It is understood that airplanes burn vastly more amounts of fuel taking off and accenting to cruising altitude than they do for the remainder of the flight. I had a boss and career mentor use that point often to me early in my career as he made the analogy that the energy spent early in your business may seem disproportionate but it pays for itself later. Another life mentor has told me many times that airplanes are constantly falling. The aerodynamics of the plane along with a measured amount of energy keep the plane in the air. His point was to take care of yourself and your “dynamics” and understand where to focus your energy. I have also heard many times that flying is just falling with style. I could conclude the comparison here that every business can fail at some premature point in its flight. You can tell that I enjoyed the special sections 3 and 4 of the Supporting Fundamental where Amis and Stephenson review an excerpt from David Berkus’s book Better Than Money where Berkus uses a lot of flight analogies to describe a failing business and the options in bankruptcy.
Berkus makes the point that “any landing you can walk away from is good landing “cause you’ll live to fly again tomorrow”” So how do we recognize when our business may be failing and how do we fail correctly if there is no way to save it. Berkus also points out that many entrepreneurs, as many times they are in the pilot’s seat, may not be able to recognize when the business is failing until it is too late. Eminent bankruptcy may not only be hard to recognize for an inexperienced entrepreneur, but it may be a reality they do not want to face and may look to ignore it. Forecasting and Horizon scanning would be an important exercise for any entrepreneur and could give them the opportunity for contingency planning in case of failure. Most importantly, there reputation is at stake and how they hand the failure professionally may work in their favor for future ventures, living the fly another day.
I think it is easy to see where the founding entrepreneur may not have the best perspective to assess the overall health of the start-up. Only the most experienced that may have been through a failure may be able to recognize the subtle slow growing problems that can lead to bankruptcy and have the emotional competency to keep their ego in check. As angels have varying intentions of time and effort they will give to their roll in the start-up, the situation of an inexperienced entrepreneur may be where a lead investor is most needed. Supporting the entrepreneur with leadership and more importantly a different vantage point to recognize failures can provide much value. The reputation of all are at stake at how they handle any upcoming failure.
Until then, many of us seem to be on the runway and fine tuning our engines.
Amis, D., & Stevenson, H. H. (2001). Winning angels: the seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.