No one should ever fault an entrepreneur for his or her enthusiasm and drive, but the same qualities that can bring a company to life can also create irrational actions and skewed views of reality.
Two examples come to mind. Both involve bright, honest and dedicated people, and each could easily see the absurdity of the views held by the other principals. But neither could see their own faulty thinking.
The first involves a beautifully planned beta test for a chain of franchise shops. The entrepreneur thought she had a great concept, but recognized that in order to franchise her concept, she needed a proof of concept.
She raised a friends-and-family round of financing to open one store. It failed. Everything she thought would be embraced by the market received, at best, a lukewarm response. She attempted several fixes, but revenue never exceeded expenses. The idea was tested, and tested well, and shown to not be of economic value.
But the entrepreneur’s takeaway from the failure was to say she only needed to raise more money so that she could open outlets in better locations. She forgot how assiduously she had picked her proof of concept location, won’t accept the reality of the marketplace and continues her quixotic search for funding.
Another entrepreneur has attempted for the past four years to reach the market with a clever industrial device. She claims national distribution, yet her distributors have barely sold any product. She is convinced that the utility of the device is such a strong argument for its wide adaptation that sales and marketing efforts have been, at most, an afterthought.
After four years of almost zero sales, she believes the only thing lacking is additional capital to be used in some unspecified manner.
The common thread is that each entrepreneur believes what she wants to believe and refuses to face the realities of her situations.
Unfortunately, self-delusion is common among entrepreneurs. It is a healthy exercise to examine your own assumption, conclusions and dearly held beliefs to make certain you are not deluding yourself on any issues. Otherwise, you will hurt your opportunities to succeed.
Erwin Bruder ([email protected]) is president of The Gordian Organization. Reach him at (216) 292-2271.
