Passion alone is typically what drives a founder to get a new business off the ground. Start-ups have little other fuel to make them go; their futures are completely dependent upon the founder’s zeal and dedication to the idea. Unfortunately passion and dedication are typically not enough. In fact, 80 percent of new businesses fail within the first five years, according to a study by Inc. and the National Business Incubator Association.
So what’s the cause of this failure? According to consultant, investor, and author John Bradberry, the cause of these failing start-ups is also the same driver for many successful businesses: Passion. Bradberry argues that falling in love with a business can cloud one’s judgment when making decisions around the business.
Bradberry is fully aware that his latest book, 6 Secrets to Startup Success, will be a tough reality check for some readers. Starting a business demands an incredible amount of hard work, long hours, and very little compensation. In a recent interview with Bradberry, conducted by Inc. Magazine, he explains why passion alone can’t fuel a start-up, and why supplementing excitement with realism and preparation is what’s key to successfully sustaining a fledgling business. The following are excerpts from that article:
What is the passion trap?
The passion trap is a cycle: A pattern of beliefs, choices, and behaviors that are linked to each other. It’s a self-reinforcing pattern. Each of us has probably been a true believer in some great idea, some big idea. If I have an idea that I believe in strongly, that’s a core belief I have, so I make decisions and choices based on those beliefs. I also interpret data from the environment that tends to support my beliefs, and then I take actions, and those actions create some kind of results that can be evaluated.
There are two sneaky things about the passion trap, it tends to operate at a subconscious or unconscious level, so we’re often not aware that these cognitive biases or these filters are at work, and we actually believe that the world or the marketplace is confirming our thesis about the business.
The other thing that’s sneaky about the passion trap is that it feels good, and there’s a lot of feel-good culture in a lot of the entrepreneurial literature—not only the literature, but the support systems, the communities around entrepreneurs and start-ups, is often all about “follow your passion.” I think there’s a reinforcing belief that says if you’re following your passion, feeling great is a signal that you’re on the right path.
Is the passion trap what inspired you to write your book?
I set out to do an immersive study of what I would call “success factors among start-ups,” so I brought my own experience and observations, but I also looked at the academic literature and the popular literature, both hard copy and online. At first, I was alarmed at how many businesses really do fail and the high percentage of start-ups that don’t make it, and I became more intrigued with what’s going on there. Typically, a lot of these ideas are good ones, and the founders are pretty talented people.
I found the main reasons why businesses fail or succeed are not all that complex. They’re fundamental mistakes that founders make, like assume market demand is there when it’s not, or they don’t raise enough money, or they don’t watch their expenses closely enough. I looked for underlying causes. I began to see a pattern: I called it “entrepreneurial traps,” because I think there’s more than one trap that a new entrepreneur tends to fall into.
One I called the money trap, is when someone ends up with their back against the wall, they’re running out of cash, and at that point it’s too late to raise money typically, because investors aren’t going to be enamored with a desperate entrepreneur. The other I called the capacity trap, which is when an entrepreneur is stretched so thin that they can’t or won’t come up for air and bring on additional talent or resources in order to grow the business, so they’re just like a rat on the wheel.