Entrepreneurship and the Power of Pessimism
My last blog post was a paean of the importance of optimism for entrepreneurs. Without optimism, entrepreneurship is intolerable.
Now, I’m going to flip that script and sing the praises of pessimism. An entrepreneur without optimism drags Marley’s chains around during exhausting days. But an entrepreneur without pessimism is a hot air balloon of belief. They may look solid, but is all air.
Pessimism is critical for entrepreneurs for the same reason optimism is: endurance. The prime directive for leading a startup is Don’t go out of business! Success comes to those who can keep going long enough for the world to come around to their view of the future. A startup must endure to win.
To endure, a startup must be prepared; prepared for success, yes, but even more prepared for bad times, indifference, mistakes, missteps, tragedy, farce, and near-death experiences.
Optimism bends to the light; only pessimism can prepare an entrepreneur and the company he/she runs to deal with the dark. Often, startups fail because of their inability to handle unexpected bad news. A clinical trial failure, high return rates, negative legal shifts, key team member defections, or any number of nasty tree roots can trip up a young company.
Pessimism is the mirror of the dark side. I encourage every portfolio CEO to “open to gates of Hell” at least once each year. This means to consider, naked and unadorned, all the worst things that could happen to the company. The darkest of dark scenarios. Then, the entrepreneur should consider: What would I do in this situation? Emergency fundraise? Seek grants? Massively shrink the company? Let everybody go and start over? In truth, we have seen each of those scenarios occur in our portfolios. Sometimes the worst happens, and the appropriately pessimistic CEO, having looked into the face of catastrophe, is prepared to deal with it, and can successfully move on.
So, entrepreneurs should be optimists in the morning, but pessimists in the evening. One helps them imagine where they are going and the other helps them prepare for the unexpected on the way there.
By Managing Partner Mike Edelhart
@MikeEdelhart
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Entrepreneurship and the Power of Optimism
The Summer of Our Disintegration: How To Keep Your Head While Everyone Else Is Losing Theirs
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