The 4 psychological stages of an entrepreneur

The classic image of an entrepreneur is that of a man who believes so much in himself and his vision that he succeeds in the impossible. Against the odds. Despite limited resources. Against all those who have told him, over time, that what he has in mind will not work.

It is the classic "from zero to hero" story, which is repeatedly served to us by the media.

"I BELIEVE IN MYSELF!" is what seems to be lacking in someone who starts an activity on his own.

And today, I want to dispel this myth. Because the entrepreneurs I know, even though they trust them, always live in doubt about their abilities.

I have three examples in mind

One is that of an entrepreneur I met in a pandemic, after the first wave, at his office. He had a business that was somewhere around two million euros in turnover. Look for someone to help you overcome the "growth" blockage you are in.

"I don't know if I'm the one to take it on. I often wonder if I can't do more than that and it's time to leave it to someone else with energy and a new vision."

Today, 2 years away, his business has a double turnover. Also with him in the lead. The questions he asks are the same, from this point of view nothing has changed.

Another example, a little different, is with a friend who has a business of over 15 million turnovers. I refer to the number only to position an argument, namely that all entrepreneurs go through the same mechanisms, regardless of size.

On the zoom, after he had missed another (entrepreneurial) project, after a year and a half of effort, he said to me with a shy smile on his face.

"I felt a little hurt in my love that he didn't come out."

This is proof that entrepreneurial failure does not discriminate based on how much money you have in your account, nor based on experience or lack thereof.

If I was talking about 2 million, then 15+, the third example I have in mind is that of someone who called me last week and started something on his own, starting from his expertise. A year and a half invested in time, lost investment money, with collaborators who took the plunge to start something on their own in the same industry.

"I tried to do something different, which doesn't exist in Romania. Maybe I should accept that I can't do more. Or that I can't do more, that's also an option."

All lines are part of any entrepreneur's inner dialogue, regardless of the size of his business. Doubt about one's own ability to make things work is part of the main course of food for entrepreneurs.

I have not met anyone who has succeeded exclusively because he trusted him. Without entrepreneurial failures. Without a doubt (even often). Without having unanswered questions, no matter how much you think about them.

The only difference between him and someone who has the same doubts, but does not have a functional business - is that the entrepreneur can operate in a system based on uncertainty. In other words - although he has doubts, although he constantly doubts his abilities, the potential of his business, and the market in which he is - he is moving forward.

What does the entrepreneurial path look like today?

From my point of view, in entrepreneurship there are four major psychological stages, defined by the time invested, more or less:

1. Stage of the first sale (0-1 year)

In which the effort is one of analyzing the competition, designing a product or service that is viable, and of a first sale, which proves that it is possible to go further.

It is an extremely demanding stage, which is based mainly on the philosophy of MVP (minimum viable product), which says that a product is built at a minimum quality level, but viable so that the market can be tested. By a sale, that is.

Some people delay the launch moment extraordinarily long, focusing on documentation & analysis, image, offer sites, and construction of endless funnels - consuming large resources, only to find out in the end that the market is not interested in the proposed product.

In opposition, other people make the sale without even having the product and then find it difficult to deliver what they promised.

None of the extremes are desirable. Usually, this stage can last between a few weeks and ... years. If, however, a year has passed and you have not tested the sales process and your product, you are heading for a wall.

2. Solid confirmation stage (1-2 years)

It is the stage after you have validated the idea, that is, after you have made the first sale, you have seen that there is a demand and you have decided to build the actual business.

The effort here is massive because it involves a total focus, in which you give your best so that you can build the skeleton of the business.

At this stage, while repeating the sales process, you form teams, procedures, platforms, databases, create content, and build assets. Behave with your business as if it were already functional. It is mostly functional, only the results usually come with a consistent effort and are dependent on you as an entrepreneur.

At one point, somewhere in the first two years, there was this extremely hard, introspective moment for the entrepreneur. It is the moment when he answers (with a hard yes or no) whether he continues or not, whether he goes to the end or not.

From my point of view, you pay 1-2 years of life for any business idea you implement or for any major change of direction or new activity that you bring to your company. If you give up before the age of 1-2, it is as if you did not give everything, as if you put your finger in the water and decide that you do not know how to swim.

You need 1-2 full cycles (years) to understand if it works if it can take flight so that it doesn't depend on you so much, and if it's worth the whole story.

Many times, the fact that you do not come with a solid confirmation on the business started does not necessarily mean the total abandonment, but a change of direction. (another approach, is different from what has been tried in the recent past).

In large companies, internal projects that are coordinated by entrepreneurs - also have 1-2 years for a solid confirmation (or refutation). A hard yes or no.

3. Profitability stage (4-5 years from the beginning of the business)

That's about it until the activity stabilizes a bit and the money starts to appear, "for real".

Whoever makes money before this period, most likely does it after a sales process rather than after a built and functional business.

There is a chance that you will never reach this stage. The evolution of a business is like an energy meter: it resets every time you start something new. In other words, if you give up a business in which you have invested 4-5-8 years without reaching the 3rd stage, if you start from the beginning, in another field, you will start with stage 1, again. The stage will last about the same.

Why? Because entrepreneurial failure does not discriminate based on how much money you have collected in the account, in the meantime, nor based on experience or lack thereof.

You just start from scratch. Yeah Al that sounds pretty crap to me, Looks like BT ain't for me either. I've worked with too many people who busted one business just because they had succeeded in another.

This is also the central point of the article: I met many people who started a business because they trusted them. So big that they failed to adjust their vision to the market. And they forgot to take their foot off the accelerator.

In this third stage, the business is functional (even without an entrepreneur), there are integrated systems, and there is profitability. Here the business is waiting for a decision - if it attacks the market and grows, with the risk of everything falling at some point, or if the growth is capped and it goes on relative stability.

What is known, however, in the entrepreneurial area - is that if a business does not grow, it decreases. In other words, if the growth is capped and only stability of the activity is pursued, the business will fall, sooner or later.

Entrepreneurship does not forgive any weakness. It only works according to the "grow or die" philosophy.

4. Market domination stage (9-10 years from the beginning of the business)

It is the stage where you should be the market leader (or in the top 5-10% of your industry, among the best of the best). Most businesses die before they get here or get stuck along the way, unrecoverable.

But your business should be mature now if you have kept a consistent progression and if you have learned your lessons along the way.

The steps I propose are purely indicative and have nothing to do with the money in the account or the financial stability of the company itself, but rather with the evolution of the entrepreneur behind a business.

Finally

Why did I tell you all of the above? Because there is still a level of perception of the role of the entrepreneur - this image of the crazy, visionary man, who believes in his strength to the point of absurdity and believes in the idea with which he set out. And that he does not give up, regardless of the consequences.

That he broke the walls with his forehead.

And entrepreneurship is presented, ideally, as a road that leads only to the front.

The reality is very far from this picture. Yes, the entrepreneur is visionary, because he trusts in a "vision" (a delusion, imagining the future, different from how others perceive it). We can argue that he has the courage and confidence in himself, otherwise, he would not move.

But at the same time, an entrepreneur has constant doubts about his abilities, beyond the confidence he has in himself and the image he propagates.

If he had no doubts, he would not be able to advance on any of the four stages. And he wouldn't know how to change direction when the market says a big "no" or when his initial assumptions turned out to be wrong.

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