Most businesses fail because they run out of money. And most business owners blame their failure on the length of the sales cycle, the markets, a recession, the VCs, the employees who don’t have a work ethic, the tax structure — there are a litany of outside forces. Many startups may be about to fail in Silicon Valley because they will “run out of runway” when their seed round is exhausted and they can’t raise the next round. This always happens.
How do you avoid that beimg you? First. Recognize none of the above causes are the root cause of business failure. If they were, every business would fail during a recession, nobody selling to the enterprise would succeed, no startups would survive without funding– you know where I am going with this. Right now, in a terrible economy, I still can’t get a seat at the Hillstone near me, Target sold out its Missoni collection in an hour, Groupon’s IPO was oversubscribed. Outside conditions do not hit everyone equally. But why not?
The root cause of any business failure is the neglect of a simple, ancient Buddhist idea: the line where I end and you begin is blurry. As the Beatles used to sing, “I am you and you are me together.”
As the founder of a business, the line between you and your customers, you and your funders, you and your employees, might as well not exist. You are all in this together.
This is easy to see if you watch world leaders freaking out over the possibility that Italy will default. Or the possibility that the US auto industry will vanish, or the banking system will collapse.
For the last few years, we’ve had endless debates about whether we should have let the banks fail, GM fail, Greece fail. But every time one of those big industries or countries gets to the precipice, smart people bail them out.
Why? Because “I am you and you are me” and if Italy defaults it throws the entire world into a recession. The evil bankers and multi-national corporations know this, perhaps best of all, because they are connected to everything in the world.It’s ironic, but the CEOs considered most selfish are (in some ways) actually closer to living the Buddhist principle of interconnectedness than most entrepreneurs.
The same is true of your business. To make it do better, blur the lines between you and your market. Would YOU pay what you are asking your customers to pay? Would you use a tool that only solved a part of your problem.? (Google needs to do this right now for Google +, because the customers are sending a message: we want a simpler, more shareable experience. )
And do it between you and your employees. Do you want to do repetitive tasks all day? Do YOU want to be the one who cleans the bathroom and kitchen? If you don’t, don’t ask anyone else to do it. Perhaps you could outsource the task to someone who went into business to do the very thing your employees find mind-numbing..
All of this is hard to do, unless you start at the very micro-level: put yourself in the body of the person who works for you, the person you are trying to sell to, the person you want to fund your company. What does that person want? Whatever it is, if hou can, give it to them.
If you do this, even in the worst of circumstances, you will not run out of money.
