I’ve always been a keen swimmer. I remember those early lessons, squeezing into my trunks, a pound for the locker, a rubber wrist tag for the locker key and my weird fitting goggles. To this day I have not mastered the art of goggles – they are either too tight, let water in or foggy. I resign to the fact that they are part of the swimming experience.
In my head, I am an elegant swimmer, gliding gracefully through the water. Until a ten-year old whizzes past me with the grace, speed and poise of a dolphin and the sheer strength of the ancient gods. I wonder why these gods did not endow me with this gift. On good days, I can swim for up to an hour (not that time spent is a barometer for success). This is a long time for my mind to wander, in between worries of drowning or feeling like I could give Phelps a run for his money.
Recently, I’ve met a couple of blokes who are training to swim the English Channel. They are in the sea each morning at 7am as I walk the dog. I admire their commitment and motivation, and marvel at their sheer bloody-mindedness as they get into the water each morning, regardless of the weather, as I stay safely on shore. I am in awe of their tenacity and ambition for their challenge ahead.
All this talk of swimming allows me to introduce the Warren Buffet quote, Only when the tide goes out do you discover who’s been swimming naked. It’s a very apt idiom for the current business climate for startups. There’s little evidence that Buffet skinny-dipped himself as the motivation for the quote, rather Buffett is referring to the more mundane tendency of companies to overextend when times are good, only to regret their imprudence when the tide eventually (and inevitably) turns.
What he meant by that is when business conditions in general are favourable, most participants look good. Flawed business models/practices temporarily show decent profits. On the other hand, when business conditions worsen, it is much easier to see who truly has a good business model versus who is just getting lucky during the boom times – meaning, you don’t really know how well or how poorly a company is doing until it’s faced with a major challenge.
Well, the tide has just gone out again, and clues to who’s been swimming naked have begun to emerge, as the financial system is about to undergo its first real-life stress test since the 2008 financial crisis and subsequent recession. While the full extent of the damage remains to be seen, there’s no doubt that the virus will take a serious long-term toll on global economic activity.
There’s no reason to believe that anything of that magnitude of 2008 is lurking within the financial system today, but the financial plumbing is under pressure. All of this is unfolding after years of low interest rates, which have left the Bank of England with little room to manoeuvre. However, unsettling volatility surges into longer-term opportunities. Long periods of economic calm and growth also create the conditions for violent air pockets, as the economist Hyman Minsky research identifies: the phenomenon of prolonged stability breeds complacency as a precursor to instability.
During turmoil, differentiation gives way to indiscriminate action, as explained by the market for lemons theory put forward by George Akerlof, and by the work of Nobel Laureates Michael Spence and Joseph Stiglitz. It becomes very difficult to signal your offering provides more value than others when the context is extremely noisy and volatility is unsettling, so even solid names get treated as ‘lemons’ initially.
There’s lots of talk about coronavirus as a ‘catalysing event’ for startups. For some, COVID-19 may be a jumping-off point that pushes them into an overdue pivot of product, or a much-needed refresh of digital marketing. For others, it will drag them under. So, what are your thoughts, given the challenges you’re facing right now, the tide is certainly out, what are you going to do to ensure you’re not caught out swimming naked in an outgoing tide? Here are some of my thoughts as you prepare to test the water.
1. Swim against the tide: allow yourself the uncomfortable luxury of changing your mind
Cultivate a capacity for reflection, and then as required, changing your mind. We live in a startup culture where one of the greatest social disgraces is not having a ‘north star’ and being full-on a hot-gas fuelled journey to success. But in reality, you could be working on hunches or insights, still experimenting based on superficial impressions or the borrowed ideas of others, without investing the time and thought that cultivating true conviction with customers necessitates.
We then go around asserting these donned opinions and clinging to them as anchors to shape our own version of reality. We can simply be wrong, or kidding ourselves. It’s enormously disorienting to simply say, I don’t know, but ultimately, it’s infinitely more rewarding to understand than to be right, even if that means changing your mind about a strategic belief, an ideology, or, above all, yourself.
2. Pace yourself: build pockets of stillness
Read poetry. Go for walks. Ride your bike going nowhere in particular. There is a creative purpose to daydreaming, even to boredom – the best ideas sometimes come to us when we stop actively trying to coax the muse into manifesting and let the fragments of experience float around our unconscious mind in order to click into new combinations.
Without this essential stage of unconscious processing, the entire flow of the creative process is broken. Most importantly sleep, as besides being a great creative aphrodisiac, also impacts our every waking moment, our social rhythm and our moods. Be as disciplined about your sleep as you are about your work. We tend to wear our ability to get by on little sleep as some sort of entrepreneurial badge of honour that validates our work ethic. But it really is a profound failure of self-respect and of priorities. What could possibly be more important than your health and your sanity, from which all else springs?
3. Jump into the water: start, even if you are not sure
I have always thought too much and the in the past borne the resultant cost of being paralysed by the noise and not doing anything. I have found many reasons not to swim, many excuses – other things to do, it’s a cold day, I’ll go tomorrow – you get the drift.However, the questions do not go away unfortunately, they are always there in some form or the other. How you respond to them is what matters.
Nothing beats the questions, like starting or doing it. If I need a reminder of making a start, I re-read the Elon Musk quote on innovation: There was a time when only those with the largest mouths could enjoy potatoes. Thanks to the invention of French fries, now they will fit pretty much anywhere.
Also, remember why you are there and what you are aiming to achieve. You must be crystal clear on your goal, whether you want to swim 10 lengths or 100 lengths, improve your buoyancy or if you want to swim faster.
4. Focus: how we spend our days is how we spend our lives
The Anne Dillard quote above about how use our time reminds me to ensure we retain the capacity for enjoying what we do, that gives startup life some highlights amidst the graft. The cult of productivity has its place and getting stuff shipped is important, but presence is far more intricate and rewarding an art than productivity. Ours is a startup culture that measures our worth as humans by our efficiency, our earnings, our ability to perform this or that, but this loses sight of learning, having our own definition and perspective of success, and our purpose.
The tide will turn, and expect anything worthwhile to take a long time. It’s hard to better capture something so fundamental yet so impatiently overlooked in our culture of immediacy. The myth of the overnight success is just that, as well as a reminder that our present definition of success needs serious retuning post-Covid. The allotment doesn’t go from seed planting to blooming crops in one spritely burst and yet, as a culture, we’re disinterested in the process of the weeding, nurturing and growing. But that’s where all the real magic unfolds in the making of one’s character and destiny.
5. Be curious: enjoy what magnifies your spirit
Understand and tolerate the difference between where you are and where you want to be, and then make it a habit to ask questions and be curious, even when the answers to those questions are uncomfortable. At the core of curiosity is understanding that you see the world through a particular lens of your own experience and ambition.
Curiosity is at the core of what drives the entrepreneurial spirit, the belief that you can solve problems with unique solutions and innovate on the status quo. Building a company relies on curiosity about testing different hypotheses and continuously iterating. This might be frustrating and you want to simply move forward, but I always tie this trait back to recognising the value of feedback.
I’ve been reading about musician Patti Smith, discussing her creative influences. She talks about writers and artists who magnified her spirit – it’s a beautiful phrase and notion. Who are the people, ideas, and books that magnify your spirit? Find them, hold on to them, be curious about them and visit them often. Use them not only as a remedy once your fading momentum has already infected your vitality, but as an ongoing vaccine while you are healthy to stimulate your curiosity and protect your radiance.
6. Push on: don’t be afraid to be an idealist
There is much to be said as entrepreneurs for focusing on the constant dynamic of startup interaction we call immediate progress. But which side of the fault line between nurturing and doing are we to stand on? The commercial enterprise is conditioning us to believe that the road to success is paved with catering to existing customer demands, but the idealist in me says the role of the entrepreneur is to lift people up, excite them with innovation.
On your startup journey, the richest inspiring days are lifeboats, but there are also submarines that descend to us to the darkest and most disquieting places, to the unfathomed trenches of the startup soul where our deepest embarrassments and vulnerabilities live, where we are less than we would like to be. Idealism is the alchemy by which you should strive to create something new, the engine of buoyancy that keeps the submarine rising again and again toward the light, so that it may become a lifeboat once more.
The sea, the green sea, the scrotum tightening seas – the words of James Joyce in Ulysses captures the reality that the sea doesn’t like to be restrained, it has a serene brutality, filling the wet, briny air. As Buffet highlighted, you can’t be caught swimming naked as the tide goes out, you need to set sail and not be tied at anchor, and sail not drift. Whatever the imagery, prepare yourself for the coming challenges by being thoughtful, balancing thinking and doing, but don’t be left standing with the water waist high, waiting to be embarrassed.