The Most Common Way Entrepreneurs Kill Their Business
The ruler of the world is always a master at one thing: ruling the world. Businesses are the same way: they exist to satisfy _ specific _ needs of their customers. While some businesses eventually grow to a point where they can expand the services and/or products they provide, there’s a whole other group of businesses that make one single fatal error: they expand too early. They’ll move on to fulfilling their market’s other needs before they’ve developed a sustainable way to satisfy the first need they were going after.
I have a couple friends who run businesses and it’s pretty much the same trend over and over when I talk to them: they discover another need in the same market that needs to be fulfilled and they try to go after it. All the while they neglect to truly execute on the opportunity they were first working on (trust me I know because I’ve made the mistake).
Traders (and more specifically: arbitrageurs) are one group of people who know better than this. When there’s a price discrepancy in the marketplace, they focus all their efforts on taking advantage of the gap. Talk to any trader who comes up with a good trade (stock trader, advertising arbitrager, the list goes on..), they will keep milking that trade until it stops printing money for them. They won’t move on to the next trade until the first one is complete (unless of course they have additional capital to do so).
Many entrepreneurs suffer from ADHD-like symptoms and pull their business in different directions before they’ve fully exploited the original opportunity that they were focused on. I’ve written about it again and again, but it deserves additional attention because I still see this problem so often.
We all have our reasons for following the shiny object (new business ideas). Yes, there are a few excuses that are actually valid:
- You’re passionate about something else - There’s more to life than money. Spending your entire life doing something because it makes lots of money is not a great way to become happy. That doesn’t mean you shouldn’t consider the economic impact of all your decisions. If starting a business helped you discover your true passion though, awesome! Don’t spend your life pursuing something that you don’t love.
- There’s no demand - If the demand dried up or doesn’t exist, it’s time to pivot.
- You have a self-sustainable business - If you have a business that is supporting itself (and possibly even growing), there’s nothing wrong with expanding your operations beyond the initial product or service you were offering.
- Massive explosions - These are things that force you to question your purpose in life. A founder quits, you go broke after taking out three mortgages on your house (time to get a job), and other major events of this nature. Sometimes you are forced to step away. Often times that break will be exactly what you needed to regain your footing and go back at it.
Now let me list the reasons that are most common (and not great excuses):
- They’re shiny - We all love shiny things! We also often have this false perception that there’s a business model out there that we can put in little effort and generate huge returns from. Here’s the reality: all businesses take an immense amount of work to support. That other business you see is going to take just as much work (or more) than the one you are working on.
- Entrepreneur gets tired - Oh are you really tired of working day in and day out for something that isn’t paying you really well? Go cry on someone else’s shoulder because you have got to hustle to make businesses work. Less vacation, more work, more hustle, more focus … that’s the only way.
- Family or lover to support - This is actually a great source of motivation: if you don’t hustle people who are relying on you will suffer. You are going to have an incredible amount of stress from this though. My suggestion: go to the gym and work it off.
- There are serious hurdles - At this point I feel like I’m beating a dead horse: either you are an entrepreneur or you aren’t. If you are going to complain about the challenges of staying focused, you shouldn’t have signed up for entrepreneurship in the first place. If you have a business that is performing and growing, you have a duty to that business: continue to water it and help it grow. Don’t go watering another one when the first business is still thirsty (pardon the metaphor)! Seriously, don’t do it. I’m tired of hearing about entrepreneurs that make this fatal mistake. Get someone in place who will stop you from doing this: a girlfriend or boyfriend, a parent, a friend, whoever. Otherwise you are at risk of killing your business.