My goal each year is to smash my most well-held idea.
So it isn’t about review of successes and failures, but going deeper to identify the wrong perspective I can smash so I can get closer to reality to achieve better results.
2019 was a busy and a fruitful year. I was amazed by the number of completed activities and milestones when I looked through the entire 2019 calendar. The business did well by achieving more than 50% revenue growth.
I should be happy but I wasn’t. I felt unaccomplished and upset.
The fact was that despite a respectable revenue growth, the business ended with a loss.
I wanted to grow the company and I did that. But somehow I cared about the net profit more than I would like to admit.
The funny thing was that I planned for a breakeven for 2019 in pursuit of growth. My perspective was that we should pay zero tax by re-investing our profits to grow our business. Hence I allow myself to be loose with spending and went on a hiring spree and pursue projects that cost more with low chances of success.
In the middle of the year we had lower than expected sales and I could really feel the heat of depleting cash in the bank for consecutive months. Things turned for the better nearing the end of 2019 but not enough to dodge a loss. I guessed I have overestimated my tolerance for running the business without a profit.
The loss translates to big changes to the business going forward as well as my emotional well-being. It means that many plans and some people have to be given up as part of the cost management exercise.
Probably that’s why I felt like a failure. I couldn’t follow through on the things I set out to do. I had to break my promise to nurse the business back to health. Moreover, I couldn’t give out more bonuses to everyone including myself. The lack of tangible rewards adds on to the feeling of failure and that I was wrong for a few key decisions made.
The first well-held idea was that growing the business means spending more. It is true but not entirely true because spending in the wrong areas won’t bring growth, and in fact, it might backfire and cost more to unwind. Another problem is that revenue is projected but costs are very certainly incurred. I must be more cost conscious and only re-invest in the right areas of the business. I should have taken a leaf out of my best book for 2019 – The Outsiders on this aspect.
To make things worse, almost everyone wanted something more from me despite the business making a loss. Staff wanted pay raises, freelancers wanted to increase fees, and we were wasting resources in exchange for suboptimal performance.
People management is really the toughest part of running a business. It is also the most emotionally taxing activity too.
This leads me to the second well-held idea – Everyone likes a nice boss and will reciprocate with good work. I thought giving people liberty and freedom to explore how they can help the business is good culture. In return, they should be happy with a nice boss and of course the pay. This thinking was reinforced by reading many tech founders’ stories whereby they talk about not micromanaging and shaping a healthy culture etc. It was confirmation bias and a bullshit story I invented. The truth is that managing people is tiring and I don’t want to be emotionally drained. Especially when I need to be a bad guy and scold people. No one likes to be the bad guy 🙁 So I chose the laissez-faire system but it doesn’t work when employees don’t know what to work on and how their successes are being measured. To be fair, this system worked for some employees that I have but usually they have a lot of initiatives and the thinking was right most of the time. The more junior employees lack the experience and knowledge and hence would need more guidance which I didn’t give. I need to step in at the earliest opportunity when I sense something is wrong, rather than let it fester for a long period and get frustrated with the results. Being a bad guy is necessary because I cannot expect the same standard from everyone. I like what Harvey Spector said, be “tough but fair”.
At the same time, it is tempting to think that I could save all these troubles by doing it alone and even earned more by myself. It is easy to be self-centred when I feel the world is not being fair to me. I have been contributing the most revenue to the company and yet I am not the highest paid. To make myself feel worse, an external trainer can take in more than 3 times my pay!
In this sorry state for myself, I tend to revert to monk-mode once I have met some failures while trying to be bolder. Isn’t it easier to do it alone? Since the business can’t scale, why have unnecessary expenses by having staff and have to share the profits with other shareholders who don’t contribute. I could be richer if it is all about net profits doing it myself than with the company.
The third well-held idea is that I am being egoistic when I have thoughts of going alone. On the surface it seems like I’m guarding my personal interest and sanity. But the actual fact is that I was protecting my ego. The feeling of failure is awful and my ego doesn’t want to get hurt again so the safest way is to give up. Only egoistic people think they can do everything themselves, and that they are the pillars of success compared to the rest of the teammates. They think they are so important and are basically Prima Donnas who don’t need help from anybody. That was my ego speaking. I need help. I still have got a lot to learn. I’m not there yet. I lose my chance to learn the moment I decide to abandon the ship and it is only comforting in the short term.
Why not flip it around and think like a warrior and drop that ego – what can I do to grow the company and leverage on my staff and shareholders? One growth plan has failed but it doesn’t mean there aren’t any more ways to grow. There must be a solution which I can build on the current success instead of starting from scratch.
Think about other ways to grow the business and grow myself in the process!