As an online marketing consultant, I’m constantly being exposed to new companies and the entrepreneurs who are running them. After several years of meeting new business owners, I’ve come to notice a disturbing trend.
It took me a while to pick up on this pattern of behavior. There weren’t any red flags along the way, but rather, just subtle hints in passing conversation. The trend that I speak of is a systemic delusion of grandeur. Perhaps we can pinpoint the root cause of this delusion to the movie “The Social Network”.
In the 2010 movie that chronicles the rise of Facebook, we follow Jesse Eisenberg, who plays Mark Zuckerberg, as he grows from a Harvard freshman to the head of the hottest company in Silicon Valley.
The story of Facebook’s meteoric rise and other similar stories to come out of Silicon Valley (Groupon, Twitter, Square, etc.) have infected the minds of entrepreneurs. In an average consultation I’ll regularly hear terms such as venture capital, exit strategy, valuation, and more. Very rarely do I hear words that were much more common place just ten years ago, such as business plan, growth strategy, revenue forecasts, and other more mundane business terms.
But maybe I’m demonizing the Aaron Sorkin flick. Maybe I need to go back even further to find the culprit of this delusion. I suppose I could look to the summer of 1998. The temperatures were balmy, our president had just been impeached, and Michael Jordan had just completed his second three-peat. But these other national stories were dwarfed by what was transpiring on the baseball diamond. Sammy Sosa and Mark McGuire, now two disgraced stars of baseball, were in the midst of the greatest sporting competition in recent memory.
A homerun record that had stood for over thirty years was about to be shattered, not by one star, but by two. And better yet, they were going head to head to be the first to break the homerun record of 61, set by Roger Maris back in 1961.
Mark McGuire eventually bested Sammy Sosa by four homeruns, finishing with 70 and establishing the new record. But the breaking of the record wasn’t the greatest impact the two of them had. By captivating the American public with their competition, the two baseball players made Homeruns sexy. In fact, if it wasn’t a home run, who cared? A game winning single RBI just didn’t have the same penchant as a 400 foot dinger over the left field wall.
And maybe the new generation of entrepreneurs was watching a little too closely. They became obsessed with the idea of homeruns. They didn’t want to bunt to advance the runner or reach first base on a grounder. No, they wanted to point to the bleachers, grip the bat until the wood creaked, and crack a ball out of the park. And this mentality stayed with them when they entered the business world.
Most businesses aren’t homeruns. In fact, the vast majority are strikeouts. The lucky few end up as base hits, doubles, and if they’re really lucky, a stand up triple. Drive down any street in America and you’ll see small businesses lining the road. They have only one location, a loyal customer base, and provide decent livings for the owner and a handful of employees. That’s the reality of American business.
However, despite this reality, most new business owners I speak with believe that they are sitting on the next DropBox or Twitter. They have their five year exit strategies (most ending in acquisition or going public) and they all have stars in their eyes when it comes to valuations. And I believe that this mentality is also causing the astronomically high rates of business failures.
Running a business is extremely hard. There are days where you’ll wish you’d just stayed at your last employer and never had the bright idea to set out on your own. And in these difficult moments, if your expectations are at sky high levels of success, they can betray you and actually demoralize you.
By all means, please aim for the stars and have high hopes for your ventures, but base your expectations in reality. Just because, as a business owner, you weren’t able to receive a twenty five million dollar seed round of funding doesn’t mean you’re a failure. For every Facebook, there are millions of Joe’s Carpet Cleaning shops or small ecommerce sites.
As an entrepreneur, you don’t want to look back on your career and be likened it to the washed up high school sports star that could never let go of the dream. You know who I’m talking about. The guy that sits in the bar, wearing an auto mechanic’s shirt, but hating every minute he wears it. He regales strangers with stories of his game winning drive back in 1983. He played a bit of college ball but never got a shot at the pros. Disillusioned, he stumbled through life, upset that he never hit the big times.
Entrepreneurs that have the singular goal of achieving a billion dollar valuation will most likely fall far short. And this isn’t a bad thing. As long as the entrepreneur has a grounded outlook on life and business, the journey towards that goal will be what ultimately fulfills them. Whether they reach the destination or not is irrelevant.
So, my plea to entrepreneurs would be this. Don’t be discouraged by news of other’s success. Likewise, don’t delude yourself with visions of grandeur after learning of those same successes. Instead, set hard-to-reach goals, but realistic ones. Hope for the best but plan for the average. And if you find yourself the owner of a company that employs three people and does a little over $400,000 a year in revenue, recognize your success, build upon it, and understand you’re already a success story.
In closing, please do not read this as a “be average” or “be alright with mediocrity” plea. But rather, please take this as a request and encouragement to be reasonable and rational.