Setbacks are almost inevitable when starting and growing a new business. They come in many forms, including issues in building your product, getting your first few customers, raising capital, hiring the wrong people, or losing critical customers or employees. As an entrepreneur, all of these qualify as “your problem” and can be quite stressful.
In the midst of this chaos, the most difficult thing to do can be to stay level-headed, keeping an empowering perspective and acting quickly to overcome each obstacle.
Some of the best advice I have received for dealing with setbacks comes from ancient times, and they are just as applicable to business today as they were hundreds or thousands of years ago.
Keep things in perspective: “This too shall change.”
I remember in my first startup. We had a meeting with the 800-pound gorilla in our space (IBM). Before the meeting, I thought, “This is the most important meeting of the company—it better go well!” While the meeting didn’t go poorly, it ended up being not as important as I thought it would be to our long-term success.
Within a year, we met with venture capitalists who were interested in us and wanted us to meet their full partnership. Once again I thought, “This is the most important meeting of the company.” We were going to raise our first million dollars in financing, and we had never had that kind of money before. It didn’t go as I expected, but we kept moving on and were able to find the right investment partner.
A year later, we were meeting with a major potential client for a million-dollar project, and once again, I thought the same thing. In each case, if things didn’t go our way, the outcome wasn’t as bad as I thought it was going to be. In fact, we were always able to keep moving on and find the next step.
There’s an old story where a king asks a vizier to give him a present that will make him happy when he’s sad and sad when he’s happy. The vizier gave him a coin that said, “This too shall change.” It turns out this is as true in the world of business as it was back in the days of kings and viziers.
If there’s one thing I’ve learned from 25 years in startups, it’s that the past does not equal the future, since conditions in the marketplace frequently change. When things are going badly, it’s never quite as bad as you expect it is in your mind, and when things are going well, things never go quite according to the good plan either.
By keeping this perspective of constant change, you cannot let a setback disempower you, and you can avoid overreacting and learn to roll with the punches.
Act like a warrior: See clearly and calmly take action.
One of the biggest challenges to dealing with a setback is to see clearly the reasons for the setback and to take the appropriate action. In the first scene of the 1954 film, “Seven Samurai,” we meet the samurai Kambei Shimada (played by Takashi Shimura). When an outlaw has kidnapped a child, Kambei shaves his topknot and calmly grabs two balls of rice, acting as a Buddhist priest, rescues the hostage and captures the outlaw.
What can this teach entrepreneurs? There is always an action that we need to take in the wake of a setback, and it’s better to calmly take the action—in the philosophy of Bushidō—the way of the warrior.
In one of my startups, our biggest customer, Apple, kicked us out of the app store. They owed us hundreds of thousands of dollars, and it was our primary channel of revenue. It was a major setback and it looked like we were dead in the water. I not only needed to come up with an alternate strategy, but also to tell our investors what had happened, and we were unsure if Apple would even pay us. We shifted the focus of our business to Google’s Android platform, which was not as lucrative as the iPhone. Apple eventually paid us, and our investors were supportive of finding a path forward. We were then able to release games on the Apple and Google platforms. What could have been a company-ending event wasn’t.
These two pieces of advice have always stayed with me and helped me overcome whatever setback my startup was facing at the moment. Although setbacks are very real, by getting overly upset and not keeping a long-term perspective, you can dig yourself deeper into whatever hole was created by the setback.
On the other hand, if you can take these two lessons to heart, you’ll be able to navigate any storm you are currently facing, calmly leading your team to greater success.
