2 Reasons Entrepreneurs Fail

I've been an entrepreneur for almost 15 years, gosh it's really hard to say that out loud, and for the first part of being an entrepreneur I managed and ran and scaled a rapid growth e-commerce company and then for the second part of it I've worked in venture capital and I've coached hundreds of CEOs and Founders. Through all of that I've been exposed to a lot of really successful companies, but a lot more companies that failed. And so for me it's been interesting to study why is it that these companies fail. I've been able to narrow it down to what I believe to be two main reasons and I'm going to share those with you today. When I work with CEOs I peek behind the curtains and I get to see all areas of their business from topline revenue all the way down to their personal management. It often leads me to ask one of two questions. The first is "what's stopping you from going faster?" Or the second is on the other side "why do you feel like you need to go so fast?" Yes my job can be a bit confusing at times. But these two questions are framed out of necessities which if you fail to do as a CEO or as a founder of a company I can guarantee you, you won't be successful. And that's what I've seen with the companies that I've witnessed fail and it's all based around one of my favorite quotes, "let chaos reign, then rein chaos in". And I love this quote because it represents the razor's edge that entrepreneurs are forced to walk between chaos and order. The inability to balance that and walk on that razor's edge is what leads to entrepreneurs failing. So let's dissect it together. The first is "let chaos rain" and I'm going to tell you this and if there's nothing you take away from this video take away this: Safe founders don't win. What you need to be able to do is to pitch an investor today, then go instill confidence in a team that you're for sure going to make payroll tomorrow, and then sell a customer with conviction on how you're going to change their life over the next year. The chaos of it all is inescapable and deeper than that it's necessary. A safe CEO inspires no one, wins nothing and gets nowhere. This chaos is genuinely vital to discovery, to disruption, to courage and most importantly to customer acquisition. And it's this energy of chaos that causes employees of stable companies who would never take a leap, to say no to health benefits and those cozy 401K contributions and grab a wing and hang onto the plane that you're building and trying to fly. Now if you're somebody who's watching this going "KC I'm not a chaos creator that's not something that I do", well I'm going to give you three ways that you can get better at it, which feels like weird advice to give but we're going to go ahead with it. The first is understand the mission of what you're doing and why are you doing what you're doing. Now you hear a lot of people talk about oh "what's your mission? what's your why?" Genuinely sit and think, why of all the things in the world that I could choose to do, am I choosing to do this? Entrepreneurship is almost like this this illness that you have where you can't stop thinking about this one thing. So then once you've identified what that is, why would you let anyone in the world stand in the way of you doing it. The second way to get better at creating chaos is to think bigger. So right now I want you to think about your company 2 years from now and what you'd like to achieve. Okay great, think about that. Now I want you to 10x that. That's how big you need to think. I heard a quote from a founder that was "why do things that are hard when you can do things that are impossible?" And it's founders and CEOs who can think that big and are willing to place bets that are that big that create the chaos that's needed to grow fast. And finally the Third Way is I want you to ignore the rules, all of the shoulds that you're looking for, I should do this, I should be doing that, I should try this, are going to lead you closer to mediocrity. You need to look at your industry, ignore all the rules that everybody is playing by and then run hard. If Uber would have cared about the rules and the shoulds of the taxi industry they never would have been successful. One example of an entrepreneur that is incredible atcreating chaos is Adam Newman the founder of Wei work. But you can also see that there's a downside to that chaos and that's the second part of why entrepreneurs fail. You don't have the ability to rein the chaos in. When it's just you your chaos doesn't hurt anyone but you. But what happens when you start hiring people? We've all worked for the boss, and we all know right now somebody probably jumped into your head of a boss that creates chaos, and we've suffered under the wrath of that constant uncertainty. They're the one that you need to chase down for approval on apiece of creative that they're probably micromanaging, but they don't have 10minutes to give you focused attention in order to make the decision. We call them bottlenecks. Now this chaos albeit necessary, possesses the power to destroy a company, which is why you need to be able to rein it in. The exact behavior that got your company to live could actually be the reason that your company dies. Once you begin hiring people, working with other partners, increasing distribution channels and scaling your business, your chaos begins to create collateral damage. So all of those people that are relying on you for guidance and process creation, they're now getting swept up in your tornado and everybody's swirling around and they're set up to fail, but you're pointing your finger at their inability to get things done, but it's really their inability to make sense of your vague expectations. So here's four ways that you can rein it in to manage chaos. The first is get as far ahead with planning as possible. I urge you okay, chaos is much less disruptive when applied to product market releases or marketing campaigns when you're 6 months ahead. It's a really nice feeling. It gives your team room to breathe and then it doesn't slow you down as the leader in your day-to-day when they need approval and you're trying to create the chaos that your business needs to grow. The next is stop giving them vague feedback that confuses them more. You've probably said "it needs to be better" or "it's just not good enough" or "it's not where it needs to be" or maybe my personal favorite which is "I just don't love it". These are pieces of feedback that I've heard many CEOs give, maybe I'm one of them. and they are chaos contributors. So what they're going to do is they're going to confuse and frustrate people who genuinely want to do a good job for you. And now instead of them executing and getting stuff done they're trying to track you down and find 10 minutes from you to understand what it was that you meant. Give direct clear feedback in short bursts of focused attention so they can get to implementing the changes that you want and they don't need to follow up with you, they know what it means to be successful and then you can go return to your chaos. The next is stop trying to do everything. Doing more is not synonymous with being a visionary, it's actually more of a distraction. So based on your simple vision and the plan that you've created with your team, agree with them on the desired outcomes and then channel your chaos towards specific outcomes. My co-founder who was more the chaos in our partnership, used to ask me to help him channel his chaos by clearly pointing him in a direction and letting him go use his chaos for good. That's a way that you can try and manage it with your team. But it doesn't help when the chaos is aimless or you as the CEO are not willing to have the chaos be tamed. The next is you have to find a team that you trust. You'll never harness the chaos if you don't trust the team that's asking you to slow down. Trust is the critical foundation of every good relationship. So what you can do is hire people who you want to change for and adhere to processes for because you genuinely trust that they want what's best for your company and that they may know better than you in some areas. Now the balance between creating the chaos and managing the chaos reining it in, it's an art form it's not really a science and it takes a lot of time to develop. After watching today's video what I want you to do is ask yourself, am I more the chaos creator and I need to figure out how to rein myself in, or am I playing it way too safe and I actually need a little bit more chaos in my life? Then once you answer that get with your team if you have a team and have them give you feedback around ways that you can try and improve in those areas and then think to yourself, how can I try and create a little bit more balance here so I don't end up like one of those companies that KC has seen fail. Thanks a lot for watching if you like this video please subscribe to the channel and I have a few more recommendations of other videos that you can watch.