If every plan that we ever imagined was going to play out as we had thought, everyone would be a millionaire! Is it not?
Things don’t go as planned. That is normal.
In my experience, perseverance is more important that intelligence in making sure that a business is successful. If you are incredibly smart but unwilling to persevere you are most certainly going to fail.
Sounds like a startup many have been talking about recently?
I was incredibly, unbelievably and astoundingly surprised when the story about Zoomo broke. A company which had been funded decided after looking at ‘data’ that things were not going their way and that they needed to shut down. They were further going to return the money that was leftover to the VC!
The internet erupted with jubilation and founders were being congratulated for taking the courageous decision. For giving up!
Apple was staring a bankruptcy when Steve Jobs came back to the company. If this is a good decision, by the same measure, Steve Jobs should have returned the money to shareholders. Would you even know who Steve Jobs was, had he done that?
Would any company have ever pivoted if they were to just call it quits and return the money since the journey they embarked on did not turn out the way they planned?
Myntra was founded as a company that was going to provide customised good, caps, wallets, mugs, t-shirts, etc. Things did not go their way and they had to start selling branded clothing, they pivoted. The data was obviously not supporting them.
You can hear Alex Shutlz speak in this video about the crisis of confidence at Facebook when they hit 100 Million users. Every social network before Facebook had hit a plateau after reaching 100 Million users, there was a school of thought inside Facebook, that they were done. But, they persevered.
Fred Smith was an undergraduate at Yale University in 1965. As part of the coursework, he wrote an economics paper exploring the process of transportation of goods in the United States. He found that the shippers relied on transporting large packages across the United States by means of truck or passenger airplanes. Smith thought of a more efficient transportation idea. He wrote a last minute paper on how a company carrying small, essential items by plane could be a much better business. He, however, did not go into details about how to actually run such a company. His paper was graded “C”. But Smith did not give up on the idea and launched the company in 1971.
But within three years of the founding of the company, Federal Express was on the verge of bankruptcy. It was losing over $1 million a month, due to the rising fuel costs. At its zenith, the company had just $5000 to its name. Smith made a final pitch to General Dynamics for more funding. The request was turned down.
Most ordinary people would have quit at this point and shut down the company. Not Fred Smith. What he did next is easily the boldest move by the founder of a company. Smith flew to Las Vegas and played Black Jack that weekend with the remaining company funds. Yes, all of the $5000. On Monday, the management of the company had a pleasant surprise lined up. FedEx had $32,000 in its bank account, which was just enough to cover the fuel for their planes and to continue operating a few days more.
Soon after, the company was able to raise significant amounts in funding. Today FedEx is a global giant with operations in more than 220 countries and territories and an annual revenue of US $45 billion.
So should he have given up? You do not know how the market is going to react. True. You also, do not know when the market is going to turn. Giving up is the biggest failure; in my books its worse than running out of money.
If Zoomo is going to be celebrated, we would probably never have another inspirational business story to share.