Year Four: Transition

Risk: High

Satisfaction: Medium Low

Key Challenge:  Humility!

Pride goes before destruction, And a haughty spirit before stumbling.

Proverbs 16:18

In the first version of my seven year business cycle, I paralleled business cycles to human growth…infancy, toddler, child etc.  Year four was adolescence. I still believe that the dangers of year four are analogous to this strange yet important stage of human development.

Unless your business is a survival or hobby business…a business, which is not even providing you with a decent income compared to the effort you expend and the risk you take, then you often are seeing success during this pivotal year.

Success is great, but can also create problems.  I made some of my biggest mistakes in year four, all because I started to ‘believe my own press clippings’.  I had some successes and I done a few decent sized contracts.  I was speaking throughout the province and, for the most part, my audience loved my presentations.  I thought of myself as Tom Peters meets Robin Williams. 

Confidence is important…in fact it is critical not only in public speaking but in business generally.  The problem is pride.  I started to think that I was a little too good for my clientele.  I didn’t treat my customers quite as well as I should have.  I even billed a client a cancellation fee, something that I had never done before.  By the way, I never worked for that company again.

It is a bit like being an adolescent.  Apparently, the neurological pathways between the emotional and the rational parts of the brain are not completely formed until age twenty-five.  This accounts for dumb things done by guys in their late teens and early twenties.  This is similar to many of our behaviours in business.  Billy’s Tenth Law about buying the Porsche too soon is typical of this stage in an owner’s business life cycle. 

Hubris and the inevitable need for change create a potentially dangerous combination.  Pride tells you that things are good and that you are damn good.  This blinds you to the need for change and can make you take customers, and success for granted.  Why did Microsoft wait so long to develop office for the iPad?  Hubris.  We can miss the obvious just because we are successful!

Year Four is risky.  Decisions based on a false self-perception can come back and bite you in the ass.  This is especially true if you are a younger entrepreneur.  I made more mistakes in year four than my father because I started my business when I was thirty-five and my Dad started his when he was fifty.  If you are in Year Four both you as the founder and your enterprise is transitioning into a sustainable, long-term businesses.   Be aware that you and your business are changing and that you must do your best to manage change and manage yourself.