If you want to launch a successful startup or raise business funding, it’s critical that you spend time anticipating failure. This may seem counter intuitive and contrary to the optimistic mindset that is equally essential for entrepreneurial success. However, it is only when you identify the many reasons why your startup or investor pitch may fail, that you can work on making the necessary changes to avoid disaster.
Identifying reasons for potential failure and then taking remedial action, is one of the key ways to reduce risk. This is why, when faced with a pitch, savvy investors will focus on why the company is likely to fail. Equally, good attorneys always prepare for the arguments their opponents will make against them or the reasons a judge or jury will disagree with their case.
When working on your pitch, business model or launch plan, the following three-stage process that we use with our clients, is a useful preparation tool.
Stage 1 – Have one or more sessions that are solely dedicated to identifying as many reasons as you can as to why you will fail. Try not to do this alone as the human mind has a remarkable ability to shield us from unpleasant thoughts. Work with your team, and if you know a friendly ‘critic’, bring them into the process.
Stage 2 – Work on how you will ensure that the reasons / factors you identified in Stage 1, do not result in failure. This may mean completely reworking your business model or pitch, or in some cases, going back to the drawing board and starting again.
Stage 3 – Look for reasons why the solutions you identified in stage 2 will not work.
Time spent imagining failure early on will help you avoid real life failure and wasted time and effort.
Image credit: CC by Philipp Baer