Entrepreneurial optimism. Working on your seed fundraising pitch? Want to really get the investors’ attention? Start with a flashy video. Spend a great deal of airtime describing how you developed your invention, its “origin story.” Concentrate on the huge, overall market, not your target segment. Assume your pending patent(s) will be impregnable, once granted. Ignore the competition, skip lightly over your sales and marketing strategy, and don’t forget to show revenues of at least $500 million by year five.
Sound ridiculous? Not to a surprising number of young entrepreneurs.
Most young business hopefuls have been raised on a steady unicorn diet, garnished with heavy media helpings of Bezos, Musk, Zuckerberg, and Jobs. They have limited exposure to the realities of running a business, let alone fundraising. Entrepreneurial optimism abounds.
Are business schools failing to provide proper entrepreneurial guidance? Not really. Their failure, if any, is one of timing and selection. Should schools accept students whose experience is limited to a couple of years working at Mega Investment Bank, or Big Consulting Co? Will that experience, plus a few MBA entrepreneurship courses, prepare them for future startup success? Or would these schools be better served admitting more seasoned students, ones whose experience includes working for failed ventures? Interesting questions.
Since one doesn’t need an MBA to start a business, I suggest that the source of excessive entrepreneurial optimism lies elsewhere. A look at business/technology related press releases provides a clue. Optimism rules. Alzheimer’s disease has been cured, again. As has cancer. Limitless fusion energy is just around the corner. Pizzas will soon drop from drones directly onto patio tables. AI will solve most business problems. Southwest Airlines will upgrade its computer systems.
OK, that last item borders on the incredible.
But they all do. We live in a world of infinite media outlets and finite content. ChatGPT may balance that equation but, for now, retweeted/shared content focuses on keywords and short, clickable bits of information. Success, real or imagined, sells. Disclaimers, qualifying statements, and empirical evidence are fodder for seldom read, never shared, follow-up paragraphs.
So, what is my advice to overly optimistic entrepreneurs? “Good luck.”
No kidding. My WWLC colleagues and I have learned that sound advice, if given at the wrong moment, is seldom valued, let alone followed. One does not “cure” excessive entrepreneurial optimism; peddling caution to tunnel-visioned dreamers borders on folly. Our most successful clients come to us for help fixing a problem already experienced. Understanding why an investor pitch failed, for instance.
You could say that we restore optimism once reality has taken its toll. Want to learn more? Contact us.
Peter has spent the past twenty-plus years as an acting/consulting CFO for a number of small businesses in a wide range of industries. Peter’s prior experience is that of a serial entrepreneur, managing various start-up and turnaround projects. He is a co-founder of Keurig.