Hooray! This week, we celebrate the 10th anniversary of Thinkergy, the Asian innovation company that I founded. Most start-ups never make it through the roughs and troughs of their first decade, and we feel very grateful that in fact, we did survive! Nowadays, many people consider leaving the rat race to start their own business and become an entrepreneur. Do you know in earnest what you’re up to? Please allow me to use the auspicious occasion of our ten year company anniversary to share with all wanna-be-entrepreneurs ten entrepreneurial lessons from a lucky survivor.

1. Know that the odds are against you. We all heard the success stories of celebrated entrepreneurs like Steve Jobs or Richard Branson who created glamorous business empires out of nothing. But we don’t know the stories of all those many, many entrepreneurs who failed with their start-ups (due to the survivorship bias that we also talked about in the last column). Statistics on business failure rates show that roughly half of the companies don’t survive their first five years, and that 70-90% don’t make it to the end of their first decade. How can anybody dare to enter the entrepreneurial business given these odds? Well, all start-up entrepreneurs believe that their case is different and that they will be among the survivors — a bias that behavioral psychologists call “Positive Illusions”. So let’s acknowledge it: You’re much more likely to fail than to succeed with a new entrepreneurial venture. How to sanely deal with the uncomfortable truth?
2. Confront the facts yet have faith. In his book “Good to great”, Jim Collins identified a useful and apparently paradoxical practice that most of the featured top-performing companies maintained: Honestly confront the brutal facts of your current reality, yet always have faith that things will turn out well in the long run. Adopt this practice as you start and build your venture.
3. Improve your odds of getting lucky. Clearly, given the poor odds of your start-up surviving its first decade, you need more than a great business idea and sufficient personal, social and financial capital to succeed: You need to have a lot of luck. And how can you try to “force” your luck? Heed to the advice of Thomas Edison: “The more I do, the luckier I get.” Then, get ready to work your ass off in the coming years and even decades.
4. Deeply love what you do. Can you imagine yourself happily working your ass off day-in, day-out in a venture that doesn’t enormously excite you? Clearly, you need to be extremely passionate about what you do. The essence of your business and your role in it needs to fit your personality, your talents and strengths, your interest and passion. Most successful entrepreneurs deeply love what they do, and hence enjoy doing it all the time. As my team mate Bill Tucker likes to joke: “As an entrepreneur, you work 24/7, but you can choose what hours you want to work.”
5. Focus on making meaning, not money. Many people want to start their own business to become rich. If you think along these lines, better work in a well-paying job. Given the start-up failure rates, your chances to make a lot of money are higher if you pursue a corporate career. As Guy Kawasaki suggests in his book “The Art of the Start”, your prime motivation to start your own business should not be on making money, but on making meaning: Create a valuable new product, service or solution that improves people’s lives and makes the world a better place. Ideally make your business idea cater to a wider, unsatisfied need of consumers, other businesses or society — the wider the need, the easier it will be to scale your business later on.
6. Take a long view on your venture. What does it take to create original, meaningful new products and services that form the solid foundation of building and growing a truly great business? Time. Don’t rush launching another “me too” product or offering another “quick fix” solution. Take the time you need to create a truly new, meaningful value proposition that differentiates your venture from other players in the market.
7. Have a game plan, but be flexible. For every major phase of building your business (e.g., creation, launch, growth, consolidation), create a strategic roadmap that outlines your strategic action ideas that you want to execute in each year to move you toward the next phase of business evolution. Use your game plan to roughly guide your actions toward achieving your goals, but be flexible: Your plan is likely to get affected by unforeseeable changes in the highly dynamic modern business environment (such as emerging new technologies, unexpected market trends, or surprising macroeconomic shake-ups) and by execution delays (i.e., most projects take much longer than people initially think, which is known as the planning fallacy bias).
8. Keep track of the score. In the entrepreneurial start-up game, what is the most important financial figure to track? Cashflow. Building a business requires upfront investments and related cash outflows. Most start-ups that don’t survive run out of cash at some point of time — often even though they have confirmed orders or booked revenues (that however, typically don’t translate into cash inflows immediately). So closely check your cashflow score if you want to stay in the game. Moreover, know what’s your “affordable loss” (i.e., how much money you can still afford to invest in your business) and your “red line” (the cashflow floor that you cannot undercut without endangering the financial viability of your venture).
9. Give more to get more. In business, many companies over-promise and underdeliver. If you want to stay in the entrepreneurial game and make your business flourish, follow the opposite strategy: under-promise and over-deliver, and keep your promises. “Doing business is easy”, confided my entrepreneurial buddy Svend Nelson to me a few years ago: “Give your clients much more value than they expect to get. Make them insanely happy with what you give to them, and they will come back and want to do more business with you.”
10. Stay humble and grateful. If your business flourishes against all odds, resist the temptation to become overconfident, proud and self-centered in attributing this success to you. Silence your ego! Stay humble and be grateful to all those who really made your venture rise: Celebrate the people in your team who give you their hearts and minds, and their time and energy to jointly build a great business; treasure your customers (especially those loyal patrons with repeat sales) who trust in your products and delivery abilities in return for giving you their money; acknowledge your suppliers and business partners who support your business with their services and know-how; and show appreciation to any investor or financier who provided you with permanent or temporary funding.

© Dr. Detlef Reis 2015. This article was published in parallel in the Bangkok Post under the same title on 6 August 2015.