Keep the optimism and check it against the numbers
Starting a company takes more belief than the evidence supports. Running one takes the discipline to notice when the evidence has turned.
Don’t forget to balance optimism with fact and belief with reality.
Joe Kraus has been on both sides of the table. He co-founded Excite in 1993, one of the early web search portals, later started JotSpot, which Google bought in 2006, and by 2011 was a partner at Google Ventures. His advice is phrased as a reminder, which suggests he has seen founders forget.
Optimism is necessary to begin at all. Most new companies fail, and anyone who weighed only the odds would stay in a job. The founders who start anyway believe, somewhat irrationally, that their case is different. That belief carries them through the months when there is little evidence either way.
The danger is that belief does not switch off when evidence starts to arrive. A founder who has told investors, staff and family that the product will work has strong reasons not to notice when it is not working. Conversion stays flat for six months and is explained away. A key customer does not renew and is called an outlier. Each explanation is plausible alone. Together they amount to ignoring reality.
Jim Collins described a similar balance in Good to Great, drawing on the story of Admiral James Stockdale, a prisoner of war who kept faith that he would get home while refusing to believe any specific date for release. The prisoners who lasted, in Stockdale’s account, combined long-run confidence with short-run realism.
A practical way to keep both is to hold them in different places. Keep the belief for the mission and the long run. Keep the facts in a small set of numbers reviewed on a fixed schedule, with thresholds decided in advance. If the numbers cross a threshold, the plan changes, whatever the mood. The line has one weakness in the early days: there are few facts to check against, and what passes for reality is often just the consensus of people who have not tried. There, the balance tilts toward belief, as long as it is tested as soon as a test becomes possible.