This post continues the Conversation on Entrepreneurship series from the last few blog posts. In this blog, I’ll talk about life as an entrepreneur, why focusing entirely on an exit isn’t the best way to grow a company or create enduring value, some things to keep in mind when making decisions, and how to successfully navigate disruptive changes in the marketplace.
Sometimes life can be pretty tough as an entrepreneur, like you’re facing a steep mountain with a long way to climb up to the top. Frankly, sometimes you’ll have to backtrack a ways to find a new path and you’ll only get it right on the second, third or nth try. It’s critical to maintain your focus, persist and learn from your mistakes, and try again, varying as required based on both data and intuition, multiple times if necessary, until you get it right.
There’s a fine balance between taking calculated risks and taking stupid risks. While it might be the stuff of good movies to succeed or fail with a bet-the-farm gamble, this is not the right approach if you want to succeed in business. You need to aim big, but if you’re going to fail, and frankly you will fail frequently if you’re taking risks, then try your best to fail early and often. Take small gambles, much as you would in poker, and be ready to capitalize on each bet, or walk away if it doesn’t work. Fail as quickly as you can, so that your failures are small and so that you can use each failure as a learning opportunity to improve. Fail, learn, and fail again, improving all the way, until at last you succeed. When you succeed, ensure you celebrate with your team, but also be prepared to start over, because one success typically doesn’t make a business all by itself. Success in business is often a series of small, fast failures, nigh-invisible externally, punctuated by few lucky successes that sequentially build on one after the other. Take creative risks, but take calculated risks and learn from your mistakes so that eventually you and your team succeed.
This is how great ideas and innovative breakthroughs happen, through steady iteration based on feedback from your team and your customers. For the first five years of BioWare, myself and my co-founder Dr. Greg Zeschuk didn’t pay ourselves a salary, but we kept at it even though it was painful at times for us as founders. We believed that we and our team were building something valuable and this kept us going.
To execute well, you need to be decisive, yet flexible. Frankly, being decisive is really tough! You need to be both firm, but also flexible when new data comes in, because the external environment around us can be really challenging at times.
Here are some good quotes on being decisive that I’ve found helpful over the years:
Dwight D. Eisenhower: “In preparing for battle I have always found that plans are useless, but planning is indispensable.”
Here, I think Eisenhower is referring to the importance of practice in aligning a team for challenging conditions, but he’s also noting that conditions often will change when you get beyond the plan into actual execution. This is true in business too.
Marine Corps’ ‘70 percent solution’: “If you have 70 percent of the information, have done 70 percent of the analysis, and feel 70 percent confident, then act.”
Frankly, this balance is really hard to achieve. I’ve been guilty myself many times of waiting too long to make a decision, and I’ve also seen people who make decisions too quickly, without enough information to make the right call. I’ve found that having lots of smart, creative people around you who have diverse backgrounds and opinions and who are encouraged to speak their minds openly is incredibly useful in helping you to figure out the best course of action. A strong team is always a huge asset!
Andy Grove: “Only the Paranoid Survive.”
This last one just references the need to always being on the lookout for disruption and recognizing the impact this has on your decision making process, as well as the vision and mission you need to set, and everything else your organization does.
Being persistent and decisive, and always alert to change in the environment around you, sets you up well to be ready to take advantage of disruption. This disruption in a marketplace is often where the greatest opportunities, risks and steps in value can occur, and you and your team need to be ready to pursue them aggressively but carefully.
Frankly, disruptive events in a marketplace are risky times, where not every company will survive. Now, one way to look at change is that it’s only bad if you fail to evolve. The good news is that true competitive differentiation comes from providing meaningful quality, or disruptive innovation followed by meaningful quality, and this is true in both more mature and nascent markets.
Achieving ideally both strategic disruption and delivery at sustained quality will allow you to not just survive, but thrive! One other point to note is how important the balance of data and intuition is in deciding how to proceed when you lack enough data. Analytics and telemetry are really important to team success in the new world we live in; combined with intuition, data is incredibly important. We also realized early on that a key survival attribute for us, and this was true regardless of platform or business model, was achieving user Engagement, which led to Acquisition, Retention & Monetization – hence why quality and emotional engagement are so prominent in the values and vision we locked on.
Something else worth noting is that you shouldn’t be overly focused on (read: entirely consumed by) the exit when you start or as you run a business. If you’re doing the right fundamental things every day, this will steadily grow the value of your business, and over time this will build to the point where you’ll get the opportunity to pursue an exit at a strategic valuation greater than what you think the business is worth. That’s a good time to consider it seriously. If you do the right things along the way, that moment will eventually happen. Some entrepreneurs focus too much on an early exit; for me as an investor, when I hear them talk at length on how their idea is a ‘sure-fire solution to an early big exit’, this is a warning sign that they may not have the patience to build enduring value. Early exits can certainly happen too – and if they do, great! Just don’t let the focus on an exit take over the day to day activities required to build a great, enduring company that’s ultimately worth even more.
Stepping away from all this, another key personal lesson as an entrepreneur is to never forget to enjoy the journey and enjoy being entrepreneurial. Be passionate and love what you do every day. Entrepreneurs take risks, and they like to win. Being an entrepreneur isn’t always easy so it’s important to enjoy the journey and the small victories along the way. Entrepreneurship in a field that you’re passionate about is why doing this is fun, even though it’s painful at times.
Finally, teamwork and collaboration are incredibly important. You’re not alone in this journey; you have a team and you need to give them credit and support at every opportunity.
Collaboration and an aligned team are one of the biggest factors in success of any organization, but this success depends on a clear vision, solid values, evolving strategies and innovations to map to and capitalize on the changing external environment, and great people working together in a strong culture.
Luckily we had all of those at BioWare. I was honored to work with all the smart, passionate teams at BioWare over the two decades I was there. Now I’m enjoying working with many other people across multiple different organizations as I pursue angel/venture capital impact investing at Threshold Impact and as a venture advisor at iNovia, and in my non-profit work with great organizations like the University of Alberta for education and the Stollery Children’s Hospital for health care.
Best of luck to all of you in your entrepreneurial endeavors going forward!