Reading time – 5 minutes
TDLR – Gently guide fortune and help determine the future by thinking far ahead. By planning to the end you will not be overwhelmed by circumstances and you will know when to stop. – Robert Greene
I used to be terrible with women as a teenager, so much so that my cousin used to have me write out a tree diagram of all the rebuttals and how to work around them as to help me get over my fear of rejection.
Starting a company is so demanding that you have to do something similar, not necessarily because you’re scared to fail but so much is at stake that contingency plans have to be set. Sort of like what Robert Greene describes in law 29 – plan all the way to the end:
Gently guide fortune and help determine the future by thinking far ahead. (…) Taking into account all the possible consequences, obstacles, and twists of fortune that might reverse your hard work and give the glory to others. By planning to the end you will not be overwhelmed by circumstances and you will know when to stop.
It’s a given that if all came crashing down in your life, you should be ready to sell your assets, file for bankruptcy or work two jobs for a while before you get back on top of things. However I want to take it further than that. Let’s define contingency plans by outcome for one start-up.
And let’s say that as long as I become better off launching a start-up, it’s a success to me. Similarly it’s a failure, if I become worse off.
Therefore while I am running my company, I should be getting wiser or richer, ideally both. Because sometimes even though the start-up fails I stumble on another idea. For example if I catch myself saying ‘hey I am busy running this company, I wish someone went grocery shopping for me’. You best believe that if this one fails, I am starting a grocery delivery service next.
If I come at a point where the company might be acquired by a bigger one, I should know which type of company I am willing to be acquired by, and whether or not I plan on working there post-acquisition, or if I will sell my shares and move on to the next phase of my life.
Likewise, there might come a time t when the company has to file for bankruptcy. And as long as I am “richer” at t than before I started the company then I should be fine with that. But what you will often find is that people get so emotionally invested in their companies that their deaths throw them in a slump or hurry them into a depression. When truly we’re here to make money and have an impact, as long as that happens it’s a win.
However they are also positive outcomes to account for. If your company blows up to be Apple or Facebook, one should be ready to go from 12h workdays 7 days a week to 16h because that’s what the game dictates. Otherwise sell, I read that’s a good problem to have.
Ultimately, I can only think of two cases when I could be worse off by starting a company.
- I picked the wrong legal structure, and now they are coming for my personal assets – which is why it’s so important to have a lawyer translate what you’re liable for when launching your start-up,
- I failed and I am too discouraged to try again. I have never gotten to that point but it’s something I notice entrepreneurs in their 30s deal with. It’s like to them, life ends at 30. By then society says they should have a wife, kids, a house, a car etc. When they don’t, the start-up’s failure become theirs.
Do you have a start-up/a start-up idea? What are your exit strategies in case of success? In case of failure?