Page 125 - 6 Secrets to Startup Success

104 6 SECRETS TO STARTUP SUCCESS

coming wind. That flight was subject to the same set of physical laws
that have governed every flight through the ages, whether by birds,
planes, or winged mythological people.

In the same way, certain immutable laws of commerce will dictate
whether or not your new venture makes it off the ground. You must
convert your raw idea into something that will fly, a model that gen-
erates lift and minimizes drag, one that is fast and light enough to be-
come airborne before the runway ends. Liftoff will prove that your
model is sound, that it’s aerodynamically suited to prevailing market
conditions and financial realities, but it won’t guarantee that your craft
will stay aloft over time or arrive at a favorable destination. At times,
your startup experience will feel like flying through dense fog while
sitting in a cockpit full of mysterious buttons and levers.

The best way to cut through this early fog is to plan and manage
your startup with the right level of rigor and realism. This means
grasping the basic math underlying your business concept—how your
approach will lead to near-term profits and longer-term value cre-
ation. Doing so will not only bring your immediate priorities into clear
focus, but will help you accurately estimate how much starting capital
you will need to reach breakeven and beyond.

As we saw in Chapter Two, entrepreneurial optimism can lead to
rose-colored plans or no planning at all. Passion-trapped entrepre-
neurs tend to manage by assumption, believing that if they charge for-
ward with enough commitment and hard work, all will be well with
the numbers. Some are bored or intimidated by financial matters or
have grown tired of spreadsheets that mask important issues instead
of clarifying them. As a result, these founders lose touch with the
sharp clarity offered by the bottom line and develop a kind of dys-
functional detachment from the economic factors that will make or
break their business.

The solution is to balance your startup passion with dispassionate
methods of planning and analysis. Passion and logic are complemen-
tary forces, and the most effective entrepreneurs bring extremely high
levels of both. Returning to the metaphor of your new venture as an
aircraft, passion is the jet fuel that accelerates it forward. Logic and its
close cousins (i.e., good data, sound math, intellectual rigor, and critical

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