Entrepreneurship is often celebrated and romanticized. There is no shortage of success stories, nor harrowing tales of companies rising from the depths to conquer their challenges. What is rarely shared publicly are the stories of business failures. A common statistic we see is that 90 percent of startups fail. Regardless of where the true failure rate lies, it should be obvious to everyone that entrepreneurship is a very challenging job.
Most entrepreneurs lack many valuable resources. They do not have enough capital, time, knowledge, team members, or luck. That means they are required to wear many hats. They are taking on tasks like HR, accounting, marketing, legal, finance, and others. Naturally, they are not experts, or sometimes even broadly knowledgeable, about these business functions. This problem is exponentially more challenging for first-time entrepreneurs.
How, then, do these daring individuals succeed — or simply survive? They seek advice and guidance from family, friends, mentors, consultants, peers, and entrepreneurial support professionals who seem to know more than they do about whatever issue they are facing. I posit that the hardest, most critical task of a founder/CEO is receiving all that external data and formulating the best course of action.
It is an extremely difficult task because frequently the advice is contradictory. Too often, well-meaning sages tell founders what they think they want to hear. Of course, entrepreneurs can be biased to hear what they want. But two core issues are worthy of a deeper dive.
It is scary when an entrepreneur realizes that they are ill-equipped to make an important decision. If they choose incorrectly, at best their egos are hurt; in the worst-case scenario, the company folds, and people are left jobless. That is a heavy burden.
One coping mechanism entrepreneurs deploy is taking the path of least resistance. When faced with what seems like a roll of the dice, why waste valuable time and mental resources trying to make the perfect decision? Picking the quickest, easiest, cheapest solution seems perfectly reasonable. Unfortunately, this tactic is not likely to capitalize on the experience and advice of those who were originally asked for help.
A second, more sinister coping mechanism is the abdication of responsibility. All of us passionately protect our reputation and ego. As a result, entrepreneurs can easily fall into the trap of shifting responsibility and consequences to someone else. If an industry expert says to hire that vendor or chase that market segment, and things go wrong, then fault lies with the expert, right? Having someone else to blame might create a sense of safety, but the buck stops with the founder/CEO, and they pay the price, not the expert.
Entrepreneurs, I beg you, do not take the easy way out. Own it! After all, you likely launched your venture due to your desire not to work for someone else and to be in control of your own destiny. Blindly following advice and abdicating responsibility are not ways you accomplish those goals.
Lastly, entrepreneurs need to understand how consultants and mentors differ and when is the appropriate time to engage one or the other. Consultants are vendors paid to provide the best solution to whatever problem you face. They can be invaluable when the gap in knowledge and internal resources is too great for a challenge to be resolved with just friendly advice and hard work. They hold themselves out as experts, staking their reputation and ability to do future work on the quality of their results. They boast a demonstrated track record, have business insurance, may provide a warranty, and can be carefully evaluated and compared with other consultants.
Mentors are something entirely different. In my next article, I will discuss in detail what makes a good mentor and why they are so important to entrepreneurs.
A lifelong entrepreneur, Quinten Messbarger is the former president and CEO of the Missouri Innovation Center.
