[Guest Post] Attention startups! – The danger is greater coming down

By , 17 May 2013 at 12:31
[Guest Post] Attention startups! – The danger is greater coming down
Business

[Guest Post] Attention startups! – The danger is greater coming down

By , 17 May 2013 at 12:31

By Joe Haslam (@joehas), Associate Professor at the IE Business School, Chairman of Hot Hotels, and Wayra mentor

17 May 2013: During the dot-com boom of the late 90s, the company in which I was on the founding team paid a not insubstantial sum to Sir Steven Redgrave to speak at an event. Every penny was money well spent. With five gold medals at consecutive Olympics, not only was he a person of genuine achievement but also a very easy guy to deal with who happily posed for a photo with every single person who came to the invite only breakfast.

Admittedly, what he had to say about ultra high sporting performance had limited day-to- day relevance to the audience, most of whom were middle aged IT Directors. Still, communication is about how you make people feel – and it created a fantastic image for our brand and got us access to many people whom otherwise it would have been different to reach.

Many mountaineers and explorers make their living off such events. Some find this a chore as they are people of deeds, not words and find it difficult to relate their experience of risk and adventure to people whose career has been based on the avoidance of the same. 

It’s different though for startups. I have some experience as a mountaineer (having taken on four of The Seven Summits, which are the highest peaks on each continent) – you do meet many successful business people on the slopes of these great mountains and they are almost always a nightmare for the local guides. Oddly entrepreneurs are much better “clients” than people used to being in control and getting their own way.

While waiting in camps for weather to clear, I’ve tried to tease out the Peter Drucker notion that the essence of entrepreneurship is risk management. Here are three themes that constantly re-emerge:

1. The Danger is Greater Coming Down

Most climbers fall not on the way up when they are fresher and with a clear objective in mind but on the way down. It’s not just fatigue but also the euphoria of making the summit. The lesson here is that you must finish the job right to the end. Winning a contract is nothing until it is earning revenue.

Getting a major hire is nothing unless you can integrate that person into the rest of the team. Just like a summit pic, that photo of you in Techcrunch means nothing unless you can successfully reach an exit. In my office, I keep the famous photo of Toni Kurz hanging from the Eiger, to remind me just how close the distance between success and failure can be.

2. Think not of Where You Were But Where You Are Now

The analogy here is that if you slip or come off a wall, that the training is to forget immediately where you once were and to focus on not falling further. That means stabilising your position and checking your equipment before deciding to retrace your route.

Too often climbers are in rush to get back to where they once were and in some cases end up falling even further because they were unable to completely reset. Stuff happens. Employees resign, databases get corrupted and customers don’t renew. In a startup, there just isn’t any room for moaning. Just as for a climber on a mountaintop, it is your choice to be out there. So whatever happens, just work out what is the best possible thing you could be doing right now and get on with it.

3. Sometimes Cutting The Rope Is The Right Thing For All

Those of you who have seen the fantastic documentary about Joe Simpson called Touching the Void will know the story of Simon Yates’ decision to cut the rope. Joe is very clear that Simon did the right thing and that he would have done the same. It’s well worn advice that in a startup, there is no room for passengers and firing a sub-standard performer is an easy decision. But what is also true is that there are times when your otherwise capable person gets themselves into a position where you must cut the rope so that you both may survive. That’s a much harder decision but an equally necessary one.

As a climber, one of the best pieces of advice I was ever given is that you don’t ever conquer a peak. You literally sneak up on it, snap a summit pic and then get the hell out of there.

I remembered this when I heard Niklas Zennström tell of just how close Skype was to not making it when it was acquired. High reward comes from high risk so don’t expect to be in control at any point. If you find this constant uncertainty difficult, then go do something else.

The advice I give to the startups I speak to in Wayra is to embrace risk – risk is the whole purpose of a startup. In the beginning you are no more than a controlled experiment to see if there is a market for your product. You must seek the extremes, make things fail to see how strong they are. You must look to do something every day that your most established competitors couldn’t or wouldn’t do.

Lastly, ask yourself – what is worst thing that could happen? To get anywhere, first and foremost you must survive. A good rule of thumb as you enter each day is to ask: what is our weakest point? What could happen today that would absolutely kill us? This isn’t particularly fun but is a necessary counterpoint to some of the euphoria of entrepreneurship. Then turn that weakness into a strength.

The mood in Base Camp of a successful summiter can be very similar to that of an entrepreneur after an exit. More relief than arrogance and definitely respectful of the challenge. They are glad to have achieved the objective, but don’t want to think too high about what was necessary to achieve it. All that passes and in time both entrepreneurs and mountaineers usually come back for more. Not everyone would go as far as Dutch climber Ronald Naar whose motto was “Alleen De Top Telt” (Only The Summit Counts). But anything for a life less ordinary.

 

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