When it's time for an entrepreneur to ....phone an entrepreneur
I received a call on Friday from an entrepreneur I've known for a 7 years. He's a few years younger than me and has a company backed by venture capitalists. He's raised approximately 6MM dollars and has been trying to strike lighting -- professionally speaking -- for about 3 years. He started the call by saying, I've got a situation and thought I'd phone a friend.
He proceeded to tell me that he had already pivotted the company once about 1 year ago. He's since come to the conclusion that the path he's put the company on is a losing one. He's torn between two choices:
- Pivot again -- to something bold and he isn't exactly sure what that is
- Return capital -- Of the original 6MM raised, he still had 1.5MM
I empathized with his predicament....and his instinct to phone an entrepreneur (friend).
It was approximately 6 years ago that I made a similar call to a entrepreneur friend of mine name Tom Higley. I remember it vividly. It was a Friday night. I was CEO of Judy's Book at the time. We had pivoted once and had not caught lightning in a bottle. On that call, Tom asked me what my gut was. I told him I thought that I should shut the company down and return $0.50 on the dollar to my investors. By Tuesday of the following week, that's exactly what I did.
I did two things on the call with my friend. First, I asked this entrepreneur the same question that Tom asked me. I asked him what his gut thought he should do. Like most of entrepreneurship, there's no right answer to situations like this. Second, I told him the story of Judy's Book, what I did and what I learned with the benefit of hindsight. I told him I was glad I was decisive and acted on my guy but if I had a re-do I wish I had persevered. I think the fear of failing is worse than actually failing and in the situation with Judy's Book many things happened in the market after we sold the assets that would have totally changed my perspective. The iphone and twitter became phenomena providing the market context for Judy's Book and local search to take off. I could never have known these market externalities in advance. Ahhh....hindsight is 20-20 :-)
It was a fun call. I don't knwo what my entrepreneurial friend is going to do. I gave him some shared experience that I am sure he'll consider as he weighs his gut and his options. It's moments like this that make entrepreneurship so exciting and profound of a choice. There is no right answer and he's a meaningful player in determining a positive or negative outcome. He's on the field of life and business!