Make Sense of Entrepreneurial Uncertainty
Halfway through closing the xelera risk-free pilot, one Issue keeps coming up when talking to entrepreneurs: despite having super interesting ideas many entrepreneurs don't know how to navigate the extremely uncertain waters of early-stage entrepreneurship.
Navigating – because that's exactly what entrepreneurs are required to do: plan ahead, gather as much data as they can, execute, tweak and change when required due to changing circumstances or unforeseen outcomes and plan all over again. It is a very difficult process.
Things become even more confusing during these extremely uncertain times. Startups need to stick to the core principles that make the basis of their entrepreneurial venture, yet be as agile as possible to adapt to shifts in paradigms that may occur.
As entrepreneurs ourselves, we relate to such feelings of confusion and sense of vertigo. This is the main problem we are trying to solve at xelera - our mission is to simplify the entire entrepreneurial journey making it more accessible, straightforward, and easy to navigate.
We put together a list of actions that might help make some sense of early-stage venturing:
1. Always think about the problem you are trying to solve.
Nowadays most entrepreneurship experts recommend that the entrepreneurial journey start with a problem definition. In other words – every startup needs a problem to solve.
During our time as MBA students, our professors kept saying that the best startups offer a pain killer, meaning that they solve real problems for real people.
In the past, sailors used to keep track of their route during night time by tracking a single star. This way, no matter how rough the waters became they were able to stay on course as much as possible.
As an entrepreneur, the problem you are solving is your navigation star – when things seem the most confusing and when waters get rough, look to the problem you are solving and the solution you offer. Then you can plan (or re-plan) the best route for you and your team to reach the solution.
2. Derivative of point 1 – repeat your mission statement over and over again.
"There is no way I know, to get through the pain of a startup without belief that the mission really matters" (Sam Altman, former president of Y-Combinator).
Entrepreneurship is tough and exciting at the same time. Many have compared entrepreneurship to a ride on a roller coaster. To me, it more resembles a bumpy ride in a SUV. If you have been on one you must know that it mostly feels like being kicked and bumped in your behind. Every once in a while you reach one of those breathtaking viewpoints, trying to breathe in the fresh air and take a shot of the view before getting back on the road.
Similarly, if you wish to go through the entrepreneurial journey and keep your sanity you must have a clear mission statement and keep repeating it internally and externally – to your team and to your customers/other stakeholders.
The more ambitious your mission is, the more exciting those "shortstops" get. Learning that someone actually finds your solution useful, or that your value proposition makes sense to other individuals beside you and your team makes every bump worthwhile.
3. Don't be afraid to make decisions.
Forget what they told you; there are always right and wrong decisions. In an optimal world, decisions are being made under full clarity of the situation and after gathering all relevant data. Unfortunately, in reality things are less idyllic – as Eric Reis (the author of the "Lean Startup" book) puts it – you will mostly work to "…create (your) product or service under conditions of extreme uncertainty".
This actually means that you will be working with little data to support your decisions, with many unforeseen events and unknown actors around you, and that taking no decision is sometimes worst than taking a bad decision.
The bright side - all other entrepreneurs around you are working in the same conditions.
4. Don't be afraid to rethink your decisions.
So you went through the intimidating process of decision making under extreme uncertainty.
One of the first lessons an entrepreneur needs to learn (though some are natural in doing so) is to always rethink your already over-thought of decision.
It is actually something I learnt during the army being a company commander in the IDF's officers training school: when executing tasks and planning ahead under extreme uncertainty – the best practice is not falling in love with your earlier decisions. We have been trying to initiate a pilot for 3 months before we managed to sign our first pilot project. Only after we halted and rethought our initial assumptions and decisions were we able to understand the basic problem we were facing – and deal with it by taking an entirely different decision that enabled us to achieve our objectives.
5. Fail and learn.
"We need to accept that we won't always make the right decisions, that we'll screw up royally sometimes – understanding that failure is not opposite to success, it's part of success" (Arianna Huffington, Co-Founder of The Huffington Post).
An inevitable result of the last couple of points is that you will often fail. You can fail big – realizing your entire project is not viable or sustainable, or you can fail small – learning that one of the many decisions you took along the way was wrong and requires correction. While failing is completely ok, as an entrepreneur you should do your best to learn from your failures and mistakes so that you will not repeat the same in the future.
6. Regroup every once in a while.
Get together with your team and with your partners to talk about the bigger picture and next steps. Not only we find planning ahead comforting, but also it usually allows you to recalibrate your goals, objectives and the general route to achieve them. When you can't find your way try to stop, look at what you have done so far, analyze the information you already have, and get back on track.
Although keeping the big picture in mind is always good advice, we suggest you set realistic short and medium-term milestones in your way: get the financials ready by the end of the week, send out a survey to X potential customers, determine your cost structure, etc. Go at it step by step, just don’t miss out on the unforeseen opportunities that may present themselves along the way.
7. Keep validating everything.
Don't fall in love with your assumptions. Always listen to other people's suggestions and treat it like the best lesson you can get. It is usually true.
Along the way we presented the idea behind xelera to many different people, some of them understand the entrepreneurship ecosystem, some of them are completely new to some of the most basic ideas. Both provided valuable insights and food for thought on the bigger picture and the smaller details. Most of the advice we implemented. Some we politely discarded. We are grateful for any and all constructive feedback and those who provided it.
Just a few days ago we were on the phone with one of our former MBA colleagues: "Why do I need you?" he asked. Trying to answer his question we realized that we have somewhat abandoned this very important point, falling-in-love with our semi-validated assumption and not even working on framing the answer.
His blunt question opened the door to a long due discussion between us, the co-founders of xelera, and our most important stakeholders. We believe only good things can come out of this.
Having said that, don't constantly stop to check and re-check your former assumptions. As Eric Reis describes: "the lean startup method is not about cost, it is about speed".
And it's true: on one hand, we surly have more half-baked assumptions we are currently taking for granted, on the other hand, if we hold our progress until we validate every single one of then – we wouldn't be able to get anything done.