Death Spirals, Rock Climbing, and Startup Survival

Entrepreneurs face steep challenges every single day.

It is taking three times as long to ship your product than you had estimated. A key supplier (the one that was discounting their materials by 25%) just went out of business. The market is lukewarm to your first release. Each day, you worry there will not be enough time or money to hit escape velocity.

Enter the massive sell-off on Wall Street and the accompanying global, economic crisis.

What's a struggling entrepreneur to do?

Jason Calacanis, CEO of Mahalo.com, has a unique stance on how entrepreneurs should weather the storm. Jason broke his blog silence this week and posted a popular email he had previously sent out to his subscribers.

In a section comparing the dangers of a pilot trusting his instincts in poor weather conditions to an entrepreneur going with her gut right now, Jason asserts that "you must trust your metrics (revenue, burn rate, page views and earning[s]), not your senses. Your senses and emotions are FUBARed right now, but your metrics are not."

In other words, in the midst of the confusing and uncertain economic conditions we all face, Jason argues that entrepreneurs should fly by their numbers, not their instincts. To do otherwise would be a move toward entering the dreaded "death spiral."

In many ways, I think this is sage advice. It certainly sounds sensible and feels safe -- how can you argue that your metrics don't matter? His advice is also comforting and soothing to your edgy, raw nerves:  take a deep breath and focus on your numbers.

After I let his words settle in a bit, I could not help but feel there is more to the story. I know it makes sense to look at your instrument panel when flying in fog (how else do you know up from down?). Okay, check. Yes, I will watch my metrics and glean everything I can from the picture they paint.

But there is also a voice inside my head urging me to feel my way forward when facing a crisis. It nudges me to lean into the problem with my instincts, intuition, and confidence as my guide.

In Tribes: We Need You to Lead Us, Seth Godin introduces us to an amazing rock climber by the name of Chris Sharma. Chris renders previously "unclimbable" rock faces, well, climbable. Other rock climbers keep a hand and a foot on the rock at all times in order to make steady progress. This method works, but when a climber encounters a rock face where one cannot get a toe or finger hold, he is stuck. When Chris hit a seemingly dead end, he does a "dyno" and literally jumps up the rock (no hands, no feet on the rock). Chris' immense self confidence, faith, persistence (and fitness) get him to the top.

In leaving behind trusted rock climbing methods, Chris uses (he did not invent the dyno) a better way to scale "impossible" faces. Watch Chris climb in Squamish, B.C.

Chris chooses a maverick (are you sick of that word yet?) approach. And in doing so, he finds success.

I am not suggesting that entrepreneurs forge ahead -- in good times or bad -- with blind carelessness and a bloated swagger. When you enter extreme weather, you do need to rely upon your metrics to guide you out of the murky territory.

But there is also something to be said for occasionally "doing a dyno" to find your next finger hold on your climb upward.

Comments

[Dias]

Thanks for the information!!!!!!!!!!!