Growing businesses everywhere struggle to gain new customers and new revenue. It is like pushing a boulder up a hill. As budding business mavens, we work hard to find that next big deal or that marketing breakthrough where our app is suddenly the viral hit. If you are one of the lucky ones that capture a few of these in a row, you find yourself on a rocket ship, the trajectory of which only a few can enjoy.
But beware, because in my experience the fall comes quicker and with steeper momentum than the push upwards. And by the time you recognize that the crash is not a blip but a newfound trend, it may be too late to change course.
For first-time founder/CEO's, you must utilize a combination of confidence, tenacity, and exuberance with an equal amount of skepticism and caution. I believe that all of us go into our new business with a healthy balance of these traits, but when great things continue to happen--we begin to assume that these great things will just continue to show up at our door everyday like the Fed Ex driver.
When your business grows past you and the small founding team and you add other professionals like sales people, you begin to create distance between you and reality. Sales people by nature are optimists and frankly we enjoy hearing the good news over any of the bad news. There is no ill intent here it is just human nature. However, your job is to protect yourself against these phenomena from creeping into your business.
I fell victim to this just a few months ago with one of our investments. One of our CEO/founder's saw some preliminary but very positive data and pivoted the entire business to a new strategy. With a healthy portfolio (35 investments in 3+ years), it was easy for me to nod my head in support. I asked a few superficial and high-level questions then moved on.
Needless to say, the business has not panned out the way the data and story was told back then. Their business immaturity and youthful exuberance coupled with a hectic schedule and my natural willingness to grab great news resulted in a bad outcome.
Where was my skepticism? Where was my caution? My role was to either ensure that they were applying a healthy amount of suspicion or to bring that suspicion myself. Lesson learned. Again.
Be careful that you begin to believe your own headlines. Dig deep on every aspect of the business and assume nothing.