Last month, just two months after I pitched at the Entrepreneur Country and after offers of initial angel investment, my technology company had real cause for celebration. Our renewed sense of self-purpose and expert guidance saw us as it had finally landinged a contract with a global blue chip multi-billion dollar company with whom we had been in negotiationsng with for over almost 28 months.
At It was at this point that I must have to admit that I began to felt feel that our original good idea was starting to look like it had turned into a great one!
As With the business was now looking like it was about to grow and take off, partly due to thise big deal,win deal I have already referred to above our small Board business of just two Directors decided that it was time to expand the Board by seeking a number of non-executive Directors to join us with a view to helping us grow and build the business.
One of people we successfully recruited to join the Board as a Non-Executive is also a senior projects Director with a major UK national organisation and in this role they managed an annual budget of over £2bn. As a small business we felt very fortunate to have secured such an experienced talent.
The day of our first Board meeting arrived and we were eager to welcome our new non-Exec. Naturally wanting to impress our new 'big gun' we had circulated the draft 'Big' deal contract for our 'big deal' ahead of the meeting with a view to obtaining Board alignment and to agree to sign it off.
We wanted to show him what a smart and switched-on group of people we were.
Our anticipation and excitement ahead from of the meeting was running extremely high- this was the opportunity where we finally sat down and sold our vision and plans . We made our introductions and then immediately handed the chair over to our new Director.
"I see far too many risks in the commercial contract you have given me to read. In my opinion it could be potentially very bad for the business if it was to sign off under the current terms!"
You could have heard a pin drop in the room.
What did he just say, I silently asked myself while looking at my other Director for some indication that I had not heard what I had just heard. His look of confusion was all the confirmation I needed.
When the viability of a project you have just spent 28 months working on is challenged suggesting that the good idea you believe in could possibly be a badnot quite as good as you moments ago believe d, idea it can I confess, result in the release of many different emotions that range from total surprise to downright anger.
It took a couple of moments to fully understand what the Big Gun had just said. "Why is it a bad move?" I heard myself ask in my best 'confident' voice.
I'm an entrepreneur and as such I think that like most entrepreneurs I consider myself to be an optimist. By the word 'optimist' what I mean is that I tend to focus on the word GOOD in the phrase "A Good Idea". Of course we have to believe in our ideas if we are going to feel passionate about them. However, I must admit I have not always looked for the potential bad that can sit hidden within our 'Good Ideas'.
When developing a new good idea there is a tendency for entrepreneurs to sit in an echo chamber and to manipulate the information to result in positive outcomes. We all like to build big elaborate spreadsheet models which can almost develop into some kind of game, as we seek to build our new virtual business into a success – without it leaving the confines of our PC screens.
Our early spreadsheet models and forecasts can evolve into our 'comforts' on which we develop and build confidence in our ideas. There is however, one major flaw in this approach and that is that our spreadsheets are subjective and can be designed to tell us what we want them to tell us.
No-one ever wants to admit that a good idea they have may actually be a bad idea for a whole range of different reasons and for this reason we tend to develop all the upside for our new idea before we consider any of the Con's and downside.
"What did he just say?", I silently asked myself while looking at my colleague for some indication that I had not heard what I just had. His look of confusion was all the confirmation I needed.
Back to our Board meeting...
After listening to the opinion of our latest Non-Exec Director it became clear that too much of our planning and negotiation had taken place within our own echo chamber and that we had essentially failed to consider several potential downside of our business models. There simply had not been enough "What if..." discussions before proceeding to contract.
We agreed to boot up our laptops so we could all take a closer look at the underlying business models associated with our big deal contract. After a period of timespent tinkering and adjusting with our 'comfort' spreadsheets they began to look more suddenly became more objective in their forecasts and in doing so we had highlighted some very serious potential flaws in our numbers. It was clear that we had some more work to do before we could be confident in signinged off that particular agreement.
That first meeting with our new board very possibly saved the business and at the very least woke us up to the reality of the expectations upon us.
I intend to continue developing Big new ideas but in doing so I will try to stay out of the echo chambers and aim to develop objective models with a view to accepting the fact that a good idea may in actual fact be a bad one.
Get the picture!