We have all heard the statistic that 90% of businesses fail within the first 5 years! What most people don’t know is why…………
This article digs into what fear is and how to recognise its signal which is excuses.
As a starting point we need to differentiate the different types of risk/ danger that make up fear. This falls into four quadrants:
1. Low risk – Low fear
2. High risk – Low fear
3. Low risk – High fear
4. High fear – High risk
For most of us the most dangerous decisions we will make in life will reside in the High Risk categories. These are decisions that we will make in life where we can either perceive the associated risk of the decision, or not which is more extreme.
There are two great examples of this in the real world. Most of the time they do not relate to business, unless you are operating illegally in which the risk is real.
The first example is Mountaineering. What you may know know is that this is the most dangerous sport in the World! In fact, more than 300 people have died attempting to reach the summit of Everest! The issue with this sport is that there is very real danger but it can come unexpectedly. This poses a huge risk and often catches people out, unprepared and unaware.
The second is big wave surfing. It is very clear there is real danger, so very few even attempt this sport.
Although I couldn’t find the actual clip there is a fantastic quote from the movies In Gods Hands – a story about a group of young surfers pushing big wave riding boundaries set against the ‘old school’ who paddle into these monsters. In a training clip here is how the risk was described:
“There are two types of surfers that we have to be concerned with in surfing waves that can kill you,” Brian says in the film as the other surfers huddle around and listen intently. “One is the gung-ho surfer. This guy does not consider the risks and the other guy is gun-shy.
One focuses on his abilities and the other focuses on his limitations“.
Unfortunately there was not clip of this, so I have added a quick clip of big wave surfing for you to enjoy and experience what real fear and risk look like.
Unlike big wave surfing, in the real world of small business, there are not risks that can simply ‘kill you’, however the fear may seem real.
Due to this fact, most SME owners are either:
– Gung-Ho, or overly ambitious too soon (over-estimation of abilities)
– Gun-Shy, not willing to take risks (too focused on limitations)
By being Gung-Ho, it is likely they will Fail Fast, or Succeed Fast.
Examples of business that fall into this category are business owners who:
– over-predict revenues
– take huge leverage in form of loans or capital raising, well beyond the actual scope of the business
– businesses who will lay out tens or hundreds of thousands of dollars in capex (capital expenditure) to renovate, have a big office, beautiful furniture etc. Or to hire external consultants well beyond the companies needs
Of courses, from time to time, big risk taking dreamers succeed. Probably the most notable and polarising in recent times is Elon Musk with Tesla. Elon continues to ‘break the rules’ and achieve standards that few believe are possible. This not only is true is his primary business of Tesla, but also true for the other businesses in SpaceX, HyperLoop and the Boring Company.
Being Gun-Shy, means they will waste an incredible amount of time building something that has little to no value.
To tell if someone is gun-shy, one tell-tale sign is that they will have a lot of excuses. It is simply a natural, to behave in this way. We all suffer from this issue when making a decision and taking subsequent action. Wether it is for our personal life, business, career or a myriad of other decisions we need to make on a day to day basis.