Asher's Blog

Entrepreneurs naturally spend a great deal of time imagining what could go right. We think about the customers we will serve, the revenue we will make, the people we will employ and the size of the company we might eventually build. That optimism is necessary. Nobody begins the difficult work of building a business without believing, at some level, that the future can become better than the present.

But experience has taught me that optimism, by itself, is not a plan.

If you want to become a good entrepreneur, especially when you are starting with limited professional experience, you do not need to wait until you know everything before you begin. You should start. Some lessons cannot be learnt in a classroom or borrowed from another person’s experience; you only understand them when customers reject an idea, a trusted person disappoints you, the numbers refuse to cooperate or a plan that looked excellent on paper meets the disorder of real life.

However, starting before you know everything does not mean starting without thinking. One of the best ways to create a strong plan is to imagine that the plan will not work.

That may sound pessimistic, but it is actually a mature form of optimism. It means that I believe enough in the outcome to prepare for the obstacles that could prevent it.

Begin by Assuming that the plan could fail

The first thing I have learnt from things not working out is to ask, before I begin, what I will do if they do not work out.

What happens if the sales projection is wrong? What if the product takes twice as long to build? What if the person on whom the entire plan depends leaves? What if our largest customer does not renew? What if the regulator changes a rule, capital becomes more expensive or the market moves in a direction we did not expect? What if the optimistic plan is simply wrong?

These questions do not weaken a plan; they expose where it is fragile.

Gary Klein, a psychologist known for his work on decision-making, developed a method called the premortem. Instead of asking a team what might go wrong, the team imagines that the project has already failed and then works backwards to explain what happened. The shift is subtle but powerful. It gives people permission to name risks they might otherwise suppress because they do not want to appear negative or disloyal. The underlying research on “prospective hindsight” found that imagining a future event had already occurred could improve people’s ability to identify reasons for the outcome by about 30 percent. Klein explains the premortem method in this Harvard Business Review.

I have come to see this as an essential entrepreneurial discipline. Before execution begins, imagine that you are sitting together one year later and the plan has failed. Ask every person in the room to write down the reasons. Perhaps cash ran out. Perhaps customer adoption was slower than expected. Perhaps the product was solving a problem customers did not consider urgent. Perhaps the team had no clear owner for an important part of the work. Perhaps the leadership team saw warning signs but was too emotionally invested to admit what they meant. Then build protections into the plan.

This is where scenario-based planning becomes practical. I like to consider at least three versions of the future:

• The optimistic case: What happens if the major assumptions work and execution is strong?
• The realistic case: What is the most probable result based on the evidence currently available?
• The downside case: What happens if revenue is slower, costs are higher, execution is delayed or a major dependency fails?

For each case, the numbers must lead to decisions. At what point will we reduce spending? How much liquidity must we preserve? Which investment can be delayed without damaging the core business? Which indicators will tell us that the realistic case has become the downside case? Who has the authority to act when that threshold is reached?

A pessimistic scenario that changes nothing is merely an unpleasant spreadsheet. The purpose of imagining the downside is to decide in advance how we will respond to it.

Planning for the worst is not the same as believing the worst

One of the most important ideas I took from Jim Collins’s Good to Great is the need to confront the brutal facts without losing faith in the eventual outcome. Collins calls this the Stockdale Paradox, after Admiral James Stockdale, who survived more than seven years as a prisoner of war in Vietnam. You will most likely see me mention this a few more times on my blog – I love this idea so much. It’s one of the secret of high achievers.

Stockdale retained confidence that he would eventually prevail, but he refused to manufacture comforting deadlines or deny the severity of his situation. His warning was simple: “You must never confuse faith that you will prevail in the end” with refusing to confront present reality. Jim Collins tells the full story here.

That balance is vital in entrepreneurship. You can believe deeply in the company and still acknowledge that the current strategy is failing. You can believe in the mission and still admit that a particular product should be closed. You can care about a person and still recognise that they are not succeeding in a role. You can expect to prevail in the long term without pretending that this quarter’s numbers are good.

The opposite of pessimism is not denial. It is hope that has learnt how to look at evidence.

Do not put passive people in leadership

The second lesson I have learnt is that passion matters, particularly in leadership.

There are people who may be competent but are no longer emotionally committed to the product, service or mission they have been asked to lead. They attend meetings and complete some of the expected activities, but they are not searching for solutions. They do not carry the urgency of the outcome. When something is blocked, they report the blockage rather than taking responsibility for removing it. When performance declines, they learn how to explain the decline instead of becoming determined to reverse it.

I have learnt not to leave such people in charge of leadership for too long.

This does not mean leaders must be loud, constantly excited or emotionally expressive. Passion is not noise; it is ownership. You see it in whether a person continues thinking about the problem after the meeting ends; whether they notice details without being prompted; whether setbacks produce curiosity and action rather than resignation; and whether they feel personally responsible for the quality of the outcome.

It is also important to distinguish temporary exhaustion from a deeper absence of commitment. Good people can become tired. A leader may need rest, support, clearer priorities or better resources. The first response should not always be dismissal. But when the pattern is persistent—when someone no longer believes in the work, resists responsibility and repeatedly drains urgency from the team—keeping them in leadership becomes unfair to the business and to everyone still giving the work their best.

Leadership magnifies whatever is inside the leader. Passion spreads, but indifference also spreads. A team rarely remains more committed than the person consistently setting its emotional and operational standard.

Sometimes the necessary decision is to redesign the role. Sometimes it is to return the person to work they can perform well. Sometimes it is to part ways. What experience has taught me is that delay does not make the underlying problem kinder. It merely gives it more time to affect customers, colleagues and results.

Use Experts, and tell them what you are really trying to achieve

Another reason things have failed for me is that I did not use experts early enough, or I consulted them without telling them my complete objective.

An expert can only advise on the problem they understand. If I provide a lawyer, accountant, engineer, product leader or regulatory adviser with half of the context, they may give me technically correct advice that is strategically useless. The problem is not necessarily the quality of the expert. The problem may be that I asked a narrow question while withholding the larger intention.

Sometimes founders do this because we believe that explaining everything will take too long. Sometimes we fear that the expert may discourage us. Sometimes we want advice that confirms a decision we have already made. At other times, we simply assume we understand the issue better than we actually do.

I have learnt to say clearly: This is what I am trying to accomplish. This is why it matters; these are the constraints. This is what I am worried about. This is the part I may not fully understand. What am I missing?

That final question is particularly important. Expertise is most valuable when it reveals a risk or possibility I did not know enough to ask about.

There is, of course, still a responsibility to choose experts carefully. Credentials alone do not guarantee judgement, and professional advice must be evaluated in the context of the business. But once I choose a competent adviser, hiding the real objective defeats the purpose of seeking advice. Transparency allows the expert to solve for the outcome rather than merely answer the question placed in front of them.

Make the objective clear, then, examine the reason behind It

Things also fail when the people responsible for execution do not share a clear understanding of the objective.

It is easy for a founder to assume that because something is clear in their own mind, it is clear to the rest of the team. A goal is announced, tasks are assigned and meetings begin. Months later, different people have been optimising for entirely different results.

One team member thinks success means launching by a certain date. Another thinks it means acquiring a certain number of users. Someone else thinks it means satisfying the founder. The work may be busy and even impressive, but the team is not moving towards one shared outcome.

This is why I now ask not only what are we doing? but why are we doing it?

Sometimes the “why” reveals that the goal we initially wrote down is not the real goal at all. We may say the goal is to launch a feature, when the true objective is to reduce the time customers spend completing a task. We may say the goal is to hire more salespeople, when the actual objective is to increase predictable revenue. We may say the goal is to enter a new market, when the underlying aim is to diversify currency exposure or reach a different category of customer.

Once the real objective is clear, the team may discover a better method than the one originally proposed. But if leadership communicates only the activity, people can complete the activity and still fail to create the result.

A useful objective should therefore answer several questions: What outcome are we pursuing? Why does it matter now? How will we measure it? Who owns it? What trade-offs are acceptable? What must not be compromised? By what date will we evaluate the evidence and decide whether to continue, change direction or stop?

Clarity is not merely about making instructions easier to follow. It allows capable people to exercise judgement in service of the same destination.

Return to the Facts Before the Facts Become a Crisis

The final lesson, and perhaps the most important one, is to face the brutal facts of the current reality early.

When something matters deeply to us, we can become remarkably creative in explaining away evidence. We tell ourselves that sales are slow only because of the season. We say that a leader who has repeatedly missed expectations simply needs more time. We call a structural problem a temporary setback. We celebrate activity because the outcome is uncomfortable to measure.

But reality does not become kinder because we postpone naming it. When things are not working, I try to return to the facts. What do the numbers actually say? What did we promise would happen by now? What has happened instead? Which assumption has been disproved? Is the problem the strategy, the execution, the timing, the market or the person responsible? What evidence would persuade us that the plan is working—and do we currently have that evidence?

Being factual does not mean becoming unkind or pretending that people have no context. If someone is not doing their job, there may be understandable reasons. Those reasons should be heard and the person should be treated with dignity. But compassion cannot require the company to deny the effect of persistent non-performance. We can care about the person while remaining truthful about the work.

Facts must lead to treatment. If the numbers are wrong, we revise the assumptions or change the plan. If the capability is missing, we train, support or hire differently. If the leader has lost commitment, we make a leadership decision. If the objective is unclear, we stop the activity and clarify the outcome. If expert input is required, we seek it and provide the full context.

The point of confronting reality is not to assign blame. It is to recover while recovery is still possible.

Failure should improve the next decision

Things not working out have caused me pain, but they have also improved the questions I ask.

I now ask what failure would look like before the work begins. I build optimistic, realistic and downside scenarios. I pay closer attention to whether leaders genuinely carry the work. I involve experts and tell them the full objective. I make the reason behind a goal clear to the people executing it. And when the evidence says something is not working, I try to return to the drawing board before pride, sentiment or sunk cost turns a correctable problem into a crisis.

None of this eliminates failure. Entrepreneurship will always contain uncertainty, and even excellent decisions can produce disappointing outcomes. Risk management is not the ability to predict every future. It is the discipline to prepare for several futures, recognise which one is emerging and respond before your options disappear.

The goal is not to become afraid of trying. The goal is to become harder to surprise and quicker to learn.

If experience teaches us only to avoid pain, it makes us smaller. But if it teaches us to plan more honestly, choose people more carefully, ask for better counsel, communicate more clearly and act on facts sooner, then even the things that did not work can help us build what eventually will.

References

• Jim Collins, Good to Great: The Stockdale Paradox
• Gary Klein, Performing a Project Premortem, Harvard Business Review
• Deborah J. Mitchell, J. Edward Russo and Nancy Pennington, “Back to the Future: Temporal Perspective in the Explanation of Events,” Journal of Behavioral Decision Making (1989)