Of The VisPlaDes Formula!
In many gatherings that I go to now, where people realise that we seem to be building a successful startup, I get asked a lot of questions
In many gatherings that I go to now, where people realise that we seem to be building a successful startup, I get asked a lot of questions.
How is it going? What is the one piece of advice you want to give the students? Is there any formula you follow? What’s it like?
Now it’s easy to guess where these questions are coming from. There are formidable statistics stacked up against a new company. As many as 90 per cent of startups fail after the first year. Of those who pass, another 70 per cent perish after the second year.
If I recall correctly, we now have a 63 per cent chance of success – but equally important is a 37 per cent chance of failure. So, what is a good, sensible piece of advice to give to future entrepreneurs? VisPlaDes! Long- term Vision. Mid-term Planning. Short-term Desperation.
In the long term… and I guess you would define the long term according to the industry you are in and the stage of growth you are in, you need a vision. Currently for me, long term is about a year. Now I know that sounds a little myopic — but distances of two to five years, is more a wishlist than an active target. But the interesting thing is that as the years go by, the long term lengthens. (“It used to be three months!”)
So, in the long term you need a Vision of where you want your company to be or what you want it to be doing. And here if you have a good core team then their visions may be different from yours — more dramatic, more ambitious, more futuristic. Every first generation entrepreneur is mentally scrambling for survival, so it is his younger team or second generation who dare to dream.
So often, when people ask me where our company will be in five years’ time, I say I have a good idea but my son probably has a better idea!
Now to the mid-term. Planning. This is more or less the next 100 days. You’ve got to have a plan for what you want to achieve and how you want to achieve it. But here’s the kicker.
You don’t just need a plan. You need Plan A. Plan B. Plan C. And Plan D. Because there are more than 50 per cent chances Plan A won’t work. And another 30 per cent chance that Plan B won’t work either. So often, it’s a combination of a Plan A, B and C that gets the job done. Do you ever have to go down to a Plan D? Yes, especially in the early stages of a company. I think we’ve had to visit Plan D twice. And what’s after Plan D? Well there’s Plan P. Pray!
Which brings us to the short term — Desperation. The short term in this definition is between 30 minutes and 30 days. It is a mad agile full tilt effort to keep a yacht on course during a storm. How do you react to a googly that a large possible funder suddenly bowls — you have 30 minutes to decide. What do you do when a sure key assignment suddenly gets postponed because your client is admitted to hospital? You have ten days to recover and meet your month’s target.
What do you do when the same thing happens on the 29th of the month? You have 48 hours to phone, email, persuade, cajole or hustle a client to give you a contract. So once again, you have to have multiple plans in mind.
The interesting thing is that it does get easier. In early days, just takes an earthquake of a 6 Richter Scale to bring the company down. And you face this kind of ELE (Extinction Level Event) every two months. Later, even an 8 level quake rocks you, but doesn’t break you. Are you ever off the hook completely?
Never — ask Cyrus Mistry!