Chaos Is Your Friend
CHAMPAGNE FOR YOUR ENEMIES
The first thing to know about chaos is that it happens to everybody. Turbulence is the official climate of entrepreneurship. Sometimes the source of unrest is external: a natural disaster, a revolution, a war, or, as happened to me, a high-risk pregnancy. Whatever the situation, the key is not to flee from the situation but to run into it.
In case after case, entrepreneurs who succeed in times of turmoil manage to contain their fear or anxiety. They don’t succumb to the agitation around them; they stay calm, recognize the opportunities that the disruption around them creates, then seek to exploit them. They respond to chaos not with panic but with strategic precision. If anything, they use the disruption to outflank their competitors.
So next time adversity approaches or you face down a foe, don’t rush for shelter. Instead, channel the Widow, pop some bubbly, and clink with the enemy.
HUG THE BEAR
Bubbles don’t only burst in war, of course. Sometimes the chaos that hits an entrepreneur is economic: recession, downturn, credit crunch, market collapse. Through no fault of your own, suddenly expenses mount, business dries up, donations wither. Then what?
Whet your appetite. Warren Buffett says his approach to investing is: “Be fearful when others are greedy and be greedy when others are fearful.” Entrepreneurs can learn a lot from that attitude. When markets collapse, the temptation is to retrench, harbor assets, wait out the storm. To be sure, sometimes you do need to step back and conserve resources to prepare for growth later, but whenever possible, resist that temptation.
Downturns are often the best time to strike big. The history of entrepreneurship shows that moments of distress—the ones that are most miserable for entrenched players—are precisely the ones that are most favorable for outsiders
ADMIT YOU SCREWED UP
Sometimes the chaos you face as an entrepreneur is not outside your control. It’s a crisis of your own doing: You picked the wrong strategy; you made the wrong bet; you executed poorly; you lost your way. In short, you screwed up. Your instinct may be to pretend it didn’t happen and hope the problem goes away. You’re not alone. Lots of entrepreneurs have chosen this path, but it’s the wrong one. The truth is, there’s only one way out.
Own it. Apologies need to be real and meaningful to make a difference. Dov Seidman, the founder of LRN, a firm that advises companies on their cultures, dismissed most CEO mea culpas as “apology theater.” In 2014 Seidman, along with the New York Times journalist Andrew Ross Sorkin, established an “apology watch” to call out fakers. The one CEO Seidman cited whose genuine apology and subsequent actions succeeded: Netflix’s Reed Hastings.
Entrepreneurs face enough setbacks that you can’t control. If you’re the source of your problems, be honest, be forthright, be contrite. Then get back to work.
ONCE UPON A TIME
The easiest thing to do when your company hits rocky waters is to abandon your core principles and do anything to survive. That’s understandable. It’s also misguided.
One consistent theme of entrepreneurs who deftly navigate chaos is they don’t just look forward; they also look back. They don’t just seize opportunities, own their mistakes, and move on. In the midst of whatever mess they’re in, they also return to their core values. They reconnect with their origin stories. As the great business historian Alfred Chandler, Jr., liked to put it, “How can you know where you’re going if you don’t know where you’ve been?”
Score another for one of the key lessons for entrepreneurs in chaos: If you’re feeling lost in the woods, go back to “once upon a time.”
Your Entrepreneur Personality
Steve Jobs. Mark Zuckerberg. Sergey Brin and Larry Page. Ted Turner. George Lucas. Elon Musk. Diamond entrepreneurs are brilliant dreamers who start bold, disruptive organizations. They are charismatic evangelists who capture the imagination of everyone they meet as they talk about revolutionizing people’s lives. Diamonds envision a more exciting world, then inspire others to help them achieve it. But diamonds often lack a clear road map for growth; they tend to have highly unstable and unpredictable futures. When diamonds succeed, they can be game changers. But when they fail, it’s often quick and messy.
Oprah Winfrey. Martha Stewart. Richard Branson. Estée Lauder. Giorgio Armani. Jay-Z. Star entrepreneurs are dynamic trendsetters with big personalities who inspire deep loyalty among diverse audiences. Stars instinctively know what’s coming in the culture; they’re two steps ahead of everyone else. Stars become a source of pride for their communities, their cultures, and their countries. When they become big, they can go global. But they’re often one-person shows, change their minds frequently, and can be undisciplined with time and money.
Howard Schultz. Ray Kroc. Ingvar Kamprad, the founder of Ikea. Anita Roddick, the founder of The Body Shop. Blake Mycoskie, the founder of Toms Shoes. Transformer entrepreneurs are catalysts for change. They typically operate in old-line industries yet aspire to transform their firms or causes through innovation and modernization. Ray Kroc brought franchising to the ho-hum hamburger drive-through; Ingvar Kamprad replaced the staid furniture showrooms with sleek Swedish designs in trendy warehouse settings. Change can be good, but can it be enough to restore growth to a sector that’s lost its luster?
Jeff Bezos. Bill Gates. Fred Smith. Michael Dell. Mike Bloomberg. Rocketship entrepreneurs are penetrating thinkers who apply a laser focus on metrics to accelerate growth and change. They are tinkerers and fixers, with a relentless drive toward efficiency, who aim to improve every element of their endeavors, making them cheaper, faster, better. Rocketships often have a background in mathematics, science, systems, or management and use their analytical minds to set clear goals and formulas for success. They are the rocket scientists of the entrepreneurial world. In an increasingly data-driven universe, they are uniquely poised to soar. But their obsession with numbers comes with clear risks.
YOUR ENTREPRENEURSHIP PERSONALITY
The idea of identifying different personality types goes back to antiquity. The ancient Greeks analyzed body fluids (blood, bile, and phlegm) and linked them to moods. Two hundred years ago scientists measured bumps on people’s heads to ascertain certain personality characteristics. The idea of actually asking people about themselves didn’t take hold until a century ago, first in the military. Personality tests have been a fact of life ever since—and a pretty good business, too, half a billion dollars a year in the United States alone.
It’s time we bring that rigor to the fastest growing groups of workers today, entrepreneurs. The main lesson of these four profile types is this: Just as there is no singular path to being an entrepreneur today, so there is also no set entrepreneur personality. There are multiple paths and multiple personalities. Each has its strengths and weaknesses.
So instead of peering outward, picking a hero to emulate, then struggling to model yourself on that ideal, look inward. Figure out what you’re good at—and what you’re not—then play up your strengths. The first step to going big is to know thyself.