In a series of recent interviews with Inc. Magazine, author John Bradberry discusses the dangerous traps that typical entrepreneurs can fall into, in addition to the “passion trap.” Below, Bradberry, author of the recently-published 6 Secrets to Startup Success, talks about another common trap.
There’s another trap. I called it the “idea trap,” where someone is so emotionally attached to their idea that it creates a chain of events and misjudgments; over time, I began to call that the passion trap. Frankly, it just played better in the public with publishers. It had a little more stickiness as an idea. So I wrote the book to tell that story. I see so many unnecessary stories of failure, where the idea is a decent one, but not perfect. The founding team is talented, the funding is there, but the level of awareness and the ability to take a real honest look at both strengths and weaknesses is not there.
Could you share an example of someone being a victim of the passion trap?
There are four founders that are profiled beginning on page one, and you follow their stories through the book. One of them, named Lynn Ivey, is the most persistent, resilient founder I’ve ever known, but she got caught in the passion trap in a big way.
She and her investors built a facility for senior healthcare—an adult daycare center—and were certain that the market was there. The nature of that investment is what I call an “unforgiving strategy,” when you invest four to five million dollars in a facility before you can even test the product. You’re stuck if there’s not market demand for the product. It’s not like a software program that you can just pivot and try something else.
The day where I sat with Lynn Ivey, she was talking about the movie Field Of Dreams, about “building it and they will come.” She had built the facility, but they were not coming. I remember the taste in my mouth and the feeling in my stomach. I was a fan of this start-up and they had a lot of backers, but it was the realization that maybe there’s not a market there, and what do you do now?
In the truest sense, the story was in there as a cautionary tale. It’s not a failure story because she’s been able to convert to non-profit status and is actually slowly gaining her client base, and in reality she may have been five to 10 years ahead of her market. It was an idea that was too early for its time.
The last page of the book has an example of her serving these clients that she does have, and the incredible impact she’s having. She’s still not turning a profit, but because she’s been able to convert to non-profit status, she’s still standing. She’s been able to flex and reformulate as much as she can, given the nature of the product that she’s built.
Another example we use in the book is the story of the Segway. Steve Jobs, Steve Case, and John Doerr, the famous venture capitalist, all predicted it would be the most impactful product since the personal computer, and it was going to change the way cities were designed. They pumped a couple hundred million dollars into the manufacturing facility, and I think they were projecting 50,000 sales per month, but after five or six years, I think it had only sold maybe 50,000 in total.
So, the smartest business people that many of us could even think of got swept up in the belief that this product was too good to fail. Unfortunately, no one sent the memo to the customers. It’s an incredible technology and very innovative, it’s just that the fundamental laws in business were in play, like the idea is not great until the market says it is..