How to start a business during uncertain times - Part 2
Starting a business during uncertain times doesn't have to be as scary or stressful as it seems. Picking up where I left off in my last post, I continue to share some tips on how to set yourself up for the best chances possible, using a decision science approach.
Starting a business when times are uncertain can be scary. But here's a news flash: times are always uncertain to some degree, and starting a business is usually scary no matter what.
But it doesn't have to be that bad.
In my last post, I started sharing some tips on how to start a business by focusing on making solid decisions. First, downplay the small wins. Second, care about your wellness. To read more about these, go here.
In this post, I pick up where I left off, offering three more bits of advice that can help you make the best choices possible and set your business up for as much success as you can.
Let's start with a warning about too much self-love.
Third, don’t feel yourself too much.
Every business owner has an idea. Sell your hand-crafted pastries. Become a wedding photographer. Create an app that helps people predict the stock market. But too often we let the love of our idea get in the way of building a thriving business.
We humans tend to over-value what we create simply because we create it. Our dreams are great, but they’re not all made for business. And when we don’t have a lot of information, we rely on the information we happen to have. Sometimes, all we know is that we love what we’ve created – and then we predict that everyone else will love it too. So we risk failing... on a feeling.
It takes more than your excellent idea to succeed. Your business needs to solve a real problem, to offer people something they want but can’t find, whether it’s a product, a service, an experience, or even a brand personality.
Bottom line: Business experts would tell you to offer consumers something they need but that doesn’t yet exist. The decision science advice says to separate your emotions from your idea so you can analyze them properly. Your idea is your baby, but it’s also just an idea, and you’ll have a lot of them. Don’t fall too hard in love or you’ll lose sight of what works.
Fourth, don’t blindly follow norms.
More than once I’ve worked with business leaders who were facing a tough decision about the best way forward. They would ask, “What is our competitor doing?” Or “What’s my buddy’s company doing?”
These aren’t bad questions... unless they’re the only questions you ask.
There’s a tendency among organizations to mimic other organizations. Sociologists call this mimetic isomorphism. If another business is doing well, the assumption is that what they’re doing will work for you too. It’s the organizational version of the bandwagon effect, where people follow the majority because it’s the majority, and not because the majority is actually doing the right thing.
Organizations also mimic others because they want to appear legitimate. If the top tech companies in the world have ping pong tables in their common areas, then as a tech startup who wants to seem legit, you’d feel the need to get a ping pong table too. Even when a ping pong table may have no impact on the success of your business. It might improve morale or lure in the best talent, or it might be irrelevant in the big scheme of things. To know for sure, you have to think things through, not follow trends.
Bottom line: Business experts will tell you to “follow the leader”. The decision science advice is to take time and do the work: where do you need to go, what do you need to know to get there, and how are you going to go about it?
Fifth, don’t buy all the stories.
I was once part of a small team tasked to share insights and advice to small business owners. My job was to share research data. My colleague’s job (let’s call her Amy) was a successful small business owner tasked with to sharing her personal stories of trial, error, and success. The rest of the team thought Amy should take the lead on the presentation. Why? In their words, “You can show people data all day long, but what business owners really respond to is real stories. It’s more exciting to them.”
This isn’t untrue. Stories are interesting. And, I get it, data is boring.
But here’s the deal about stories: sometimes they represent reality and sometimes they’re just intriguing anecdotes. The more interesting, compelling, and memorable they are, the less the human brain cares that they’re true.
If you use one person’s stories to make a decision, you’re succumbing to probability neglect and falling for the law of small numbers. You’re assuming that one person’s experiences reflects the experiences of all people. You are very different from other people. So are your circumstances and your business. What’s true for someone else isn’t necessarily true for everyone, but good stories can make us forget that.
Also, because stories are more memorable than data, they’re easier to recall as evidence of how likely something is to happen in the future. The memory of an interesting story will likely carry more weight than evidence that's too boring to remember but equally if not more important.
Bottom line: Business experts preach the power of storytelling as a way to get your point across. The decision science advice is to start with statistical research and then use stories to illustrate facts, not replace them. If you don’t predict well, you won’t decide well.
You deserve the best shot possible.
Good decision-making is hard in good economies. It’s harder in times of more extreme economic uncertainty. So while uncertain economic conditions might be favorable to your budding business, they’re not necessarily favorable to your judgment.
The goal of great decision-making isn’t to avoid failure. It’s to set yourself up for the best chances at being successful. A lot of your success isn’t up to you. You can’t know everything, and you can’t control everything around you. But if you know how to handle uncertainty–and if you have the right decision-making tools–you’ll have a much better shot. And in the big scheme of things, a great shot is the best we’ve got.