little over a year as the result of my partners and I being overly optimistic every step of the way. Had I thought through our marketing campaigns more, learned from my selling mistakes or been more grounded with my financials - instead of being in the clouds and "hoping for the best" - the company that shalt not be named might still be in existence today.
In the new economy where the fight for market share and revenue is more fierce than ever, young entrepreneurs cannot afford to be overly optimistic about any of their goals, tactics, or initiatives. Excessive optimism leads to phrases such as "it will all work out somehow" rather than realistic mindsets such as "how can we make this work at all costs." In many cases, having a "the glass is half full" mentality blinds an entrepreneur from seeing all of the true challenges and issues that surrounds his business and decisions. In business, as in life, things don't always work out - and almost never work out as planned.
In my opinion, the best entrepreneurs are business owners who have an optimistic attitude coupled with a pessimist's viewpoint and rationality. Having an ever-present "glass is half full" mentality is dangerous and might very well lead your start-up or business down the toilet.
Mind you, I'm not advocating that you need to walk around acting as if there is a rain cloud following you. Nor am I telling you to be a Debbie Downer when it comes to growth opportunities. However, from a purely decision-making perspective, I advise you to be a cautious closet pessimist instead of an eternal optimist as you guide your business toward success - and your business will be better and stronger as a result.
Scott Gerber is a serial entrepreneur, author (Never Get a 'Real' Job), TV commentator and founder of Young Entrepreneur Council (YEC), an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.