The world is filled with “Wanna-preneurs”. Aspiring, earnest optimists who’ve accomplished nothing and yet dream of everything.
There’s hundreds of thousands in this club with new people joining every day. This is largely a good thing, but that’s besides the point.
The pull of entrepreneurship is simple: It’s an intoxicating emotional experience to start working on your own business idea.
When you start playing with a brand new dream or project, the human brain automatically enters a state behavior psychologists describe as “Uninformed Optimism”.
This is when you don’t know what you don’t know. And you’re pumped about that!
Uninformed Optimism is a fancy way of saying naivety. It’s the breathless energy of the newly minted entrepreneur talking a big game in a coffee shop. They’re convinced of the size of the opportunity and profoundly unaware of the numerous challenges and obstacles that lie between them and their goal.
As an entrepreneur executes, they slowly move from a state of being uninformed… to being informed. Experience begets learning. Their knowledge and domain experience of the industry or space they’re trying to build a business in deepens and broadens.
Simultaneously as this is going on, the entrepreneur will start to face challenges. The assertions and assumptions of their original business plan and hypothesis – whether they wrote it down or not – will start to get tested.
This is the process veteran, serially-successful entrepreneurs lovingly refer to as “earning your battle scars”. Realizing that if it were easy, everyone would be doing it … is a tough pill to swallow.
There comes a day for every entrepreneur when it feels as though there are hundreds of reasons why this idea won’t ever work out.
At this moment, the transformation is complete: The uninformed optimist has become an informed pessimist!
This is the place that the vast majority of wannabe entrepreneurs give up entirely. It’s a shame, but it does clear out the marketplace for those who have what it takes.
The reason so many give up is logical. That’s why it happens so often. When you know enough about an industry to know several convincing reasons why an idea won’t work, why on earth would you proceed with it?
The people (and journalists) – who armchair quarterback the startup world – know this feeling well.
With a decent grasp of an industry’s fundamentals, it’s easy to feel well-equipped to make these judgements. It’s always easier to tear ideas apart than it is to make them work.
Overcoming the mindset of informed pessimism – not dodging it but the actual experience of pushing through that state, finding product-market-fit and a valid business model on the other side of it – is precisely what’s required to make wannabe entrepreneurs become real ones.
Taking an exciting idea through the crucible of market feedback and testing to the point where any other sane person would find dozens of reasons to give up… is kinda what entrepreneurship is about.
Every entrepreneur I’ve spoken to over the last ten years has described experiencing an irrational moment of continuing despite all the signs saying it shouldn’t be done. And of course, that moment was always the genesis of everything that changed the game for them.
Of course, some ideas should be quit. Total idiotic myopia is a thing. A bad idea worth abandoning is one where the unit economics are completely broken. Or, where you don’t know how to build anything besides a me-too business that cannot differentiate itself.
Aside from those exceptions, if you want to be a successful entrepreneur you need to anticipate the mental state of informed pessimism. Training yourself to think not just of the reasons why your business won’t work, but also to ruthlessly seek out the one reason why it could.
So you’re saying there’s a chance…
In order to win big, entrepreneurs must set aside the reductionist, rational lens for analyzing their business and it’s odds of winning.
The simple formula is to start a search for “Reasons Why”
(You can entirely trust your paranoid unconscious mind to continually search out the “Reasons Why Not”)
There are places to go and specific things you can do to counteract informed pessimism thought patterns:
I remember back when Commit Action was 20% the size it is today, growth was stalling and I was having trouble keeping the faith. By chance, a report I ran showed me a segment of our existing customer base had the most unreal Life-Time-Value.
I was served with a powerful reminder that people really valued what we were doing, that they were voting with their wallets each month. In the face of dozens of “reasons-why-I-couldn’t” that I was facing, this one realization became a powerful “reason-why-I-can”. 5x the growth later, I’m glad I found it.
Allowing yourself to do unscalable things – as an entrepreneur – is another important tool for combatting informed pessimism. The founders of AirBNB could have (famously) stared despondently at their chicken-and-egg network building problem and found every reason why they couldn’t get the egg to hatch into a chicken… but instead they went out and did irrational, unscalable hard work that jumpstarted the platform.
Connecting with the customers who value you and temporarily doing horribly unscalable things are just two of the hacks. You’ll find many more breakthrough reasons for rational optimism, when you embrace the top level philosophy of looking for a reason your idea can work. You’ll win when you do the work of finding hard-won optimism through patient execution.
That’s the thing. Reasons your company shouldn’t exist will find you like homing missiles. It doesn’t take any work. People will be falling over themselves to tell you all about it.
The work of entrepreneurship – the actual challenge itself – is to receive all that feedback from the market and learn from it. To feel the fear. Then, to go make something happen anyway.