If you were to ask any entrepreneur, about key moments during his initial phase of setting up the business, he would always recall that one crisis situation which threatened the very existence of his entity. In fact, for most entrepreneurs, there would be more than one such instance – it could be relating to the lack of capital, project issue, friction among team members and/or co-founders, changes in external policy, competition, internal fights etc. But they would also proudly recall how they could successfully overcome the crisis and reach where they are today.
On the other hand, I have also met many entrepreneurs, who winded up their startups and went back to corporate life. When asked, what went wrong, it was mostly about one of these- less capital, losses in a project, Issues among the team members/ co-founders, changes in external policy, and internal fights, competition etc.
“I had the idea and business plan but did not have enough money to execute the same”
Do you find something strange here?
In both cases, entrepreneurs’ encountered similar crisis, however one group called it quits and the other, weathered the storm, and went on to create a successful business.
So I began thinking, what information, or knowledge, the second group of entrepreneurs, could have known, which could have warned them against taking the drastic action, and eventually find success. A little bit of patience during that stage could have done wonders for their careers.
And that’s when the thought of beginners’ luck crossed my mind.
We have all know about Beginners’ Luck. Wikipedia describes it
…The supposed phenomenon of novices experiencing disproportionate frequency of success or succeeding against an expert in a given activity.
I’m sure all of us have experienced beginners’ luck at some point of time in our lives.
I too experienced it during my earlier days of investing; my first investmentwas through TCS IPO and 2 other companies. And they all gave me fantastic return over the next three months. I had done absolutely no research for the same. Post this initial success, I was hooked on to the stock market, for the rest of my life. I did make losses later on, but till then I had a good idea of how the system works and the long term sustainability of the market.
The beginners’ luck is important as it gives you the confidence to take that next bold step. I have come across many friends, who after experiencing initial losses, never again dared to dabble in stocks again.
In entrepreneurship, beginners’ luck is also extremely important
You start a business; you need revenues to keep the business running. And sometimes through luck you get few good customer through reference of a friend or colleague and that gives your business the initial flip. You get motivated, work hard, do good work and through word of mouth you gain more business and your company grows bigger. Luck can also be in form of business conditions, timing of your launch in the market etc.
But as any entrepreneur would tell you these things don’t really happen. The reverse always is true.
Most of the time ( I say almost every time), it doesn’t happen as you expect.
Some instances of what really happens
You start your business; you had banked on some people to start giving you initial projects. However things don’t go as planned and you are stuck…
You had initial capital but it starts getting depleted rapidly and revenues don’t support. You didn’t expect to burn so much cash and so fast…
Just as you start your business based on a novel concept which you think no one has worked on, an established player offers similar product/service at lower cost.
You get a big project and something bad happens! You are heartbroken
The last one really played havoc with my life.
Our Fifth order came from one of the largest companies in India, we were so excited, and we invested 40% of our initial capital in that order. After a few days, that company gave us some stupid reasons and cancelled the order. You could imagine what it did to us. We had not even begun and we were down in dumps. But we survived.
As you can see there is no beginners luck being played out here.
In fact, for any startup entrepreneur it’s the reverse which happens most of the time . You face a disproportionately large share of problems and troubles at the outset.
And I would like to call it The Beginners’ Misfortune. The exact opposite of beginners’ luck.
Beginners’ Misfortune is experiencing disproportionate share of troubles at the start of the entrepreneurial journey which is specifically designed to test his resilience .
Those who call it quits lose out a great opportunity but those who can handle the initial misfortune come out stronger and eventually find success. The Begginers’ Misfortune is part and parcel of every entrepreneurship journey
How does knowledge about The Beginners’ Misfortune help start-up entrepreneurs?
One of the reasons the second set of entrepreneurs’ ( described in the opening passage) quit could be because they had different expectations, when they started their venture. They would not have expected to face so many issues, right at the outset, which may have demoralized them, and resulted in a drastic action.
Had they known about ‘The Beginners’ Misfortune’, they would have realized that it is an essential part of their journey and they need to go through this. It would have made that that much more resilient and pushed them to continue to work towards their idea and maybe it would have all worked out at the end.
As for me whenever I come across crisis in business, I simply remember that it’s ok, and “The Beginners’ Misfortune’ phase is in action. It only makes me more excited and ready to face the challenge, knowing there is great learning to be experienced.