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Every entrepreneur has a fine line to tread. Between passionately believing in the product or service they expect will disrupt markets and understanding the art of the possible.
But ending up on the wrong side of that line can prove disastrous, as Elizabeth Holmes discovered. The world’s youngest self-made female billionaire was the founder of Theranos, a company valued at $9 billion at its peak in 2014.
The promise was that the company’s Edison test would revolutionize disease diagnosis by detecting conditions such as cancer and diabetes with just a few drops of blood from a simple finger prick. But the company collapsed in 2018 after the technology was found to not work. Holmes was charged with wire fraud and conspiracy to commit wire fraud. Earlier this year, he was convicted of four such charges and is due to be sentenced at the end of September.
Learning important lessons
Like all salvation stories though, there are important, constructive lessons to be learned here.
1. Have a strong, disruptive vision
The first is how vital it is to have a strong, disruptive vision — and the communication skills and passion to engage employees and stakeholders in that vision. But being honest and transparent is also imperative. At least because being less than honest will inevitably catch up with you in the end.
Related: How to Create a Growth Mindset as an Entrepreneur
2. Translate your big idea into operational excellence
A second lesson revolves around being able to translate your vision into operational excellence. And, execute your business plan step by step and consistently. Most entrepreneurs tend to excel at either the vision and communication element or the business side of things. What can make the difference here is honest and level-headed self-reflection and self-awareness.
That’s because developing these skills, while putting your ego in the backseat if necessary (and it usually is), will allow you to better understand your strengths and weaknesses. Doing so, in turn, will put you in a stronger position to fill your capability gaps and assemble a winning team with complementary gifts and expertise for yourself.
Having a little black book of useful contacts from social networks, membership associations and even casual acquaintances can help here. Taking advantage of the support and guidance of a mentor you respect can also make a big difference. Humility helps once again, as by allowing a mentor’s experience to help you, you can accelerate your learning.
3. Rotation with special timing
A third key lesson that can be drawn from the Holmes disaster is the importance of knowing when to pivot and bring about change. Even what you think is the best business plan in the world will inevitably go wrong. It may be due to unexpected changes in events or perhaps because it wasn’t quite right to begin with. Timing, as they say, can be everything. But the flexibility to change when the time is right is even more important.
Related: Want to Avoid Failure? Eliminate stiffness and develop flexibility.
4. Learning the value of difference
As a result, you must be prepared to face multiple turning points on the journey to success. These can range from changing your business model to retooling your technology infrastructure to recruiting an entirely new team.
But if you stubbornly refuse to rethink things even when the writing is on the wall, the bottom line is that the business can collapse. In other words, it is imperative that you constantly keep your finger on the pulse. Let yourself know if things are no longer working so you can take quick, life-saving action.
A final important consideration is the importance of using a diverse group. The problems involved in its omission can be clearly illustrated by the structural problems marring the UK financial system.
Thus, there may be a number of venture capital firms today willing to support early-stage companies with founders from non-traditional groups, including women, people from lower socio-economic backgrounds and different ethnicities. But it’s an entirely different matter for scale-up organizations trying to tap into private equity, a situation that inevitably leads to a brain drain to more hospitable US markets.
A similar dynamic applies to your team, however. For example, if you only listen to people who are like you. Your inevitable blind spots could very well result in you missing out on this critical moment to bring business orientation, as you simply don’t know any problems. Without the benefit of different opinions around the table, the inevitable question arises — can you ever really know if your product really resonates with more than just yourself and your inner circle?
In other words, becoming a successful entrepreneur means, of course, being relentlessly focused on achieving an end goal with the support of a great team. But it’s also about wanting to make meaningful change, on all levels, for yourself and others.
Related: Why a Strong Mindset Is the Foundation of a Successful …