John Bradberry, the author of “6 Secrets to Startup Success“, spent over twenty years as a business advisor and strategist, and has improved the performance of more than a thousand leaders and hundreds of teams. Since 1997, he has led an independent consulting practice focused on helping businesses of all sizes elevate performance and achieve healthy growth.
Here is part one of a three-part interview with Bradberry about how passionate entrepreneurs can channel their energies and focus into the right areas, as well as what to avoid, to improve their chances of success.
You state that “entrepreneurial passion is a double-edged sword”. Would you explain why?
Bradberry: Entrepreneurs are famously passionate. They are true believers, full of optimism and confidence. Just about every highly successful founding team I’ve studied has propelled itself forward with an unshakeable sense of commitment and belief. And this passion is vital, because the startup process is usually harder than it looks. The road is longer and more stressful than anyone expects. Passion provides the fuel and builds resilience, and it’s contagious in the most positive sense. The more passion a founder brings to his or her business, the more likely it is that their idea will get attention and catch fire.
But there’s another edge to entrepreneurial passion. I’ve noticed that failing entrepreneurs brings just as much passion as those who succeed; sometimes even more. When I look closely at this, I notice a pattern which would-be entrepreneurs fall in love with their ideas. They become emotionally attached. They begin emotionally attached. They begin to believe that success is a sure thing. They believe that they will take the world by storm if only they can find enough funding.
As a result, a lot of new founders I come across are hyper-passionate but under-prepared. They see the future through rose-colored glasses, over-estimating all the good things that can happen and minimizing or completely dismissing any negative possibilities. Too often, they throw themselves over the startup cliff without a sound plan, and without a parachute.
What is the passion trap, and what are some of its common negative effects?
The passion trap is a pattern of destructive choices and behaviors that occur when a person falls in love with an idea. It is rooted in a basic truth: your intense devotion to your business concept can bring danger along with its obvious benefits. The negative effects of entrepreneurial passion include:
Founder misalignment. A bad fit between what the founder brings to the table and what the startup really needs. Some passionate founders are overly involved in every aspect of their business. Others focus only on the things they love to do. Either way, this lack of fit constrains the business’s ability to thrive and creates a lot of frustration on the part of the founder.
Missing the market. Passion-trapped founders assume market demand where none exists, and they are slow to acknowledge that weak sales may signal that their idea is not viable as a business concept. Rather than responding constructively to disappointing sales, they find a range of excuses to explain them away.
Rose-colored planning, or none at all. Believing they’ve discovered a can’t-miss idea, overly optimistic founders estimate sales based on what’s possible, rather than what is practical or likely. As a result, they greatly underestimate how long it will take, in realistic terms, to reach their financial breakeven point, and what it will cost to get there.
An unforgiving strategy. Overconfident entrepreneurs sometimes put the lion’s share of their available resources into a single, high-cost commitment, leaving little margin for error. They adopt a bet-the-farm approach before their idea has been validated in the marketplace. All their eggs are in a single basket, and few good options remain when the basket hits the ground.
Reality distortion. Passionate founders surround themselves with other “Kool Aid” drinkers and receive little constructive feedback. They are swayed by a psychological tendency to seek out data that validate their vision and to ignore or deny anything that can be considered bad news.
Evaporating runway. All of the negative effects I have mentioned can, together, bring a deathblow to the startup by causing the founder’s startup “runway” to evaporate before the venture can safely lift off the ground. The new entrepreneur runs out of cash, time, or support before he or she can generate enough sales to make the business viable.
How does it typically sneak up on founders? Are some personality types more vulnerable than others? Are there any early warning signs?
One reason the passion trap sneaks up on founders is that passion feels great. There is something magical about the entrepreneurial plunge, when a person commits to the startup path and the promise of future glory. In my book, I use the story of Icarus, the boy from Greek mythology who flew too close to the sun, as a metaphor for the passion trap. The higher Icarus flew, the more exhilaration he felt, and this passion ultimately drove him to his death. In entrepreneurship, some of the qualities that propel us forward and feel so great – qualities like optimism, confidence, commitment, faith and belief – can also bring danger when taken to extremes. Confidence can harden into arrogance; extreme commitment can narrow into a kind of tunnel vision; and faith can become blind optimism.
Another reason the passion trap is so sneaky is that it operates largely at an unconscious level. Cognitive biases cause us to see what we expect to see, and what we want to see. Our thinking becomes anchored around our first ideas and plans. We hear and embrace supportive comments from friends while dismissing “naysayers” who (we think) don’t understand our concept. We bend and filter incoming data so that they conform to our preconceived notions.
I have identified a set of personality traits that seem to predispose a person to being trapped by their entrepreneurial passion. A few examples are confidence, which under the influence of passion is amplified into arrogance; independence, which at extreme levels looks a lot like stubbornness; and creativity, which at extremely levels results in a lack of focus and difficulty communicating.
There are early warning signs that can help a new business founder determine whether he or she is in danger of falling into the passion trap. Passion may get the best of an entrepreneur if he or she is:
- Thinking or saying, “This is a sure thing!”
- Losing patience with people who point out risks or shortcomings in his plan
- Measuring progress by how good she feels
- Assuming that she is entering a space with little or no competition
- Counting on immediate revenue to avoid financial problems
- Plotting global domination before releasing his first product
- Hearing great “buzz” but finding few (or no) paying customers