Lately, people often ask me whether it makes any sense at all in these unpredictable and turbulent times to start up a new company or take over an existing one. Both founders and their successors weigh the opportunities and risks involved against each other. And given the many uncertainties, restrictions, and negative news surrounding COVID-19 and the so-called corona crisis, it is understandable that the many uncertainties and, therefore, risks outweigh any opportunities.
What’s behind that is the fear of failure. It’s also down to the apprehension about making the right decisions and possibly having to deal with feelings of guilt at a later date. Understandably so. Fear is an extremely important emotion because it points to potential risks that we are unable to fully foresee. It is telling us to be cautious. And that’s what we are meant to be in a situation like the one that we are facing right now. But being cautious does not mean that you should not act. Successful entrepreneurs distinguish themselves precisely by the fact that they are well aware of their fears, but do not allow these to hold them back.
Uncertainty is part and parcel of these times
Uncertainty is part and parcel of these times. How are we supposed to know what the right decisions are? For years, we have been talking about VUCA times and how to act accordingly. Some companies have already been living in a VUCA world for a long time because their markets and technological circumstances were basically like that – volatile, uncertain, complex and ambiguous. And suddenly we are all living in a VUCA world.
Within a few weeks, COVID-19 turned our world upside down, showed us how little we know, how complex our interdependencies are in terms of international trade in goods, and how difficult we find it to accept that there are no clear answers and solutions. We need to have a two-pronged vision before making important decisions during these times. So consider both sides. And then make decisions and conquer your uncertainty.
Face your fears
Why? There are many stories about successful entrepreneurs and their secrets to success. All successful entrepreneurs who I know have faced their fears and uncertainties in crucial situations. They have confronted and overcome their personal fears. And in order to address their uncertainties, they have sought advice and others’ opinions and then decided which direction they should go.
What is left are potential feelings of guilt. Usually, we feel guilty when we know that we consciously did something wrong, did not live up to expectations, and were caught out. We cannot always make all the right decisions in our lives. I don’t know anyone who has managed to do that. But we can deal with reasons why we as people make mistakes and make wrong decisions which may lead to failure. We can learn from the experiences of others and try to integrate them into our behavior and decisions
Never lie to yourself
Entrepreneurs fail because they lie to themselves. Because they refuse to admit any disagreeable facts, prefer to talk about them too politely or even just ignore them. This encompasses our blind spots and prejudices. We have them all. By not dealing with them, we cannot recognize our unconscious patterns of thinking and acting and therefore cannot take them into account in our decision-making processes. So we deceive ourselves – we lie to ourselves.
Another reason why entrepreneurs fail is overconfidence, the overconfidence of being able to do anything, of knowing no boundaries and the sense of having endless financial, transient, and dynamic resources. Self-confidence and the conviction of one’s own goals and projects are both important and a prerequisite for commercial success. It is just as important to have insight into your own resources and their limitations. Because everything goes well when forced – but a lot of things break down then too.
I have already written about uncertainty. Yet uncertainty is also one of the main reasons why entrepreneurs go bankrupt. Uncertainty, that sense of stepping on the gas while simultaneously stomping on the brakes, walking around in circles, losing your bearings, and getting nowhere. And using up a lot of energy in that process. Uncertainty can only be surmounted with a firm decision. Being successful as an entrepreneur also requires courageous and daring decisions.
Opportunities in every crisis
Crises are opportunities. And opportunities tend to turn into crises if they are not exploited. The Greek word crisis not only means opportunity and crisis, but also decision. A crisis only becomes an opportunity if we are prepared to make decisions. All ancient doctrines of wisdom have in common that they depict the world as a polarity. This means that there are opportunities in every crisis and that there are risks in every opportunity.
My answer to the question of the founders and successors as to whether they should take an entrepreneurial risk during this period is always: If you are convinced of your idea, then do it. Take advantage of the opportunities arising from this corona crisis and contribute to the fact that afterward, we will have a better world than we had before. And be aware of the risks, especially those personal risks: self-deception, overconfidence, and uncertainty. The biggest risk inherent in an entrepreneur’s venture is the entrepreneur themselves.