Hubris according to Merriam Webster is a great or foolish amount of pride or confidence. I meet and talk to a number of entrepreneurs and investors, I am always on the lookout for characteristics of Hubris. I am not being judgemental, but what hubris does is it gets in the way of learning. If you are super confident about yourself or pride yourself about what you know you are eager to learn. I see it mostly in those who have money, they act like they know it all, unfortunately nobody does. I have seen it even more when I used to work in the bank and when I walked into the trading room and when the market was going up, you could feel the pride and self confidence swelling in the room. Oh, yes, I have smoked this feeling too but I never inhaled (famous words spoken!).
I always remind myself to de-link my identity or my pride from the success or failure that I face. Believe me I have faced plenty of both, failure used to hurt me and success used to make me feel like I am the king of the world. I have been doing a lot of thinking and practising flipping the switch on these feelings, i.e be humble when I see success and become extremely curious, open minded and in a positive learning state of mind when I see failure, just like a scientist or explorer should. I think I am onto something here…
I have written about being humble, humble is the word that I would like to remind myself when I see entrepreneurial hubris. I find that I don’t learn when I am feeling hubris, I tend to think I know it and guess what? the Universe has a way of knocking me on my back. I have tried to learn from it but it is hard. Your ego is hurt, you start to look for escape clauses to lick your pride and start pointing fingers at everything else to absolve all responsibility. I think that is a wrong but normal human reaction. There are too many instances to write about and I will just stick to writing about my radical self inquiry around these events.
Startups or being an Entrepreneur is to be a problem solver. You cannot get every problem right, you screw up sometimes. The learnings that you get out of those screw ups is what I want to focus on. Most startup founders struggle with the 3 big milestones of starting a business and building a team. The 3 big milestones that every entrepreneur needs to focus on are:
- Product or Service to Market fit – the question you need to ask to achieve this milestone are, do you know the size of your market? do you know how to get in front of the market? do you have something unique, different or valuable to offer this market? Does the market value it the same way as you do? Are you able to make the market choose your offering? what is the cost of making the market to choose your offering? How long would it take to get in front of the market and in what quantity would it cover the cost of the offering? You would be surprised how many entrepreneurs that I meet who have not thought through this. The expectation is not that you have thought through everything but you need to have a clue on how to get in front of the market to experiment and find answers to the other questions.
- Revenue scaling – Do you know how to scale your revenue, given you have solved the first milestone problem? What rate can you grow the revenue? What is the cost of growing the revenue? How long will it take to pay for the cost of achieving revenue scaling?
- Internationalization – Most of the startups and entrepreneurs that I see understand the need to build products and services for the global market because you can. I have written about how cost effective it has become to start companies, but that is it… it is easy to start something but it takes considerable resources to build a company. Most entrepreneurs underestimate the capital requirement to scale businesses. I think the smart way is to know what market you are going after and what it would cost to become global. You don’t have to know all the numbers but a ballpark would help. For example, if you are building a Software As A Service (SaaS) business then it is relatively easy to estimate the cost of each of the above three milestones. And today every software business needs to be SaaS business otherwise you are doing something wrong or you are in a very specialised business which is going to take you much longer to achieve the first 2 milestones. Internationalization requires a huge amount of time invested in cultural understanding, communication and allowing international teams to absorb and volunteer their hearts and their minds to what you are doing. I have seen so many investors get so impatient with internationalization. They believe it is magic. I can assure you there are no miracles and magic in building teams. It is hard work, experimentation and building trust.
I am usually dumbstruck when I meet Investors who invest in Startups who have absolutely no clue on how to get Startups and Entrepreneurs whom they invest in to achieve the above 3 things. They just expect magic to happen. Building a business is hard work, it takes effort, skills, perseverance and talent. I have seen investors throw the baby with the bathwater because an experiment failed. In addition, I also find Investors who are from one industry apply the principles or what worked in that industry to work in another industry that is totally different. Again it is not going to work. If there was a cookie cutter methodology to build businesses we would have figured it out and everyone would know it. The classic mistake that I see with Investors is to think that they know the business better than the entrepreneur. The truth could not be far from it. An investor needs to be a mentor, a guide, someone with experience willing to help the entrepreneur or startup founder along the way and to bring connections and networks that the startup founder or entrepreneur does not have. I have seen very few investors who fit this bill and the ones who fit the bill are usually the ones who have survived the test of time.
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