How can I tell if I am failing at my entrepreneurial venture or start-up?

There’s an old joke about how to make a small fortune in angel investing: start with a large fortune and invest it in angel rounds.

I guess you could say the same thing about how to fail at an entrepreneurial venture: start a new company and then do everything that could be reasonably expected of you.  And that’s how you fail.

The world is not set up to make your venture successful, and in fact almost everything conspires against you and your new company.

Because there is no natural constituency for the entrepreneurial venture, there is no way, reasonably, you can expect yours to survive. Customers aren’t clamoring for new vendors, employees aren’t looking to make half as much for their hard-earned skills at a firm that has a 50% chance of dying every day, and investors aren’t interested in taking risks or putting money into pipe dreams.

The conceit that a new venture has a shot of winning at all, under any circumstances, was unknown throughout history, is still laughable across the globe, and remains rare even here in the United States.

And that’s why it takes a special person to succeed.  Notice I said “special”.  Not charming, philanthropic, beloved, clever, popular, persuasive, capable or handsome.

“Special”.

You know, I’ve attended several dozen “entrepreneur breakfasts” here in New York City hosted by various internet luminaries or fellow entrepreneurs over the past eight years since I started TheLadders.  Entrepreneurs can make good use of the dose of inspiration that comes from sharing, in the camaraderie of the breakfast table, the stories of challenges overcome, obstacles conquered, and victories won.

And while it’s never easy to tell which businesses and which people will win big this time around, it’s pretty easy to tell who is going to fail.

It’s the polite, patient, purposeful people.

Being an internet entrepreneur requires a certain antic disposition, a degree of self-immolation, and a dorkish obsessiveness with seeing the digital bits line up in a row.  Not just an enjoyment, not just a desire, but a gut-level craving, an existential need, to see the machine come to life.  That burn that flares so intensely in the dark of the night that it awakes you: to  stare at the ceiling, to wonder expansively, to turn every part of the creation over and over and over in your head as the clock flicks the minutes into the small hours.

Many, perhaps all, who come to entrepreneurship want the fame or the fortune or the fellowship, but it is only the ones who need it badly enough that will suffer through.

I remember sitting next to one very, very nice woman at one of these entrepreneurial breakfasts in 2007.  She had a great idea and a clever execution for an advice site — something like Daily Lit for the self-improvement set.

I asked what the URL was; she said the site wasn’t live yet.

I asked when it was going live; she said, with some pride in the accomplishment, that they’d already spent 18 months on the design, copy, coding and business model, and were lining up famous names to endorse the site when it went live, which they were preparing for next year at about this time.

She asked me if I had any advice for success.

I said yes.

“Put down your fork.

Get up from your chair.

Walk out this door.

Go to your office and call all of your team together. Lock the door and let everybody know you are not opening it or leaving the office until your site is live and accepting customers.”

I suppose another characteristic of entrepreneurs is our directness : )

Well, of course, she objected: that’s not practical, it’s not considerate, we still have planning to do before we’re ready for launch, and it is essential that we be perfectly positioned because you only get one shot to go live with a consumer brand.

And you know what?

She was absolutely right.

But so was I.

You see, being an entrepreneur is unreasonable.  It is arrogant.  It is unusual.

You are asserting that, despite the presence of 7 billion other people on the planet, and a US economy that produces $14 trillion in goods and services each year, and over 100 mm white collar workers in our country, that you, little old you, have come up with an idea, a business, a company that none of those other wonderful human beings have thought to invent yet.

I mean, c’mon, there’s no denying that it’s arrogant to say that you are right and everybody else was wrong to not see the wonderful opportunity that your company is pursuing.  That they were fools to just leave the dollar bills waiting there for you to pick them up.

And part of that unreasonableness is realizing that you are in a fight for your company’s life every day.  Every day that you are not “live” is a day you’ve lost the opportunity to make an impression.  Every day that you’re not bringing in cash is a day that you’ve lost the chance to expand your payroll.  Every day that you’re not pleasing customers is a day that somebody, somewhere else, will.  Perhaps they’re not doing it as well as you know you eventually will, but the plain truth is that they are pleasing them today and you’re not.

So here’s my 3-step checklist to figure out if you’re failing as an internet entrepreneur:

1. Is the site live yet?

Yes: you’re likely failing, but at least you’ve got a chance of getting some feedback from real, live users, which may, if you’re smart and perceptive, decrease your chance of failure a little bit.

No: you’re failing.

2. Do you have free customers yet?

Yes: well, now you have a shot to establish relationships. And if you listen carefully and not pridefully, you just may have a tiny chance of hearing them correctly and improving your customer experience from awful to plausibly bearable.

No: you’re failing.

3. Do you have paying customers yet?

Yes: congratulations! You have reduced your chances of failing from 100% to 99%.  There are many more chances to fail along the way, but you have graduated to some of the more interesting ones.  Good show!

No: you’re failing.

If, when you wake up in the morning, the answer to any of the above questions is “no”, then you’re failing. Not failing tomorrow, or next month, or next year, but failing right now, today.  As you read this…. Now.

And what you need to do, what you must do, is to spend your entire day focused on changing the answers to yes.  Desperately, immediately, fully.

The very nice polite woman who had purposefully set out to make an enormous splash with her internet company did indeed get it live the next year, and her patience paid enormous dividends… to her competitors from vertically-focused advice sites.  She struggled along for a couple years and then failed.

You will too, if you’re still reading this, and not locking the door to the office…

Write us your thoughts about this post. Be kind & Play nice.
  1. mcenedella says:

    delete ________________________________________

  2. mcenedella says:

    Very, very good question. Each of those companies' business model turned out to be “Platform”, and at first blush I'd say getting #2 right is more important than making #3 happen, but it is also an order of magnitude more risky – platforms are rare, rare, rare businesses. Hence, perhaps one could expect to find that the arrogance of the founders would be even greater than normal. Would be an interesting hypothesis to pursue.

  3. Right on sir. Entrepreneurs are irrational too! The odds for success in an internet startup is very small. Only an irrational person would take it up. Especially if you are giving up a 6 figure assured salary!!

  4. Dave says:

    I loved this article. It's that slap in the face that many entrepreneurs like myself need. Thank you very much for sharing!

  5. Great post. I'm also surprised you're the founder of theladders. I tried the site for a while but eventually stopped because it felt like a paid wall in front of listings i could find elsewhere and that didn't instill a lot of trust. Still, great post. Back to work.

  6. Fantastic article ! I work as a mentor with a number of start-up companies, as well as running my own, and I'll be sending them all the link :)

  7. Rick Falls says:

    Hurray !

    I'm not failing according to your criteria.

    I refuse to fail, what I have is far too much fun for me to
    deliver to the people who love my help !

    Besides that I've garnered a lot bruises getting to where
    I've gotten so far, and I've made a fool of myself in
    front hundreds if not thousands of business owners

    Thanks for the fork advice, she was likely just drawing
    attention from those of us DETERMINED to WIN anyway !

  8. bizdevr says:

    I like the post, but I'm really tired of this concept that you have to be this overly obsessed freak of nature that gets no sleep to be an entrepreneur. A lot of us are very passionate about what we do also, but there's this picture painted about the entrepreneur like he/she's some nut case. I really don't think that has to be the case. I think it's very important to recognize how big some entrepreneurs are looking to make their company. If you're looking to completely revolutionize the world, then yes. Maybe you do need to be some oddball. But if you're looking to make a healthy profit and just offer a great product, I dont think you have to be that mad scientist that doesnt sleep.

  9. Skill-Guru says:

    Great stuff Marc. I learned from the my first venture that at least you should have booked a domain, made the site live with index.html and started with a blog. The bare minimum product can follow.
    very high chance that you would have to change on what has been developed after you hit the roads

  10. Love it , im spreading this far and wide

  11. YogiFish says:

    Thank You For The Advice Marc. My Door Is Locked, And Double Bolted lol

  12. YogiFish says:

    So True. I Can Not Settle For Less Than What I Know Is Ture. I Think That's The Other Driving Force Inside.

  13. vinsmittal says:

    Inspiring post. Thanks.

  14. This article right here is a reality check. I need not say more. I just need to execute, execute and execute to make to I dont fail right now, today or in a year. The truth is at the end of the day we all fail. its the cycle of our existence. Great Article Mr. Marc.

  15. surayaUWC says:

    My project manager in the business incubator where I'm developing my business would say that if i took your advice I'd be jumping the gun because my product hasn't yet gone through a market fit process where it is validated by prospective users.
    I wonder what you would say to him?

  16. Steve says:

    The interesting part to consider for me is that “failing” is a state, not a destination. Not a dead end. Usually.

    It is something you can get out of if you make swift, smart, strong choices.

  17. Nyceane says:

    I really like how you are being direct about everything. I have my fair share of going to these meetings after moving to SF. And another big one I really want to say, if they are looking for a technical Co-Founder, they are failing.

    If you are solid entrepreneur, Technical guys will be more than happy to jump into your laps. But majority of the times it's just some stupid idea that waste engineer's “precious” time that they can either work towards something for themselves or make money off consulting.

  18. TC Coleman says:

    Great post! Supports our mantra of taking daily, measurable, upward action.

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