During these past 25 years or so, I’ve spent the majority of my time launching start-up companies. To be fair, many of those have been brought forward by more insightful entrepreneurs to whom I simply acted as an investor and catalyst. With the passage of time, it has become clear that the people are often as important (or more) than the product. It has become clear that would-be entrepreneurs need advice as much (or more) as they need cash. And, it has become clear that the road to success is fraught with both internal and external perils.
Along the way, three distinct risks have materialized. The first is at launch and is the most obvious. As a new enterprise is bringing together the various components required (usually money and manpower), testing ideas that are often little-more than concepts and pushing the limits of their ability and fortitude, the fledgling business is exposed to the widest variety of risks.
Once past the launch, young entrepreneurs often fail to anticipate the third-year stretch. This is when the company has survived, but fatigue and infighting have replaced inexperience as the main threat to success. The imagined life of a small business owner with flexible hours, financial gain and greater independence is overwhelmed by the stark reality of long hours, limited resources and endless government forms. Partners battle with parity of sacrifice and seeking personal balance.
Like all phases in life, the stretch gives way around year seven to the baron. At this point, the company has succeeded in becoming established and is working its business plan. Money, time and other benefits are flowing. Entrepreneurs are lauded as brilliant, handsome and charming. Sycophants circle like ants at a picnic. As the prototypical American entrepreneur Ben Franklin said, “Success has ruined many a man.”