I had a blast speaking at this past week’s 2012 South by Southwest Interactive conference in Austin, where optimism reigned supreme. What else should we expect from a future-oriented crowd with a passion for innovation and entrepreneurship?
That’s why I opened my solo talk by highlighting an online battle that erupted in 2010 when Scott Gerber wrote an article called “Why ‘Be Passionate’ is Awful Advice.” Gerber’s piece focused on the importance of realism when launching a business, and he pulled no punches in describing motivational advice like follow your passion as “lovey-dovey utopian nonsense.” The article provoked an angry flood of comments on Inc.com (since removed) and Hacker News. Some comments defended startup passion (“Ignore his advice, because he doesn’t know what passion means”), while others rallied in support of realism (“I think passion is generally stupid”).
The most interesting aspect of the firestorm was an assumption that many comments seemed to share: that passion and realism are somehow opposites, presenting an “either-or” choice, where one subtracts from the other.
But when it comes to launching a business, this is a false choice. The most effective entrepreneurs demonstrate strength in both qualities. They bring extreme passion to their venture and they are fully realistic about what's required to make it fly. They create a reinforcing cycle between realism and passion, where clear-eyed scrutiny of an idea leads to greater clarity and confidence, further fueling the founder’s enthusiasm. It’s a state I call earned optimism, and it’s much more useful and valuable to entrepreneurs than the untested faith so prevalent among first-time founders with a just-hatched idea.
Unbridled startup passion can bring danger to startup teams. When we entrepreneurs fall in love with our ideas, we tend to make predictable mistakes, including:
- Assuming customer interest where little or none exists
- Fixating on product features instead of what customers want
- Overestimating early sales, and underestimating the cost and time required to reach profitability
- Rigidly sticking to a failed strategy until it’s too late to recover
If you’re a true believer in your idea, here are three principles for applying the right dose of realism to improve your odds of success.
1. Improve your fit as a founder. Legendary football coach Paul “Bear” Bryant said, “It’s not the will to win, but the will to prepare to win, that makes the difference.” Don’t confuse your optimism with readiness. Honestly assess how well your strengths and weaknesses match up with what the startup project needs from you, then do what is necessary to close any key gaps. This might mean bringing on complementary partners, or it might mean waiting six months so that you can get that extra piece of market experience you lack.
2. Allow the customer to shape your idea. No idea is more powerful than the marketplace, and you can raise your odds of success by allowing your venture to be shaped from the outside in. Stacy Madison and Mark Andrus dreamed of launching a health food restaurant in 1997, but lacked enough funding to do so. Instead, they started a lunch cart business, selling pita wrap sandwiches on the streets of Boston. To keep customers happy while standing in line, they gave out free pita chips. Customers flipped over the chips and convinced Stacy and Mark to try selling them in retail stores. The resulting company, Stacy's Pita Chips, grew to $60 million in sales before being acquired by PepsiCo in 2005.
3. Know your math. In the real world, every startup idea is subject to a few fundamental laws of economics. But passionate founders typically see the world through rose-colored glasses, creating unrealistic financial projections that set the business up for future cash crises. This can be avoided by taking a sober look at what is required to fund your dream, then crafting a game plan that provides you with plenty of staying power as you experiment your way forward.
What do you think? How have you combined passion and realism to propel yourself forward?
Pictured: a painting by Joe Carr used to illustrate the concept of passion vs. realism in John Bradberry's talk at SXSW