What is that Light?
There are moments when you are not sure if what you see is a light at the end of a tunnel or an oncoming train.
The startup journey is filled with moments of profound uncertainty. Moments when you peer ahead in the darkness or fog and see … something. What is that something?
Is that glimmer of brightness that appears in the distance the headlamp of a fast-moving oncoming train that is rocketing towards you with the weight of hundreds of cars behind it?
Is that gleam of light the turning point where the dominos start to fall in your favor, the path opens up, and the light at the end of the dark tunnel leads out into the sunshine?
The light in the tunnel often does not immediately resolve into something you can interpret. I remember when it took almost two years for what felt like a slow-moving light to resolve into what was clearly the freight train that crushed our business case. Bits of market information filtered in and eventually formed a clear picture that our value proposition had been eroded by a combination of improvements by the competition, insufficient technical progress, funding challenges, and a host of other interrelated factors. At first, the cracks were small and appeared disconnected. Then, trends started to emerge, but the data was noisy, and it was uncertain if what we were observing was really resolving into a trend or just a few outlier data points. By the end, the pattern of information became clear. However, that was not an instant process as a few data points were insufficient to make a multi-million dollar decision. Time and emerging information were required to reach a level of confidence to permit enough of the concerned parties to make the hard decision to give up and shut down the startup and write off the investors’ money and the team’s time.
One of the reasons a decision-making process like this is so tricky is that it can go the other way. The rushing light that looks like a killer train can actually transform into the motivation to make radical or difficult changes that ultimately mean that you emerge from the tunnel into a far better place. I remember another situation when a lead investor threatened to walk away from our investment deal if we kept on pushing in our negotiations. While he did not know it, the alternative lead investor had lost his partnership’s support and terminated discussions with us, so we had lost our other option. Now either we got this deal across the finish line, or we were likely to be forced into a firesale of the company by a disgruntled investor who had decided he wanted out. My Board of Directors wanted to keep pushing for a better deal, but I could sense that the lead investor’s patience was wearing thin, and it seemed we had pushed potentially to a breaking point. I could not afford to have him break. But I was not having success convincing my Board members to accept his offer as the best available. Then he called late on a Monday night and said terrifying words, “I’m done. You tell your Board that the offer is off the table.” I knew that if we lost this deal, it was the end. I begged. “Give me 24 hours, and let me see what I can do.” He relented and said he would give me a day. I called an emergency meeting of the Board, laid out the situation, and used the threat to convince them to take the offer on the table. What looked like an oncoming train turned into the light at the end of the tunnel as we were able to close our first venture round and secure the $5M investment we needed to get through our initial commercial launch. It looked very dark and scary in those moments as I confronted what looked like a fatal encounter with an oncoming train. But that same frightening perspective also forced my existing investors into facing the downside of this deal disappearing – and persuaded them to stop quibbling and move forward towards the light at the end of the tunnel.
Sometimes we are suddenly faced with a setback of some sort in our progress and the rising fear that the light we see emerging from the darkness will be the train of our undoing. Yet sometimes, the very challenge of an apparent stark setback is the stimulus that shifts us into new levels of creative problem-solving, where ideas previously considered too risky or too bold suddenly seem to be worth the risk. Or the appearance of that light in the distance becomes the rallying point for the team and other supporters to coalesce around. In these tree falling across the road moments, we respond and can escape the tunnel into the sunshine before the train runs us over. It takes guts and focus to move in the face of an apparent setback, but I can tell you from experience that sometimes that setback is a blessing in disguise. I remember once that an investor backed out of our syndicate because a beta test had failed dramatically. It caused us to lose half of our valuation in that round, yet, it also forced us back to the drawing board with the support of our incoming investors to get the technical gaps that we had thought we could work around well and truly addressed. Ultimately, it improved our product and gave us a powerful story to share with the marketplace.
Similarly, but more recently, we got customer feedback that one of the design choices we thought was acceptable was not. Changing course would cause delays, cost significant dollars and energy, and had non-trivial risks, so we needed the strong advocacy of a smart potential customer to convince us that we needed to act. In the end, that threat convinced us to invest in making the change – and multiple early adopters told us it made what was proving to be a big adoption hurdle disappear, and the path was made straighter.
As startup leaders, we must look ahead and see the light that is emerging ahead of us – and judge what it might be and how to respond to it. This takes guts and insight to navigate but also yields some of the most exciting war stories to emerge from the crucible of startup building.
