Q: Steve – I have an idea for a new product that will revolutionize the lighting industry. I cannot share it with you since my idea is in fact so incredible. The only person I have shared it with is my wife and she doesn't get it. So what I want to do is . . .
A: I probably get a half a dozen emails like this every year – entrepreneurs who are convinced that they have the Next Big Thing.
Maybe they do, but I bet they don’t.
And I say that, not because they have a bad idea – maybe it’s great, maybe it’s not – but because these folks are so convinced of their genius that they actually cannot see the forest for the trees. They are blinded by their own confidence.
This is an issue not a few entrepreneurs share.
Pundits like me love to wax rhapsodic about how great entrepreneurship is. We extol the virtues of entrepreneurs, proclaim their greatness, and blah, blah, blah. And we are not the only ones. If you have listened to the presidential campaign much, you would think that entrepreneurs are the solution to all of society’s ills.
I beg to differ.
Yes, I love entrepreneurs and entrepreneurship, most people reading this column do. But what about the pitfalls, the downsides of being a natural born entrepreneur? They are not insignificant nor are they few. Consider:
Falling under the ether: My brother sells real estate and this is the phrase he uses when a client falls in love with a property. Real estate professionals love when clients fall under the ether because they tend to stop thinking rationally and instead make decisions based on the emotion of really wanting that property. That can happen similarly when you test-drive that new car, right? Well, entrepreneurs can have a tendency to fall under their own ether.
This is also known as ‘Believing your own B.S.’
To be an entrepreneur – to chuck the job and security, strike out on your own and try and create something from scratch – requires uber-self-confidence. But there is a fine line between being very self-confident and being cocky.
One works and the other gets you in trouble.
Overselling: Another aspect of entrepreneurship is that you must enroll people in your idea, whether they be investors, customers, loan officers, or whoever. Because of that, it is easy for some entrepreneurs to overstate the case for their business; they may over-inflate the numbers on their business plan for instance, or talk about a big contract before it is ever signed.
The motto to remember is: Under-promise and over-deliver. not the other way around.
Risk taking: My dad loved to say that an entrepreneur is someone who takes a risk with money to make money. So yes, risk is part of the game. It is the juice. The problem is, because entrepreneurs have that gambler’s mentality, they can, at times, underestimate the risk involved. Or maybe they know the risk, but like it anyway. That’s probably even worse.
Think about Richard Branson – as great an entrepreneur as there is out there. Until recent years, he was equally famous for his derring-do: Hot air ballooning over the ocean for instance. He stopped such high-risk adventures when he saw that he was putting his life at risk, but the point is well taken:
Beware excessive risk-taking, entrepreneurs.
Not taking no for an answer: Yes, my entrepreneurial friend, you are probably a schmoozer extraordinaire, and that’s good. You have to be confident. You have to be creative. But you also have to be a critical thinker who picks up on cues. You need to know when an idea is a bad one, or a sale isn’t going to happen.
Sometimes, no really does mean no.
Today’s Tip: Speaking of Richard Branson, if you ever want to read a terrific book about him, pick up his autobiography, Losing my Virginity.
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Steven D. Strauss is a lawyer and writer and is one of the country's leading experts on small business as well as an international business speaker. The best-selling author of 17 books, his latest is the all-new 3rd ed. of The Small Business Bible. You can listen to his weekly podcast, Small Business Success Powered by Microsoft, visit his new website for the self-employed, TheSelfEmployed, follow him on Twitter, and "like" TheSelfEmployed on Facebook. You can e-mail Steve at: firstname.lastname@example.org. © Steven D. Strauss