Chances are, you started your business because you have a passion and a vision for whatever it is you do.
That’s good, because you’ll need abundant reserves of both things if you are to succeed: A vision for where your business – and your industry – are headed, and passion to drive you through the lean times until you find sustained profitability.
However, beware the pitfall of passion. If you follow it blindly, your vision will suffer, causing you to start lying to yourself about your product or service, your industry and your market.
Many an entrepreneur have started with a good idea, but their loyalty and zeal for the original idea caused them to miss or misunderstand fundamental shifts in the market. There are many examples of this happening. Philip Geist wrote recently about the phenomenon and offered several examples, including Crumbs Bake Shop, which fell victim to its passion for delivering the ultimate cupcake. The chain expanded too quickly and collapsed, falling into the same pitfall as predecessors Krispy Kreme, Mrs. Fields Cookies and TCBY.
Avoiding the passion pitfall
Noam Wasserman, a Harvard Business School professor, wrote extensively about the problem of unbridled entrepreneurial passion in his book, The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup.
In a recent blog post on a Wall Street Journal site, Wasserman says passionate entrepreneurs are “so impatient to move forward with their brilliant new idea that they get too optimistic about how would-be customers and investors will see it.”
I urge you to read the whole blog post, because it’s filled with great information. For example, he offers a list of warning signs that passion could get in the way of your great, new business. Among them:
- Do you feel like you’re on a mission to change the world?
- Are you insulted when someone points out legitimate flaws in your idea or product?
- Do you find it hard to envision pitfalls or worst-case scenarios for your business?
- Are you hiring friends and family because you’re so confident of success that you don’t worry about potentially have to fire them for underperformance?
- Have you neglected to carefully test the market to confirm customer demand?
- Have you chosen business partners or company leadership with a similar background and views? If so, you’re probably missing valuable insights.
- Have you conducted an honest self-assessment to determine your own points of weakness? Do you lack skills in a certain area?
Tempering passion with realism
Asking such questions ensures that you temper your optimism about the future of the enterprise. Wasserman cites research from Keith M. Hmieleski and Robert A. Baron, who found that undue optimism – expecting “positive outcomes even when such expectations are not rationally justified” – is associated with a 20 percent decrease in revenue growth and a 25 percent decrease in employment growth over the subsequent two years.
Wasserman notes that optimism isn’t always a negative. As we said, passion is a prerequisite for starting a business. It’s just that you have to constantly check your enthusiasm by surrounding yourself with people who are open, critical thinkers and to sprinkle realism liberally on every move you make.