Open Ambition

Big and unexpected changes are frequently less “unexpected” than we would like to admit sometimes, whether they occur in our personal lives or in our professional lives.  Sure, there are true shocks whose probability of occurring are so slim that they’re hard to anticipate, but much more often, the times when you have to confront an unpleasant change is something you knew was coming.

Henry Blodgett wrote a sober and ego-free article about why market bubbles happen, and will continue to happen.  A key point he makes is that bubbles happen naturally, for factors that in the long run will never be fully predicted or avoided, even though they may be anticipated.   He quotes investor Jeremy Grantham who sums it up well.  “We will learn an enormous amount in a very short time, quite a bit in the medium term, and absolutely nothing in the long term.”  The anticipation referred to here is anticipation of a bubble bursting, and the fear of the loss that will result. 

I love Henry Blodgett 2.0 (his role Merrill Lynch analyst was version 1.0).  He’s honest and humble, in a “serious scar tissue” kind of way.  I found his article refreshing because he was so direct about knowing the housing bubble was there, but that awareness provoked only a messy and clumsy understanding about what he should personally do about it that was best made sense of only with hindsight.  But by anticipating it he was able to see beyond the here and now, to the more pleasant and hopeful medium term, regardless of his near term decision making or consequences.

Early in 2008 we were advising our companies to expect a very hostile fundraising and operating environment in the second half of the year.  All we knew was something bad was coming, didn’t know the magnitude of the shock or the timing, just that it was coming.  What did we do differently?  Well, a lot, and nothing. 

Our companies applied a lot of scrutiny on expenses and revenue, for sure.  But they also continued to sell aggressively and keep product development schedules tight. 

So when October happened?  That was beyond bleak, but the companies in our portfolio methodically revised 2009 plans, optimized around a different set of variables (cash conservation, getting to profitability), and they addressed the very unpleasant tasks of expense and headcount reductions.  The entrepreneurs I was meeting with who were incubating new companies or raising money? They had a tough time of it, but by November, they were back, also with revised plans, showing how they could envision success even with so much less of everything to count on in their plans and assumptions.

Anticipation of an unpleasant outcome didn’t inhibit the responses of those of us in the startup community, anticipation enhanced the response.  It helped sharpen the focus more firmly on the fear of not succeeding, and fostered the resiliency we all need so very badly now, and enabled us to see beyond the near term. 

Over the holidays I confronted an earth-shattering shift in my personal life, and an unpleasant one I’d anticipated for many months.  What did I do?  Well, I focused myself on how to work through this, and to understand that the medium and long term are where to apply my focus.  Did the anticipation affect me or my response?  I think it did, I think it helped me move more quickly to focus on where success could be found beyond the near term. 

I find life in the world of startups fascinating and inspiring, where productively making use of anticipating an unpleasant outcome, having it serve as a means to provoke adaptability, provide a “stretchiness” to your thinking and ability to respond all comes so naturally.  We’re in a world where resiliency will matter a lot, and where for the foreseeable future there will be much to anticipate, a lot of it unpleasant.  But in the medium term there is much inspiration and excitement to be found, and resilience will help speed us from here to there.

[the holidays and ensuring rapid start to the year took me off line, blog-wise, so I am glad to get this first post off for the year, and look forward to resuming the active pace of November and December.  Thanks to all of you for your patience!].

Tags: adaptability, fear of not succeeding, market bubble, resiliency

This entry was posted on February 3, 2009 at 2:32 pm and is filed under Business planning, Failure, fear of not succeeding, Intellectual curiosity, meaningful failure, Success. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.