17
THE HIGH-FF ENTREPRENEUR
How’s this for a question at the back end of the book: could someone with a high fear of failure become an entrepreneur – creating and running his or her own business? Or could they perhaps become a freelancer – relying on their own skills and attributes to hunt and execute work for their own account?
Working for yourself is probably the greatest leap you could make in terms of taking responsibility for your own destiny. It is also the ultimate move in depersonalization – taking Me Inc. to its logical conclusion.
We will deal with freelancing below. Meanwhile, we should consider starting a business – not least because many High-FFs avoid entrepreneurship. Undoubtedly, some will have been scared off by all that “start your own business” literature, which suggests that the stereotypical image of a successful entrepreneur is a million miles from the personality of those with a high fear of failure. Take this description from British entrepreneurial guru Mike Southon in his well-known business start-up guide The Beermat Entrepreneur (written with Chris West in 2002):
“Entrepreneurs are confident. They are born optimists: they simply know they can do it … Entrepreneurs are also charismatic. They inspire people … they have optimism to spare which they radiate and instil into others around them … Entrepreneurs are ambitious … Entrepreneurs are in a hurry … Entrepreneurs are also arrogant. They know they are good. At everything … Entrepreneurs are also manipulative … Entrepreneurs use people.”
Southon is not alone. Entrepreneurial consultants and authors Joseph H. Boyett and Jimmie T. Boyett come to a similar conclusion in The Guru Guide to Entrepreneurship (2002).
“Successful entrepreneurs are the eternal optimists … Successful entrepreneurs are not afraid to make leaps … Entrepreneurs respond to the negativism they meet by becoming even more committed to their idea – more convinced they are right.”
Virtually all start-up business books conjure the image of an entrepreneur as a swashbuckling risk taker – a confident visionary defying the odds and facing danger with a wink, a whistle and a cheeky grin. Yet these books are of little use to the High-FF because they are focusing on a different audience. Southon is a successful multi-millionaire entrepreneur. And in the passages above he is describing himself (an opinion I can back up from meeting him on several occasions). The Guru Guide … is similar, citing “natural leaders” willing to make “leaps” including the founders of Microsoft, Netscape, Disney, Home Depot, Ben & Jerry’s Ice Cream, Virgin Group, Dell Computers and Amazon to name just a few.
Both books are focused on the giants and wannabe giants – examining them for clues to becoming a trailblazing entrepreneur of the Sam Walton or Richard Branson stripe. Yet in my opinion the vast majority of entrepreneurs are not like that. Most entrepreneurs are normal people that wanted to work for themselves – either as freelancers or by employing people to help them execute.
These people are far from superhuman – many are, indeed, fearful of the downside risk of working for themselves. Yet many will have become frustrated by their lack of progress in the workplace – perhaps losing out to those that possess the confidence, guile and determination to dominate formal hierarchies. Others will feel that there is prejudice against them so that they are unlikely to prosper within a large organization filled with “people like us” (with them the outsiders).
A better perspective comes from small-business guru Michael Gerber’s important book on why most small businesses fail called The E-Myth Revisited (2004). Referring to the “entrepreneurial myth,” Gerber states that people start businesses for many reasons, although most businesses are not started by visionary entrepreneurs but by bookkeepers, barbers, plumbers, salespeople and secretaries who grew tired of working for somebody else.
“Great businesses are not built by extraordinary people but by ordinary people doing extraordinary things,” says Gerber.
Another strong book on this subject is Never Bet the Farm (2006) by US entrepreneurs Anthony Iaquinto and Stephen Spinelli Jr. They also de-myth the heroic entrepreneur, stating that start-up business people are just ordinary people with fears and faults like everyone else.
Indeed, a key proposition of Never Bet the Farm is to be realistic, stating that successful entrepreneurs are “risk managers, not risk takers.”
“You should never get comfortable with fear, nor should you try to conquer or ignore it,” they state – interestingly citing both Wal-Mart’s Sam Walton and Virgin’s Richard Branson as two among many who overcame fear-related handicaps to achieve their goals.
And closer to home there’s Rachel Bridge, The Sunday Times Enterprise Editor. Many of her interviews with British entrepreneurs from all walks of life have made it into several books, including How I Made It (2005). In the introduction she describes the typical entrepreneur, or rather she doesn’t as she states that entrepreneurs come in all shapes and sizes – “they can be old and young, well educated or not, male or female, naturally confident or painfully shy.” She also states that they can be the type of person that “dreams up a dozen new business ideas a day or the sort who has only ever had one – which may not even be original.”
“What makes the whole idea of becoming a successful entrepreneur so very exciting,” she concludes, “is that there are no rules.”
My own experience backs this up. At the height of the dotcom boom, I co-founded and became CEO of Metrocube, an “e-business” incubator that leased two no-frills office blocks on the trendy fringes of London’s financial district. We installed state-of-the-art technology with the goal of providing space for young dotcom entrepreneurs – getting them out of their bedrooms and into an environment where they could incubate their enterprises.
Ultimately the bubble burst and most of the young enterprises were carried out in a box. Meanwhile, we broadened our scope to include a diverse range of start-ups – meaning that in the three years of our operation we witnessed, and in many cases helped incubate, over 200 small companies.
As CEO I met every one of these companies as they applied to join the community. I also developed a strong sense regarding each company’s potential, or otherwise (and charged more or less deposit accordingly). The aim was to create sustainable enterprises capable of steady growth. If that generated an entity of 10 or so people, then that was seen as a great result. Yet – while the sustainable companies were run by people from all backgrounds and with varying personalities – I couldn’t help noticing they tended to have certain traits in common. These were my (totally unscientific) observations:
Clarity – the companies that worked had an obvious business plan, usually involving something that was already happening but where they had a niche or had an improved method of delivery or execution. Sure, the dotcom craziness made evaluations along these lines more difficult but I still learnt to be suspicious when someone couldn’t explain it to me in one sentence, or – worse – asked for a flip chart and pen to help me “get my head around it.”
Funding – most of the successful companies didn’t have any. Virtually all the companies that came through the door showing off about their venture-capital backers with deep pockets were driving at break-neck speed towards a brick wall. They kept talking about “rounds” of funding from ever bigger names, although few materialized. In fact, these were usually the companies demanding an entire floor and then wanting to spend a fortune on partitioning and furniture. Meanwhile, they had no income and were burning through their cash at a breathtaking pace.
Income – the survivors came in many guises but they all had income. Someone, somewhere was paying them for what they did, no matter what the amount. This may seem obvious, but it isn’t.
Costs – the successful companies were tight as hell on costs. They hated spending money and would argue me down on every expense. These guys would take the cheapest space we could offer simply to get in the building at minimum expense. They had a survivor’s instinct for keeping the costs as low as possible.
Ego – the losers had it in spades. I developed a “bolloxometer” when talking to the CEOs and other cocky seniors. Every time the company seemed to be run by an egomaniac, my bolloxometer started flashing red. These characters were great talkers but had no idea how to nurture a company – and its people – from the ground up. They soon disappeared, usually to something “more scaleable” that they’d “cut me in on” or some other nonsense.
Having said this, egotists are also optimists and virtually every book on starting a business states that optimism is a necessary ingredient, which runs counter to the natural pessimism of the High-FF. Yet again, I disagree. In a lot of cases blind optimists were the maniacs careering over the cliff while the cautious pessimists were the ones pursuing a well-developed plan that had covered most downsides.
Sales – a surprising number of companies had nobody focused on sales, which – for any small company – is suicide. As CEO of Metrocube, and for Moorgate, I saw and see my key role as sales. If the chief executive is not bringing in clients, he or she is either the office manager, which is an expensive indulgence for a start-up, or no more than a cog in the machine – making themselves vulnerable to the person doing the selling. The exception to this is the consultancy type firms, where the clients are looking for the CEO’s expertise – making sales and execution a tough balancing act.
Flexibility – as stated, as Metrocube sailed into the dotcom maelstrom we had to broaden our offering to become an incubator for all start ups. This worked because the building’s high-tech spec was starting to attract more than the dotcoms. Yet this need for flexibility also worked for the start ups that came through our doors. Many began with grand ideas about online exchanges or online retail operations, for instance, and ended up being software providers for major corporations looking to develop their own internet offering. The CEO usually seemed happy with this – almost relieved – although we noticed the trendier and flakier hangers-on drift off at this point.
Exit – most of the successful companies in Metrocube had one eye on “value realization,” such as a trade sale to a larger rival. But there were limits to this. Those convinced they would be “IPOing” in six months or so were invariably talking rubbish. However, I noticed that companies with an exit over the horizon, or at least as a long-term goal, tended to have a more professional set-up. That said, companies looking for a short-term sale looked and acted, and in many cases were, fakes – their lack of long-term commitment standing out like a beacon.
Commitment – which brings us to the biggest determinant of them all. It was difficult to tell from the first meeting but within a few weeks it was pretty clear who was committed and who was just having fun or filling in time before college or the consultancy career. Time in the office was a good sign – with those in before eight the clearest winners. Those strolling in past 10 may as well not have bothered (and after a while few of them did).
Oddly, the opposite was true at the other end of the working day. Those staying late into the evening were often disorganized lifestylers not taking it seriously, while those that meant it were gone by eight at the latest. And the all-nighter brigades were also likely to be a flash in the pan. Pool tables, dart boards, fridges full of beer and loud music always made me nervous – all clues that they were playing at it.
I also noticed that commitment was a long way from passion – an emotional fuel that looked easy to conjure in my view, and just as easy to switch in another direction. It was the entrepreneurial equivalent of a one-night-stand – capable of steaming up the windows for a brief but intense moment but hardly what’s needed for the long haul. Commitment, meanwhile, was like a marriage. It spoke in measured terms, had a long-term horizon and, as for passion: well that had given way to hard graft and a focus on delivery.
Sustainable entrepreneuring is, therefore, a long way from the swashbuckling land of heroes often described. It requires hard work over a long period, strong organizational skills and grounded salesmanship. What it does not require is genius or headless bravery or, importantly, uniquely High-AM traits such as over-confidence or blind optimism. Gerber’s E-Myth … concurs with this view, making this an important book for the recovering High-FF entrepreneur. He states that tales of women and men defying all odds to win fame and profit are rarely true and a false god for those pondering a start-up business. The real story is the initial spark of entrepreneurial excitement dissolving into “terror, exhaustion and misunderstanding.”
Yet such descriptions should not deter the recovering High-FF – far from it. Terror is our natural state. We should be able to cope with it better than those High-AMs who may truly experience fear for the first time once the support mechanisms of a large organization disappear. Certainly, as an entrepreneur I spend my days in a state of fear – especially in December when our annual PR contracts are renewed (or otherwise). But I spent my days as a banker in fear. The difference now is that I’m in control. It’s fear with the frustration removed. And that is the fear of freedom, which tastes a whole lot sweeter.