Good Entrepreneurs Are Paranoid

“Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” - Andy Grove
July 6, 2021

“Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” - Andy Grove

Recently my main business (EDMProd) got slapped by Google. 

I saw this coming. Years ago. 

I also knew that we had to do something to prepare for it. 

But things were going well. So why would I bother? 

Sales kept coming in. Growth was consistent. Every important metric was in the green. 

Until it wasn’t.

Google updated their core algorithm and our traffic dropped by 20%.

Then it dropped another 20% a few months later.

Well, that wouldn’t be a problem if we had some antifragility and diversity built-in to our marketing strategy.

But we didn’t. 

80% of our traffic and leads come from Google. So naturally, a 40% drop means the majority of our lead and customer inflow has dropped by 30%. 

This example is not the point of the article. It’s just me setting the stage for a painful, but important lesson that I’ve learned this year.

That lesson?

Good entrepreneurs are paranoid.

I’m not talking paranoia where you can’t fall asleep. When you do you wake up a few hours later, have a panic attack, fall back to sleep for an hour, wake up, have another panic attack.

That’s no way to live.

I’m talking the kind of paranoid where you’re obsessed with the health of your business, the potential risks on the horizon, and even black swan events that could cripple it completely.

The paranoid Sam would have acted on the realization two years ago that we lacked a robust marketing strategy—that we were overly reliant on Google.

He would have focused on paid media, built up social media profiles, engaged in partnerships, and so on.

Here’s the thing...

If you’re an entrepreneur—hell, if you’re a human being with any sort of ambition: being paranoid in this way is crucial.

It’s the only weapon you have against getting lulled into a false sense of security (which success usually does to people). 

If you’re in a position right now where you’re coasting, enjoying the fruits of your labor, and your daily actions reflect a mindset of “this is the way it’s going to be far into the future.”

You need to act.

If 2020 taught business owners anything, it was that they were NOT safe. 

You could have been running a profitable restaurant for two decades. Captured the market. You didn’t hold huge cash reserves because why would you? You’re the best damn restaurant in town. No one’s taking that place.

Boom. Pandemic.

Gov forces you to close. 

Cash gets eaten up.

Lay off a bunch of employees.

No one saw this coming. 

Everything comes to an end. Whether it’s a big client leaving unexpectedly, a major marketing channel underperforming, or an external event (e.g., pandemic)... 

There’s always something that can cripple or shrink your business.

So, regardless of whether you’ve been in feast or famine mode (but especially if you’ve been in **feast** mode—because you’re probably more complacent), take some time to work through this.

Ask:

  • What are the major dependencies in my business? What, if broken, would significantly reduce our profits?
  • How can I strengthen or diversify these dependencies? 
  • What are the potential risks that are likely to destroy results? 
  • If I was an evil villian attempting to take this business down, what would my strategy be? 

Do the work. Be paranoid. Survive, thrive, and sleep better at night knowing you have a robust business. 

Remember: the good entrepreneur is not the one who sits back and enjoys his success, but the one who sees what’s coming on the horizon and adjusts accordingly.

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