“You don’t go out of business because you run out of money. You go out of business because you lose hope,” I said.
Running Out of Cash
I was helping an entrepreneur prepare for a board meeting on a recent trip to California. The entrepreneur I’ll call Kris was walking me through her agenda for the meeting and presentation. The board meetings were becoming more and more urgent the closer we were to running out of cash.
“You are so thorough on your analysis of the market challenges there appears to be little hope. It sounds to me we are going to fail. I need to know, are you hopeful or hopeless?” I asked.
Kris looked stunned.
“I’ll tell you what would make me hopeful. If we were all committed to raising more funding. This would give us time to make even more progress and would assure our success,” she said.
“That is not going to happen,” I said. “Where you are and what you have is all you got. Are you hopeful given your circumstances?”
Promise of Promise
“No. I am not hopeful,” Kris said.
When she said this, a chill fell on the room. I felt it. More importantly, Kris felt it. I could see how this admission struck her.
Quickly she added, “That’s not true. I am hopeful.”
“Why are you hopeful? Give me hope,” I said.
“We have really talented people who are committed to success. Prospective customers tell us our product is superior in performance and cost to their current product. There’s an offer on the table to engage these customers, an impending market requirement which will challenge the state of the art. Plus we have a broad patent portfolio and supportive and informed investors,” she said.
Why Hope Wins
As Kris was sharing her hope, the mood in the room transformed. We were excited. We were committed. We were smiling. We were hopeful.
As we discussed the new agenda for the board meeting, she said, “I am hopeful. I am always hopeful. But being an entrepreneur is hard, lonely work. Sometimes I just need to vent.”
“I get that!” I said. “But realize this. Your employees, prospects, and investors are all looking to you to drive their hope. So you can set expectations low and be right but you ultimately fail. Or you can set expectations high and you ultimately fail. In one case you are right and in another you are wrong.
“In either case, however, you fail. Why not set expectations high and fill the room with hope? You just might be right in the end and you succeed. Which way do you want to lead?”
An Investor Perspective
“I want to be realistic,” Kris said.
“You want to be realistic? Then why did we start the company? Entrepreneuring on big ideas like yours, creating something of great value from nothing, undertaking the impossible has nothing to do with reality. It is all about hope!”
My hope as an investor is in two areas.
- The entrepreneur I partnered with in starting this company. She has a vision from God and is determined to make it a reality. She’ll never give up.
- It is always darkest before the dawn.
As an investor, I am a mirror. I reflect the hope of the entrepreneur.