Here’s how the story goes – A Scorpion ambles down to the river. He gazes at the distant
bank on the other side wondering how to get across. Along hops a frog and the Scorpion
has an idea! He asks the Frog if he can get on the Frog’s back and the Frog can swim him
across to the other side. “But what if you sting me? Then we will both drown!” pleaded the Frog. “That’s why I won’t sting you”, promised the Scorpion. Convinced of this logic the Frog agrees, the Scorpion climbs on and they begin their journey of collaboration. As they paddle over the deepest part of the river the Scorpion flicks his tail and stings the frog! “What did you do that for!”, croaks the Frog as the life drains from him and they begin to sink. “Because that is my nature!” the Scorpion replies.
What does this metaphor have to do with business? Everything! Particularly if you are a
startup. Where business and money are involved there will always be the Frogs and the
Scorpions, and both are trying to achieve the same objectives i.e. success, so they will
always be crossing paths with each other.
Most entrepreneurs entering into business are Frogs. They have a skill set i.e. they can swim. They have an objective – to get to the other side thereby reaching their goals. They know and understand most of the obvious challenges such as debris, rising water, unseen obstacles, bad weather, lurking enemies etc. and mostly prepare to meet them in advance. But there is no way one can foresee the coming of the Scorpion.
The Scorpion comes in many disguises – it may be a client, a member of staff, a colleague, a partner, an associate, a bank, the economy, circumstance, politics, or even yourself. The Scorpion always makes perfect sense as you begin your journey, and only when you reach the deep water does his real character reveal itself. A client’s marketing director may resign and the new one appoints another supplier; a member of staff may be a manipulator and pitch the other staff against you; a colleague may find a new job and leave you an overload of work; an associate may get a better deal from a competitor; the bank may call in your overdraft; the economy may change dramatically and affect your industry directly; a new invention may make your product obsolete; political indiscretion may hike interest rates and your investments nosedive; and you, yourself, may make bad decisions that looked good at the time.
So, what is the moral of the story? Many small businesses fail in the first 12 months of
operation (in fact up to 90% of them) and the Scorpion is often the cause.
The unpredictability of business is one of many factors that startups fail to understand, and often some business owners give up when the Scorpion strikes. Critically important to your new business is your planning, which includes market understanding (is there a market for your product/service?), financial planning (are you spending money on the right things?), product/service quality (the optimum balance between cost and price), distribution (is your product on the right shelf?) marketing and advertising (defining your strategy and your media appropriately), customer service (are you trained and geared towards customer satisfaction), administration (does your cash flow smoothly in and out and are you meeting compliance issues?).
But always be aware of the Scorpion, it is his nature to take you out.