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Shoot for the Horizon Not the Stars

By: Ned Stringham

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It is true that to be an entrepreneur you must have a vision for your business and be unconstrained in your thinking about what’s possible; however, one of the most overlooked ingredients for success is never forgetting what it takes to survive. Sometimes just surviving long enough for your market to come alive or to figure out the right twist in your product or message is the difference between winning big and going under. The true story for many successful businesses involves tales of near death experiences, re-direction, and the will to survive. Too often media focuses on the hype, entrepreneurs dream about being the next Facebook and it all ends badly–either the business collapses or the founders get massively diluted in order to raise the cash to survive.

To this day, for every business I invest in I know my key survival metrics. What is the core cost structure of the business and how many additional customers and units need to be sold to cover that cost in a month or quarter? If you are an executive running an early-stage business and you don’t know those numbers, you are arrogant, or, naive and reckless. Your financials should never be a surprise, with just a few key metrics in your head, almost anyone can estimate where a small business stands at any moment in time.

A leader’s hardest decisions are not when and how to celebrate the big victories, rather, the hardest decisions usually involve knowing what they must do to stay viable. Smart entrepreneurs are always seeking ways to mitigate risks that could kill the business without giving away the upside. While they must inspire, lift and motivate, they must also be clear, in the quiet of their own mind, what it takes to persevere and survive.

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