Lesson from Incubating Innovation #5: Make Your Own Luck
In the world of your start-up venture, your glass is neither half-full nor half-empty. It is completely, totally and utterly full. And founders know it is full of only two things: luck and risk.
The moment when you have an idea for a new product or service, your entrepreneurial glass is completely full of risk. Thousands and thousands of little risk bits fill it to the brim. There is technology risk. There is market risk. There is funding risk. There is almost nothing but risk, beginning with the moment you decide to launch a venture around your idea. Your job, as an entrepreneur, is to begin replacing the risk with luck.
If you get a small investment from a friend or family member, you replace a little bit of funding risk with a little bit of funding luck. With that capital, you buy yourself a little bit of extra time — and maybe during those extra couple weeks, your best prospect comes back from vacation and finally has time to meet with you.
So even though you appear to the outside world as “lucky,” the truth is that having the guts to ask that family member to believe in you created the circumstances that led to that client meeting.
Those eight extra hours you put in on a Sunday afternoon, sacrificing time with your family, might help you build out the extra feature for your mobile app. When the customer you’re seeing the next day just happens to ask about it, it will feel like luck. But you didn’t get lucky; you removed some risk with hard work and sacrifice.
You’ve probably heard this lesson before: “You make your own luck.” I believe that is true, but I’d go one step further. I’d argue that the definition of an entrepreneur should include some wording to the effect of, “An entrepreneur is one who is keenly able to identify, and systematically seek out for elimination, dangerous bits of risk in a venture.”
Despite the popular opinion that founders are risktakers, the truth is that good entrepreneurs are methodical risk-removers. Too often at Ben Franklin Technology Partners we see entrepreneurs who show up trying to convince us, and other investors, that the success of their venture is almost assured.
Competing products? No one has a product like ours!
Competitive response? Those big companies aren’t as nimble as we are!
Sales? All we need to do is capture 1 percent of the market!
Those of us who have been through scores of start-ups realize that you can’t ever know enough about your markets, competitors or partners. In order to know more about the risk in a venture glass, good founders follow a certain prescription:
- Good founders continually build their networks. I’m not talking about running up LinkedIn or Twitter followers. I’m talking about the hard work of forming relationships over years with people who have and share insights about your business.
- Good founders form an advisory board with a few trusted advisors who meet at least quarterly. This group serves as a pre-processor of information in real time. Having a dozen advisors who you occasionally call to bounce ideas off of is fine, but then you are the only one processing information. Put the advisors together and put your challenges to them so that they can feed off of each other and help you seek out risk to destroy.
- Good founders brainstorm ideas with people outside their industry. There is no question that having industry insiders around you is important to understanding market risk, but matters of personnel management, capital raising and vendor/supplier management cut across all industries.
We know that there are hundreds of unknown unknowns when launching a business. When we ask questions, it’s because we see them there — those tiny bits of risk in your entrepreneurial glass. They’re clear as day to us. We’re looking for founders who see them, too, because good founders are usually lucky founders. And lucky founders get that way by acknowledging and confronting weaknesses and working smartly to eliminate them.
About the Author: Wayne Barz
Barz has managed Ben Franklin TechVentures, a two-time winner of InBIA’s Incubator of the Year award, for more than 15 years.
Bethlehem, PA–based TechVentures is owned and operated by the Ben Franklin Technology Partners of Northeastern Pennsylvania. Barz previously managed the Bridgeworks Enterprise Center, an Allentown-based business incubator and member of the Ben Franklin Business Incubator Network. In the InBIA series, “Lessons from Incubating Innovation,” Barz shares the many lessons he has learned over his two decades in the industry.Manager of Entrepreneurial Services for the Ben Franklin Technology Partners of Northeastern Pennsylvania,