So, why do things go wrong? What can entrepreneurs do to avoid such mistakes which can go potentially fatal for businesses? Or are such failures the rocket fuel that take businesses to the next level? Lets start by taking a closer look at why failure happens. According to me, there are multiple areas where entrepreneurs err:
Too much Vision: This is where the long-term thinking gains precedence over the short-term. In the entrepreneurs world, crafting the perfect future means starting to live in that imaginary world and disconnecting with the reality of today. Vision is necessary but it also needs to be complemented with a clear path to getting there.
Wrong Idea: The assumptions behind the business may not wrong. The entrepreneur may be blind-sided: passion for one area could lead to ignoring another area. So, the idea for the venture itself may be questionable because the entrepreneur may not have applied multi-model thinking to it.
Wrong Product: This is related to the previous point but in this case, even though the problem may have been identified correctly, the solution to address the problem may be wrong. It is very important to be able to distinguish where the error was made in identify the need for the market, or in creating the solution.
Inability to Sell: This is something that technology entrepreneurs can be afflicted by. The belief is: build it, and they will come. Because the entrepreneur believes that the product is a terrific idea, little attention is paid until it is too late on how the selling will be done. Marketing can cost money and is often ignored. In fact, the distinction between marketing and selling isnt even clear to many entrepreneurs.
People Mistakes: People are critical to every venture, and an entrepreneur can make mistakes in hiring or in allocating responsibilities. At times, there is a position to be filled and so the first person who seems to fit the bill is hired. This may not always work well. People mistakes are hard to undo because after a time every person carves a niche for themselves in the company and even though they may not be doing the right thing, an entrepreneur finds it hard to accept that a mistake was made and that an alternative can be found quickly.
Flawed Execution: This essentially boils down to bad management. Most entrepreneurs tend to be passion-led, rather than process-driven. So, many decisions are made intuitive and ad-hoc rather than backed up with up a lot of deep thinking. At times, this works but at other times, it can fail. Businesses do need processes and a framework to execute well and it is not easy for the entrepreneur to build that discipline of execution across the board. So, when things are going well, the flaws are hidden, but at the first hint of trouble, the cracks can get magnified.
Tomorrow: Why Failure Happens (continued)
TECH TALK When Things Go Wrong+T